Are IDN .com owners regarding to get screwed?

Verisign finds way to sign ICANN contract, but it might come at the expense of IDN investors.

[Update: see comment from Verisign at end.]

It’s been a long, long wait for owners of internationalized domain names under .com.

The idea was that they’d get rights to IDN.IDN-as-transliteration domain names to match their IDN.com names when they came out. So they registered IDN.com domain names and held on to them for a decade, waiting for their investment to pay off.

Given that the IDN-as-transliteration sounds like “com”, it will create a lot of confusion if two different parties owned IDN.com and IDN.IDN-as-transliteration.

Verisign ran into a bit of trouble executing this plan when it came to contracting with ICANN. Registries can’t hold back a bunch of domains in perpetuity, as ICM Registry discovered.

On yesterday’s Q2 conference call, Verisign CEO James Bidzos disclosed:

Based primarily on feedback from domain name community stakeholders, we have revised our IDN launch strategy. We will offer these fresh IDN top-level domains as standalone domain names, subject to normal introductory availability and rights protection mechanisms, available to all fresh gTLDs. This revised approach will not require ICANN approval and is designed to provide end users and businesses with the greatest flexibility and, for registrars, a simple and straightforward framework to serve the market.

That sounds horrible for IDN investors. But it’s a bit nuanced, and clarification in Q&A suggests there might still be a mechanism for IDN.com holders to get names, just following sunrise.

Steve M. Ashley – Robert W. Baird & Co., Inc. (Broker) Thank you very much. I just wanted to go back, Jim, to the revised strategy and maybe you can just help us understand what has changed? What is the revision and how is it different from the original plan you had?

D. James Bidzos – Executive Chairman, President & CEO Okay. Originally, we had a modified plan for a sunrise offering where we would reserve some names for certain pre-registered names in IDN.com. Based on feedback that we received from the community, it seems that it will work better for everyone and the preference on the part of our community, especially brand-holders is that we offer a standard form of sunrise. So that means that we will proceed with a standard TLD rollout for all of our IDNs, which does not require any ICANN approval.

I think the notable difference here in today’s news versus what we talked regarding to you a quarter ago is that we no longer are waiting or require any ICANN approval, and we have some more certainty around the timing in rollout. We know what we need to do now. We have the set activities that precede an actual rollout. So we can say with some confidence that our staged rollout of our 11 IDNs will begin by the end of the year.

Steve M. Ashley – Robert W. Baird & Co., Inc. (Broker) Under the previous plan, you had really hoped to provide, I think, more protection to brand-holders by extending the sunrise period and making sure that a named dot-com holder had the rights to – they would have – be the only ones who would have the rights to the fresh IDNs. Are you saying now that the third-parties following the sunrise period would be able to buy some of these IDNs?

D. James Bidzos – Executive Chairman, President & CEO Under some circumstances that might be possible. There are a number of different approaches that are available to all TLD registries under the fresh RA that we signed, the fresh registry agreement. And so, our marketing plan could include some of the capabilities that you talked regarding. What we aren’t doing is specifying a plan that requires approval from ICANN that doesn’t contain some of the precise sunrise provisions that were there ahead of. It’s a standard sunrise that will be rolled out. And I would like Pat to comment further on that part of the process.

Patrick S. Kane – Senior Vice President, Naming and Directory Services Well, definitely we would contemplate changing is to not hold a reservation for grandfathered dot-com registrations during the sunrise. And that’s the modification that we were trying to get approval from ICANN on. And we’ve taken that out, so we can move forward.

Reading this discussion, it seems that perhaps Verisign is just letting a normal sunrise take place ahead of offering a sort of matching opportunity to IDN.com owners. It could look a lot like the .Porn matching program. Or Verisign might have a trick up its sleeve to keep matching domains set aside for unlocking at some time in the future.

The good news for IDN investors: .com transliterations will start rolling out later this year.

I’ve reached out to Verisign for comment and will update this story.

Update 7/25/15: Verisign provided the following statement:

As stated during Verisign’s Q2’15 Earnings call on July 23, we can confirm that our IDN TLDs will have a standard sunrise. We will provide more information on our launch plans when appropriate.

This doesn’t clear up the concern regarding getting matching domain names. I can think of three reasons Verisign won’t comment on this further at this time:

1. It’s a tricky issue with ICANN, and they want to play it step-by-step to be careful, but they still want to find a way to do the matching. It could also be that they’re trying to get registrars on board. Registrars don’t like the complexity.

2. They don’t know how they’ll do the release following sunrise.

3. They’ve thrown in the towel on domain matching, or have changed how it will work, and don’t want to tell anyone yet.