Donuts dropped a bit of a bombshell on the domain name industry Thursday by announcing they were taking on the domain name registry business of Afilias, making it one of the largest providers of backend registry services for hundreds of ccTLDs, legacy gTLDs and new gTLDs.
Webcentral Group have offloaded its 50% share in the Australian registrar, aftermarket outlet and drop catcher NetAlliance, whose best-known brand is drop catcher and aftermarket outlet NetFleet, for A$500,000 (US$345,000) in cash to David Warmuz’s Trellian.
auDA have confirmed Notices of Breach have been issued to the NetAlliance group of registrars – NetAlliance, NetAlliance Domain No 1 And Ziphosting – whose best known brand is NetFleet, for failing to meet the Accreditation Criteria outlined in their respective Registrar Agreements. I broke this story in late October when sources told me the breach notice was originally issued, however auDA is only claiming they issued the breach last week. I also believe there has been action taken in Australia’s Federal Court recently by various parties involved in this saga.
A breach notice is believed to have been issued by the Australian domain name regulator auDA to a local registrar with many thousands of domain names under management impacted. It even has the potential to indirectly impact the recent 5GN takeover of Webcentral, according to rumours swirling around the Australian domain name industry this week. The reasons for the breach notice are unknown, but it needs to be complied with urgently, possibly as soon as Friday this week.
A couple of reports from the people behind .nz have shown the impact of COVID-19 (coronavirus) on New Zealanders and their internet use in recent months. Statistics for .nz shows increased DNS activity, including a surge in registrations that has taken registrations to close to 715,000.
It was supposed to be a new beginning. But on the day when a new auDA Board, including a new Chair, was announced, it appears there are still recriminations from those in the past with explosive allegations of what could at worst amount to corruption by outgoing directors. Not only that, the new Chair was second choice, with the first choice as Chair overruled due to what can be best described as a personality conflict.
First, today. A new Board has been appointed. The new Chair, Alan Cameron AO, was appointed after an executive search for the new Board. However the first recommendation for Chair, a high profile female company director, was overruled due to what Domain Pulse has been told can be best described as a “personality conflict” with at least one person on the outgoing Board.
Cameron has had a strong background having been appointed Chair of NSW Law Reform Commission in 2015 and prior to that was head of the Australian Securities and Investments Commission (ASIC) from 1993 to 2000. According to what is believed to be his LinkedIn profile he has been an Executive Director at Macquarie Group since 2007.
The new Board has stronger executive experience than previous Boards, but only a few Directors on the 9-member Board appear to have any background in the domain name industry. Also, auDA members were told there would be 6 independent appointed directors, one of which would be the Chair, and 4 elected directors. However in their announcement of the new Board today there were only 3 elected directors, none of whom have a background in domain investing which is sure to irk that community.
It also emerged today that a Freedom of Information (FOI) request in the name of Christopher Byron Leptos has been lodged on the Right to Know website [account now deleted – see below for explanation], a website setup where the public can make requests for information on the goings on in government departments and their agencies, of which auDA, the .au policy and regulatory body, comes under through their connection with the Department of Communications and the Arts. The request has been timed 2 days out for the annual general meeting on 14 November, the last of which the outgoing Directors will attend.
Leptos was the former auDA Chair who walked out of a Board meeting in late July never to return with claims he was spurned in his request for more information on the then auDA CEO Cameron Boardman’s allegedly falsified academic qualifications. However it’s likely Leptos is not the person making the FOI requests as several of the requests relate negatively to him, but rather a disgruntled present or former Director, or even staffer, or both, with intimate knowledge of recent happenings at the Board level.
There were 6 FOI requests to the Department of Communications and the Arts dated 12 November in Leptos’ name, these relating to:
- “serious allegations of bullying and intimidation committed by AUDA Chair Chris Leptos between May 2018 and June 2019 resulting in the resignation of a company secretary and an official complaint from a current AUDA staff member”
- a “serious breach of governance and directors duty committed by AUDA director James Deck via his attempt to inappropriately access AUDA marketing funds, specifically” relating to an application using Deck’s position on the Board for “substantial marketing funds for his private business” and that former Chair Leptos “attempted to cover up and misrepresent the conduct of Deck”
- a request for all relevant information on a direction from Departmental Officer Vicki Middleton instructing outgoing acting Chair Suzanne Ewart to “withdraw her application for Chair of the new AUDA board”
- allegations of “verbal abuse directed at Departmental staff member Annaliesse [sic] Williams by AUDA directors Joe Manariti and James Deck at the ICANN meeting in Barcelona in October 2018” including amount of alcohol consumed by Manariti and Deck and response of the then Chair Leptos
- an order by acting Chair Suzanne Ewart “to pay her A$10,000 per week despite there not being a Board resolution or budget for this to occur”, which didn’t include superannuation payments and was in addition to her Chair salary of $70,000 which would have taken her total salary “to $627,000 per year, making her the 9th highest paid public servant in Australia”
- expense claims by the aforementioned Directors James Deck and Joe Manariti relating to their attendance at the ICANN meeting in Barcelona where the FOI request alleges Deck and Manariti’s flights were “booked through Manariti’s wife [sic] travel agency (African Luxury Safaris) at 30% more than market rates and equivalent airfares and contrary to AUDA travel policy” with “4 nights in Prague, 4 nights in Paris and 7 nights in Barcelona which shows that only 3 meeting [sic] were conducted over the 18 day trip”, “hotel accommodation in Barcelona at A$1500 per night for a luxury suite, despite other AUDA staff and directors staying in A$250 per night accommodation and a “total expense claim showing the AUDA was charged over $35,000 for this travel for 3 meetings in 18 days”
- allegations relating to the above travel by Manariti and Deck that “AUDA incurred [an FBT liability] totaling over $11,000 as the travel was of a personal nature and not approved by AUDA and that the Chair of AUDA Suzanne Ewart covered up this liability”.
UPDATE: The Right to Know account set up to raise the allegations has now been suspended as a report was received the “account was created to impersonate someone else.”
Tuesday’s sudden departure of the auDA CEO comes during a protracted period of turmoil at the .au policy and regulatory body and leaves nobody at the .au policy and regulatory body in positions to make key decisions on policy, marketing or spending, and with the introduction of second level registrations looming in the fourth quarter of 2019, the new rules still haven’t been announced.
In what can only be described as a tribute that was over the top in its praise of the controversial CEO, himself appointed after the controversial ousting of the founding CEO Chris Disspain, the auDA statement announcing Boardman’s departure gushes on his achievements, including “development and implementation of new Licensing Rules for .au second-level domain names, and the introduction of direct registration of .au.” With second level registrations due to be introduced within a few months and despite the auDA Board’s inference that Boardman’s “job is done” there is still much to do. Boardman himself said in the recent auDA Quarterly Report: Q2 2019 report that:
The biggest project on auDA’s immediate horizon is the implementation of second level registrations as recommended by the Policy Review Panel. Key to its delivery is the development of a national marketing and public awareness campaign which will build upon the public awareness generated during the policy development process. This project will be the biggest marketing project in auDA’s history and involves not just the uptake of second level .au names, but also building a comprehensive brand for the .au domain more widely.
Registrars are seething as policies and procedures are still to be implemented and end users, for the ones with an interest, are even less well informed. However registrars are reticent to speak on the record due to contractual arrangements. But Domain Pulse is aware of lists of complaints from registrars sent to auDA which appear to be never acted upon. And with the upcoming introduction of second level registrations, Boardman had promised on several occasions that all current registrants would be contacted, and yet it still hasn’t happened. With no CEO and Chair, one wonders what the future is for second level registrations as policies haven’t been finalised and little implemented.
It begs the question, why would Boardman leave of his own volition with still so much to do? Sources have indicated that of course, he didn’t actually resign but his hand was forced by a “reluctant” Board that certainly wouldn’t like having to go public with an ugly termination from a company that is already under the microscope of the Department of Communications and the internet using public.
Incredibly, the announcement saw no interim CEO announced at what, for end users at least, is leading up to the biggest change in the organisation’s history with the implementation of second level registrations.
Bruce Tonkin, the current COO, should have been a walk up start for the CEO position, especially after the plaudits he received in the Statement from the Board. Again, why wasn’t he? Or was there an issue and auDA would have been faced with 2 “resignations”?
Whatever is going on it once again showcases an inept Board and casts a dark shadow over the conduct of the Executive. It’s not like it was the first time either: there have been allegations Board meeting minutes have been altered after publication, sackings of staff members that spoke out against the CEO’s activities, the former Company Secretary compiled a report that ultimately led to their effective sacking and also in Boardman’s suspension of employment. All of these things highlight a pattern of concern for the Department of Communications and the Arts and the domain name community as a whole.
Boardman’s departure comes just 6 weeks after Chair Chris Leptos departed and a terse announcement that followed his abrupt departure. The departure of both means there is no Chair or CEO. Just the “current executive team [who] will collectively carry out the CEO’s responsibilities.” A recent Quarterly Report makes no mention of Leptos and his departure. It will be interesting to see if the same treatment is applied to the departing CEO upon his departure.
Then there’s the reconstitution of the auDA Board, a process that was announced on the same day as the Chair’s abrupt departure. The new Board is to consist of 6 independent directors, one of whom will be the independent Chair, plus 4 elected directors. So, in short order, we will have a new Chair, a new CEO and a new Board, right at the time when .au is going through its single biggest change. Is it time for the current auDA Board, all of which have been tarnished by Boardman, to resign and for the Department of Communications and the Arts to take a stronger position in the future of the .au namespace? It is just too damn important to leave in in the hands of the incompetent and the inept.
Going forward, what of auDA? One can expect their first test in the international community will be the APTLD meeting in Malaysia in September. And then because of the Sri Lankan bombings, auDA is hosting the APTLD meeting in February 2020. There’s also an ICANN community meeting to be held in November 2019 which auDA is hosting. There is also the lack of input in the international community. As far as Domain Pulse can ascertain, auDA is contributing to zero ICANN working groups when they used to be such a contributor. They do have a Strategic Adviser, Head of Government Affairs. But when asked Wednesday if his job was ever advertised and if so where, Domain Pulse received zero response.
So what do we know about Boardman’s “resignation”? As usual in the way auDA works since late 2016, accountability and transparency are sorely lacking, and stakeholders are kept in the dark. Following the “resignation”, it would a travesty if once again this not-for profit was engaged in another golden handshake, several of which have been paid to former employees forced out in recent years. We also have an organisation that has nobody in place that can make key decisions, including on marketing and spending. And the biggest change for .au since auDA was formed almost 2 decades ago, the introduction of second level registrations, is looking dead in the water.
There’s plenty of dysfunction at auDA, the .au policy and regulatory body, but one thing they’ve been pushing ahead with is second level .au registrations. At the auDA board meeting on 20 May, 3 years and one month after the Board originally approved second level registrations, the Board agreed to push ahead with their implementation, commencing in the fourth quarter of 2019.
Currently registrants of domain names in Australia’s country code top level domain (ccTLD) get to choose, depending on their eligibility, third level domain names such as .com.au, .net.au, .org.au, id.au and .asn.au as well as state and territory namespaces. Registrants of .au domain names currently have to be registered businesses within Australia except for .id.au which is for Australian individuals.
According to an announcement today (31 May), under the implementation rules all existing .au registrants will be able to apply for priority status to register the exact match of their existing third level .au domain name at the second level. For example, the registrant of name.com.au will be able to apply for priority to register name.au.
More information of the priority allocation system can be found in the Implementation Rules here [pdf] while auDA says more information about second level registrations will be released in the coming weeks. However Australian individuals and businesses will be able to register second level domains.
According to the Implementation Rules, from 1 October 2019 to 1 April 2020, priority will be given to registrants that have registered their domain names before a cut-off date will have first priority to their corresponding second level domain, while registrants that have registered their .au domain name after the cut-off date and before commencement will be classified as category 2. If there are no applications for domain names in category 1, category 2 registrants will be next in line. Any remaining domain names will then be made available on a first come, first served basis. The cut-off date doesn’t appear to have been determined at the time of writing.
There will be a review of the .au Implementation Rules at 12 months, 18 months, 24 months and 30 months after the commencement date.
Policy changes proposed an auDA Panel have been slammed by the Internet Commerce Association who have said they should âembrace domain investingâ, âthe Panel has found solutions in search of a problemâ and it âhas not engaged in evidence-based policy makingâ and that the Panel has âcreated equally or more unclear policies which are impossible and costly to effectively enforce.â
In late March, auDA, the policy and regulatory body for Australiaâs country code top level domain (ccTLD), released a report compiled by their Policy Review Panel (PRP) who is inviting feedback from the Australian community on its final recommendations to the auDA Board. Itâs turned out to be just another sad and sorry chapter since a cabal associated with the right-wing political party of Australian politics took control of auDA in 2016.
Over the last 3 years this cabal has seen the founding CEO booted out, referred allegations of impropriety against former employees and directors to Victorian state police that have predictably come to nothing, overseen around one thousand people from outside Australia joining as members within a few weeks when only a handful of new members ever join every month to ensure they get constitution changes, seen multiple staff and directors bullied and harassed into leaving the organisation including one being given notice while she was on sick leave having cancer treatment and who later died, likely deliberately leaked a confidential report to discredit agitators against the direction of the organisation, been the recipient of an Australian government review that said the organisation was âno longer fit-for-purpose and reform is necessaryâ, seen Members agitate for 2 Special General Meetings that saw a Chair resign before being booted out, undertaken a dubious Registry tender and spent A$4.247 million in the year to 30 June 2018 on consultants and advisers to further their objectives, up from $1.783 million in the previous financial year.
So itâs hardly surprising a Panel appointed by auDA has come up with a list of policies that defy evidence, are likely unworkable and seeks to alienate the registrants of what is probably a significant part of the .au portfolio.
In their submission responding to the public consultation period auDA is currently undertaking on proposed changes, the ICA summarises their problems with the auDA Panel proposals as follows:
1. auDA should reconsider its approach to domain name investing and should embrace it as a beneficial and important part of the domain name ecosystem;
2. The Panel has found solutions in search of a problem;
3. The Panel has not engaged in evidence-based policy making;
4. Rather than clarifying the policies, the Panel has merely created equally or more unclear policies which are impossible and costly to effectively enforce.
It should be noted that under rules for .au, domain monetisation is allowed, but the registering of domain names for the sole purpose of sale is not. Sales of .au domain names happen every day in Australia through expired domains via dropcatchers and aftermarket sales. auDA themselves sold many generic domain names for a windfall back in 2002.
In their submission, the ICA defends the role of domain investors, or domainers, as a legitimate activity and they âwould have expected that the experiences of other countries such as the UK, Canada, United States, and New Zealand would have been examined and considered. In each of these aforementioned countries, domain investing contributes positively to the overall domain name ecosystem and helps ensure the success and viability of the registry.â
The ICA believes âthe primary beneficiary of the optimism of domain investors who register in bulk domain names that would otherwise sit unregistered is auDA itself. auDA likely receives millions of dollars in revenues from such registrations and renewals. From a public policy perspective, the question arises as to what harm is caused by the optimism that results in the bulk registration of otherwise unregistered domains when balanced with all the worthwhile initiatives that auDA could fund with the revenues from such registrations and renewals.â
The ICA also wonders what problem auDA is trying to address with their policy recommendations.
âThe Panel however stated in the Final Report, that âon balanceâ it âbelieves that the resale and warehousing prohibition should be retained and strengthenedâ. From our review of the Final Report however, it is entirely uncertain and undocumented as to what extent there is any genuine âproblemâ existing in the Australian namespace arising from the current rules as drafted, rather than an assumption by the Panel.â
The submission raises plenty of issues such as what constitutes the business of a domainer, what constitutes a âcomputer generated websiteâ which the auDA Panel report proposes as a means of determining if the domain name used is intended for domaining. Additionally, the report contends that if a seller lists multiple domain names for sale, then this is an indicator of a domainer. And as the ICA submission notes, thereâs no information provided by the auDA report as to how many domain names are listed for sale and sold, nor how many domains are warehoused.
The ICA also notes an âindicator proposed by the Panel for determining the âprimary purposeâ of the registration is whether more than six domain names were sold or transferred during the previous six months except in relation to a business.â The ICA then asks âwhat constitutes a business? Who investigates how many domain names were sold or transferred by a registrant? How does the registrant prove that the domain names were transferred for a bona fide reason?â
The ICA also raises concerns about the introduction of second level registrations, whose introduction this writer has long supported. However the proposals suggested by the Panel add complications. There are also proposed changes to domain monetisation. The ICA wonders what the problem is that the auDA Panel is trying to address as there is no problem that has arisen either in practice, or that the Panel has been able to identify. The Panel identifies anecdotal problems, but nothing that is substantiated.
To download, read and make submissions on the Policy Review Panel (PRP) report, see:
The submission by the Internet Commerce Association submission to the auDA PRP, see:
In a pace that even snails would outrun, auDA has announced the next steps in their “public consultation for policy reform” that includes allowing direct registrations, or registrations at the second level. Following the Names Policy Panel recommendations in December 2015 and accepted by the board in April 2016, auDA have announced yet another round of consultations.
It follows auDA, the policy and regulatory body for the .au (Australia) country code top level domain (ccTLD), having been beset by scandals in recent years since the current leadership took over.
In what will be a contentious move among many, the Panel has recommended a ban on registering domain names for the purpose of resale or monetisation, or domain investing/domaining. Difficult to ban, the board introduced a policy in 2006, updated in 2008 and 2012, that sought to legitimise registering domain names for the purpose of resale or monetising through advertising. Whether one agrees domaining is good or bad, the policy has been successful and domaining has been managed under .au.
And why make the change? The largest top level domain in the world operates under free market principles which allows buying and selling domains freely, and they have 139 million domain names registered. And dozens of ccTLDs, including currently .au, do so as well. auDA, under previous leadership, themselves have profited enormously from the sale of generic domain names back in 2002.
There are also questions to be asked of dropcatching as well should the change regarding domaining take place. There are currently 2 auDA-approved dropcatchers who make far more windfall profits each day than any domain investor ever would. And one of these dropcatchers (Netfleet) is 50% owned by the ARQ Group (formerly MelbourneIT). The current CTO of ARQ is Brett Fenton, and he is an active member of auDA’s Policy Review Panel.
As one person linked to domaining in .au told Domain Pulse, “In the opinion of many, auDA is going to find it very hard to stuff the genie back into the bottle.”
On the issue of second level registrations, an issue that .au has been considering on and off for well over a decade and was finally recommended by the Names Policy Panel in their report to the Board in 2015, the Panel recommendations do nothing other than allow individuals the right to register in a desirable space (currently individuals can only register domain names under the sadly unloved .id.au). The Panel, like the Names Policy Panel recommendations, hasn’t sought to differentiate direct/second level registrations from third level registrations. There are also potential conflicts foreseen in around 60,000 domain names where the same string is registered across multiple 2LDs with the report recommendations including registrants resolve among themselves who should be entitled to the domain name, and until they do, no individual or business would be entitled to the domain.
Under the new recommendations if accepted, the eligibility rules would be amended to read “a registrant is prohibited from registering any open 2LD domain name for the primary purpose of (a) resale, (b) transfer to another entity, or (c) warehousing”.” Additionally, there would be no grandfathering of existing registrations with registrants only allowed to keep their domains that fall afoul of the new rules until the end of the current registration cycle.
The Panel also made recommendations on an Australian presence requirement for domain names registered in .com.au, .net.au, .org.au, .asn.au, .id.au (existing 2LDs where businesses are able to register domain names) and (in future) .au. The Panel recommended that for all domain names registered in .com.au, .net.au, .org.au, .asn.au, .id.au and .au, the registrant must be a legal person with an Australian presence.
Trademark holder are also addressed where under .com.au and .net.au foreign registrants are able to satisfy eligibility requirements if the registrant owns an Australian registered trade mark, or is the applicant for an Australian trade mark. The Panel recommended applicants “for an Australian trade mark registration, or the owner of an Australian trade mark registration, should only be allowed to register a domain name that is an exact match to their Australian trade mark application or registration (if the trade mark application or registration is the sole basis for their meeting of the Australian presence requirement).”
Another change proposed by the panel is regarding domain name transfers. This means, as explained “if a domain name licence is for five years, and the registrant transfers the domain name licence to another registrant after one year, the new registrant will have the benefit of the remaining four years of the licence period. This approach is consistent with international practice and ensures that only one fee is paid for the duration of the licence period.”
There are also recommendations that deal with the suspension and cancellation of domain names, retaining the Prohibited Misspellings List and Reserved List as well as reserving a handful of terms relating government, parliament, the courts, police and military for possible future second level domains.
Disclosure: The writer served on the auDA Board from 2005 to 2007, participated in the 3 most recent Names Policy Panels, was a consultant to auDA from 2002 to 2016 and is currently a client of Neustar and a number of other registries and registrars.