Verisign WILL get .web, ICANN rules

Verisign did nothing wrong when it won the $135 million .web gTLD auction via a secret intermediary, ICANN’s board of directors has decided.

The board voted at the weekend to declare that Nu Dot Co, the shell company that applied for .web “did not violate the Guidebook or the Auction Rules” when it signed a secret side-deal that would see Verisign fund its bid in exchange for handing over the registry contract after it is signed.

The board has told ICANN management to continue to process NDC’s application, which has been tied up in legal red tape since the auction in 2016.

ICANN did not rule on Verisign’s claims that second-place bidder Afilias broke the rules when executives sent text messages trying to resolve the contention set during a “black out” period immediately prior to the auction.

The ruling means that, absent any further legal action, NDC can soon sign its Registry Agreement and attempt to transfer it to Verisign, a procedure that is not often controversial when M&A takes place.

It could mean .web, which has been fiercely contested for over 20 years, launches this year.

.web gTLD was first applied for in 2000. Afilias, Neustar (then Neulevel) and others viewed it as the best probable competitor for .com and wanted that sweet, sweet action.

But ICANN instead awarded them .info and .biz respectively, in part because another applicant, Image Online Design, was already running .web in an alternate root.

There were seven applicants in the 2012 round, but attempts at privately resolving the contention set were resisted by NDC, leading to suspicions that it was being secretly bankrolled by a much larger non-applicant company.

That turned out to be true when Verisign fessed up after the auction that it was funding NDC’s $135 million winning bid.

Because Verisign has market power, ICANN referred the deal to US competition regulators, the Department of Justice, which gave the all-clear in 2018.

Runner-up Afilias immediately set the ball rolling to file an Independent Review Process complaint with ICANN, which it did in 2018, claiming ICANN broke its bylaws by failing to establish that Verisign was NDC’s sugar daddy before the auction.

The Afilias .web application is currently owned by Altanovo, the company formed of all the bits of Afilias that Identity Digital (then Donuts) didn’t want when it acquired Afilias.

The IRP panel ruled for Afilias, saying ICANN should have at the very least made a decision on whether the deal was kosher before starting to contract with NDC. That ruling became final at the end of 2021.

It’s taken ICANN 16 months to actually make its decision.

And its rationale? Hard to say with any degree of certainty.

Both sides’ arguments rely heavily on the text of the Domain Acquisition Agreement between Verisign and NDC, and ICANN has redacted all references to that document’s contents (presumably at Verisign’s demand) in its resolution and accompanying rationale.

The board said:

NDC remains the applicant and, if NDC enters into a Registry Agreement with ICANN, NDC will become the Registry Operator for .WEB. Whether or not NDC then attempts to assign the Registry Agreement to Verisign is, at this point, an event that has not occurred and conceivably may not occur depending on the circumstances at the time. And if NDC subsequently decides to request such an assignment, there are processes in place to review such a request, including the need for ICANN’s approval of that request. Such an assignment does not equate to a “circumvention” of the application process but, rather, is a necessary component for servicing Registry Operators and allowing the continued operation of gTLDs.

The board additionally notes that the process of sorting all this out took years and millions of dollars of legal fees.

Verisign and Afilias spar over .web delays

Afilias and Verisign are at odds over a further delay to the resolution of the .web gTLD dispute.

Afilias, aka Altanovo Domains, says its lawyers are too busy to meet ICANN’s deadline for arguments about whether either company broke the rules in the 2016 auction of .web, but Verisign thinks they have plenty of time,

ICANN’s Board Accountability Mechanisms Committee had set a deadline of July 15 for both applicants to submit a document explaining why they believe the other broke the rules and should have their auction bids voided.

But Afilias’ lawyers say they “have longstanding international travel and hearing commitments in June and July that cannot be rescheduled” and want an extension to July 29.

Just two weeks seems like no big deal in a contest that has been running for literally a decade, but Verisign is opposing it anyway, according to emails Afilias submitted to ICANN (pdf).

“ICANN provided the parties with a generous briefing schedule sufficient to accommodate counsel’s other commitments. For this reason, Verisign and NDC do not support Altanovo’s current request for a further extension,” a Verisign lawyer wrote.

Verisign, which won the auction via its proxy, Nu Dot Co, believes Afilias broke a communications blackout period before the auction by texting NDC to negotiate a deal. Afilias believes NDC broke the rules by not disclosing Verisign’s involvement.

The BAMC’s job, following the outcome of an Independent Review Process case last year, is to decide whether either of these claims is legit and settle who won the auction once and for all.

ICANN kicks the can on .web yet again

Did Verisign cheat when it bought .web for $135 million in 2016? ICANN will make its mind up one day, but not today.

The ICANN board of directors has asked the three parties in the contested new gTLD auction for an info dump, so it can decide, presumably before the end of the year, whether to bar the top two bids for breaking the rules.

The Board Accountability Mechanisms Committee has written to Verisign, Nu Dot Co (the proxy Verisign used to hide its bid) and Afilias (aka Altanovo, the second-place bidder) to ask them to condense their last six years of claims and counter-claims into two 75-page documents.

Afilias reckons Verisign and NDC broke the rules by not disclosing that the former was secretly bankrolling the latter’s winning bid. It wants the bid invalidated, allowing Afilias to take over .web for a cheaper price.

Verisign has counter-claimed that Afilias should be disqualified for allegedly privately communicating with NDC during a pre-auction comms blackout period. It’s published screenshots of text messages it says prove this took place.

The Independent Review Process complaint against ICANN technically resulted in a win for Afilias, with the IRP panel ruling that ICANN broke its bylaws by not making a decision on Verisign’s alleged rule-breaking back in 2016.

That decision was reached in December, and ICANN has been faffing around pointedly not making a decision ever since.

Now, BAMC wants the parties to present their final pleadings in this ongoing drama.

It wants both side to “provide a comprehensive written summary of their claims and the materials supporting their claims” in order “to ensure that the BAMC is reviewing a complete picture of the parties’ positions”.

I don’t think there’s anything untoward about this — BAMC is basically just doing what the IRP panel told it to, albeit it in a roundabout way — but it is a little surprising that it thinks there isn’t enough information about their complaints in the public domain already.

As well as three years of legal filings, there are extensive transcripts of seven days of hearings that took place in 2020. ICANN will have access to the unredacted versions, too, which include details of the Verisign-NDC deal that the rest of us aren’t allowed to look at.

Maybe there’s just too much information to wade through.

Under the BAMC’s new process, the parties have until July 15 to present their cases, then another month to rebut their opponents with a further 30-page document.

Assuming the subsequent decision proceeds at ICANN Speed (which is to say, glacial) I don’t think we can reasonably expect a decision before the fourth quarter.

Mutually assured destruction? Now Afilias faces .web disqualification probe

Afilias’ ongoing quest to have Verisign’s winning bid for the .web gTLD thrown out may have backfired, with ICANN now launching a probe into whether Afilias’ own bid should be disqualified.

Afilias and Verisign could now BOTH be kicked out of the .web fight, delivering the coveted gTLD into the hands of the third-placed bidder for a knock-down price.

There’s even the possibility that Verisign’s winning $135 million bid could be more than cut in half, taking tens of millions out of ICANN’s coffers.

ICANN’s board of directors on Thursday said it will investigate not only whether Verisign broke new gTLD program rules by using a Nu Dot Co as proxy to bid, but also whether Afilias broke the rules when an executive texted NDC during a pre-auction comms blackout period.

It’s the first time board has resolved to take a look at the allegations against Afilias, which so far have only come up in letters and arbitration filings from Verisign and NDC.

The .web auction in 2016 resulted in a winning bid of $135 million from NDC. It quickly emerged that its bid was bankrolled by Verisign, which had not directly applied for .web.

Afilias’ applicant subsidiary (now called Altanovo Domains, but we’re sticking with “Afilias” for this story) has been trying to use Verisign’s sleight-of-hand to get the auction overturned for years, on the basis that ICANN should have forced NDC to show its cards before the auction took place.

An Independent Review Process panel last year ruled that ICANN broke its own bylaws by failing to rule on Afilias’ allegations when they were first made, and told ICANN to put .web on hold while it finally formally decides whether Verisign broke the rules or not.

What the IRP panel did NOT do was ask ICANN to rule on Verisign’s counter-allegations about Afilias violating the auction blackout period. ICANN’s decided to do that all by itself, which must piss off Afilias no end.

The board resolved last week, with my emphasis:

Resolved (2022.03.10.06), the Board hereby: (a) asks the [Board Accountability Mechanisms Committee] to review, consider and evaluate the allegations relating to the Domain Acquisition Agreement (DAA) between NDC and Verisign and the allegations relating to Afilias’ conduct during the Auction Blackout Period; (b) asks the BAMC to provide the Board with its findings and recommendations as to whether the alleged actions of NDC and/or Afilias warrant disqualification or other consequences, if any, related to any relevant .WEB application; and (c) directs ICANN org to continue refraining from contracting for or delegation of the .WEB gTLD until ICANN has made its determination regarding the .WEB application(s).

I see four possible outcomes here.

• Nobody gets disqualified. Verisign wins .web and ICANN gets to keep its $135 million. Afilias will probably file another IRP or lawsuit.
• Verisign gets disqualified. Afilias gets .web and ICANN probably gets paid no more than $79.1 million, which was its maximum bid before the auction became a two-horse race. Verisign will probably file an IRP or lawsuit.
• Afilias gets disqualified. Verisign wins .web and then it has to be figured out how much it pays. I believe the high bid before the third-place bidder pulled out was around $54 million, so it could be in that ball-park. Afilias will probably file another IRP or lawsuit.
• Both Afilias and Verisign get disqualified. The third-placed bidder — and I don’t thinks its identity has ever been made public — wins .web and pays whatever their high bid was, possibly around $54 million. Everyone sues everyone else and all the lawyers get to buy themselves a new summer home.

The other remaining applicants are Donuts, Google, Radix and Schlund. Web.com has withdrawn its application.

The people who will decide whether to disqualify anyone are the six members of the Board Accountability Mechanisms Committee who are not recusing themselves due to conflicts of interest (Edmon Chung has a relationship with Afilias).

Given that the board has already ruled that it has a fiduciary duty to dip into the new gTLD auction proceeds pretty much whenever it pleases, can’t we also assume that it has a fiduciary duty to make sure that auction proceeds pool is as large as possible?

Afilias appeals .web ruling, Verisign responds with “rigging” claims

Afilias has filed an unusual and unprecedented appeal against the May ruling that found ICANN broke its bylaws by awarding the .web gTLD to a Verisign affiliate.

The company is arguing that the Independent Review Process panel that decided the .web case shirked its duties, by not actually resolving the major disputes placed before it.

Verisign, in response, has accused Afilias of asking for a “do-over”, which it said is against the rules, and published information it said showed the company had tried to “rig” the .web auction.

The IRP followed the 2015 ICANN last-resort auction, which saw Verisign secretly fund a shell applicant called Nu Dot Co to win with a $135 million bid, on the basis .web would later be transferred to its custody.

Afilias was the runner-up, and argued that ICANN should have voided the NDC bid because Verisign’s involvement was not disclosed.

But the IRP panel merely found that ICANN had breached its bylaws by failing to have the courage to actually rule on the legitimacy of Verisign’s tactics, and threw it back to ICANN to make a decision.

ICANN has yet to make that decision. Instead, Afilias has filed an appeal (pdf) with the in the form of an “application for an additional decision and interpretation”.

IRP cases are handled by the International Center for Dispute Resolution, and Afilias is invoking the ICDR Arbitration Rules that allow a claimant to request an “interpretation” or “additional award” from the original decision:

By failing to resolve all of the claims and issues Afilias presented to the Panel for decision, the Panel has not only failed to satisfy its mandate; it has also undermined the very Purposes of the IRP (as set out in Section 4.3(a) of the Bylaws)—especially, but not exclusively, by its decision to refer Afilias# claim arising from Nu Dot Co’s (“NDC”) violation of the New gTLD Program Rules back to the ICANN Board and Staff to “pronounce” upon “in the first instance.”

The lengthy request is, I believe, an unprecedented attempt at an appeal of an IRP ruling. It’s also heavy on the legal arguments and does not really shed much light on the facts of the case.

The gist of it is that Afilias wants the panel to rule that ICANN breached its bylaws, new gTLD program rules and international law by failing to disqualify NDC and awarding .web to Afilias instead.

Verisign, in response, said in a blog post that Afilas’ application is “not permitted by the arbitration rules – which expressly prohibit such requests for ‘do overs.'”

It also published a letter (pdf) from NDC to ICANN in which it argues that Afilias tried to engage in a “collusive scheme” to “rig” the .web auction.

The letter contains many pages of private correspondence — emails and phone text messages — in which rival .web applicants, before Verisign’s involvement had been confirmed, fruitlessly attempted to persuade NDC to join them in a private auction in which the winning bid would have been shared among the losers rather than all going to ICANN.

While this kind of private settlement was envisaged, and indeed encouraged, by new gTLD program rules, Verisign reckons its smoking gun is messages sent by Afilias during the so-called “blackout period” before the last-resort auction, during which communications between applicants were forbidden.

As far as I can tell, all or almost all of the documents provided by NDC to ICANN had already been submitted to the public record during the IRP.

Note — the “Afilias” referred to throughout this post is the portion of the company, now known as Altanovo Domains, left behind after most of its operating businesses were acquired by Donuts late last year.

.web ruling hands Afilias a chance, Verisign a problem, and ICANN its own ass on a plate

ICANN has lost yet another Independent Review Process case, and been handed a huge legal bill, after being found to have violated its own rules on transparency and fairness.

The decision in Afilias v ICANN has failed to definitively resolve the issue of whether the auction of the .web gTLD in 2016, won by a shell applicant called Nu Dot Co backed by $135 million of Verisign’s money, was legit.

ICANN’s now urging NDC, Afilias and other members of the .web contention set to resolve their beefs privately, which could lead to big-money pay-days for the losing auction bidders at Verisign’s expense.

For ICANN board and staff, the unanimous, three-person IRP panel decision is pretty damning, with the ruling saying the org “violated its commitment to make decisions by applying documented policies objectively and fairly”.

It finds that ICANN’s board shirked its duty to consider the propriety of the Verisign/NDC bid, allowing ICANN staff to get perilously close to signing a registry contract with an applicant that they knew may well have been in violation of the new gTLD program rules.

Despite being named the prevailing party, it’s not even close to a full win for Afilias.

The company had wanted the IRP panel to void the NDC/Verisign winning bid and award .web to itself, the second-highest bidder. But the panel did not do that, referring the decision instead back to ICANN.

As the loser, ICANN has been hit with a $1,198,493 bill to cover the cost of the case, which includes Afilias’ share of $479,458, along with another $450,000 to cover Afilas’ legal fees connected to an earlier emergency IRP request that ICANN “abusively” forced Afilias into.

The case came about due to a dispute about the .web auction, which was run by ICANN in July 2016.

Six of the seven .web applicants had been keen for the contention set to be settled privately, in an auction that would have seen the winning bid distributed evenly among the losing bidders.

But NDC, an application vehicle not known to be particularly well-funded, held out for a “last resort” auction, in which the winning bid would be deposited directly into ICANN’s coffers.

This raised suspicions that NDC had a secret sugar daddy, likely Verisign, that was covertly bankrolling its bid.

It was not known until after NDC won, with a $135 million bid, that these suspicions were correct. NDC and Verisign had a “Domain Acquisition Agreement” or DAA that would see NDC transfer its .web contract to Verisign in exchange for the money needed to win the auction (and presumably other considerations, though almost all references to the terms of the DAA have been redacted by ICANN throughout the IRP).

Afilias and fellow .web applicant Donuts both approached ICANN before and after the auction, complaining that the NDC/Verisign bid was bogus, in violation of program rules requiring applicants to notify ICANN if there’s any change of control of their applications, including agreements to transfer the gTLD post-contracting.

ICANN has never decided at the board level whether these claims have merit, the IRP panel found.

The board did hold a secret, off-the-books discussion about the complaints at its retreat November 3, 2016, and concluded, without any type of formal vote, that it should just keep its mouth shut, because Afilias and Donuts had already set the ball rolling on the accountability mechanisms that would ultimately lead to the IRP.

More than half the board was in attendance at this meeting, and discussions were led by ICANN’s top two lawyers, but the fact that it had even taken place was not disclosed until June last year, well over three and a half years after the fact.

Despite the fact that the board had made a conscious, if informal, choice not to decide whether the NDC/Verisign bid was legit, ICANN staff nevertheless went ahead and started contracting with NDC in June 2018, taking the .web contention set off its “on-hold” status.

Talks progressed to the point where, on June 14, ICANN had sent the .web contract to NDC, which immediately returned a signed copy, and all that remained was for ICANN to counter-sign the document for it to become binding.

ICANN VP Christine Willett approved the countersigning, but four days later Afilias initiated the Cooperative Engagement Process accountability mechanism, the contract was ripped up, and the contention set was placed back on hold.

“Thus, clearly, a registry agreement with NDC for .WEB could have been executed by ICANN’s Staff and come into force without the Board having pronounced on the propriety of the DAA under the Guidebook and Auction Rules,” the IRP panel wrote.

This disconnect between the board and the legal staff is at the core of the panel’s criticism of ICANN.

The board had decided that Afilias’ claim that NDC had violated new gTLD program rules was worthy of consideration and had informally agreed to defer making a decision, but the staff had nevertheless gone ahead with contracting with a potentially bogus applicant, the panel found.

In the opinion of the Panel, there is an inherent contradiction between proceeding with the delegation of .WEB to NDC, as the Respondent [ICANN] was prepared to do in June 2018, and recognizing that issues raised in connection with NDC’s arrangements with Verisign are serious, deserving of the Respondent’s consideration, and remain to be addressed by the Respondent and its Board, as was determined by the Board in November 2016. A necessary implication of the Respondent’s decision to proceed with the delegation of .WEB to NDC in June 2018 was some implicit finding that NDC was not in breach of the New gTLD Program Rules and, by way of consequence, the implicit rejection of the Claimant’s [Afilias’] allegations of non-compliance with the Guidebook and Auction Rules. This is difficult to reconcile with the submission that “ICANN has taken no position onw hether NDC violated the Guidebook”.

The upshot of the panel’s ruling is to throw the issue back to ICANN, requiring the board to decide once and for all whether Verisign’s auction gambit was kosher.

If you’ll excuse the crude metaphor, ICANN’s board has been told to shit or get off the pot:

The evidence in the present case shows that the Respondent, to this day, while acknowledging that the questions raised as to the propriety of NDC’s and Verisign’s conduct are legitimate, serious, and deserving of its careful attention, has nevertheless failed to address them. Moreover, the Respondent has adopted contradictory positions, including in these proceedings, that at least in appearance undermine the impartiality of its processes.

…

[The panel r]ecommends that the Respondent stay any and all action or decision that would further the delegation of the .WEB gTLD until such time as the Respondent’s Board has considered the opinion of the Panel in this Final Decision, and, in particular (a) considered and pronounced upon the question of whether the DAA complied with the New gTLD Program Rules following the Claimant’s complaints that it violated the Guidebook and Auction Rules and, as the case may be, (b) determined whether by reason of any violation of the Guidebook and Auction Rules, NDC’s application for .WEB should be rejected and its bids at the auction disqualified;

At the same time as the decision was published last night — shortly after midnight UTC and therefore helpfully too late to make it into today’s edition of ICANN’s godawful new email subscriptions feature — ICANN issued a statement on the outcome.

“In its Final Declaration, the IRP panel ruled that the ICANN Board, and not an IRP panel, should decide which applicant should become the registry operator for .WEB,” CEO Göran Marby said.

“The ICANN Board will consider the Final Declaration as soon as feasible, within the timeframe prescribed in the Bylaws, and remains hopeful that the relevant .WEB applicants will continue to seek alternatives to resolve the dispute between them raised during the IRP,” the statement concludes.

That should be of concern to Verisign, as any non-ICANN resolution of the .web battle is inevitably going to involve Verisign money flowing to its competitors.

But my first instinct strikes me that this a is a low-probability outcome.

It seems to me much more likely at first glance that ICANN will rule the NDC/Verisign ploy legitimate and proceed to contracting again.

For it to declare that using a front organization to bid for a gTLD is against the rules would raise questions about other applications that employed more or less the same tactic, such as Automattic’s successful bid, via an intermediary, for .blog, and possibly the 100-ish applications Donuts and Rightside cooperated on.

The ICANN bylaws say the board has to consider the IRP’s findings at its next meeting, for which there’s currently no published date, where feasible.

I should note that, while Donuts acquired Afilias last December, the deal did not include its .web application, which is why both the panel’s decision and this article refer to “Afilias” throughout.

Verisign hopeful after decision reached in .web gTLD case

The fate of .web has been decided, over 20 years after it was first applied for, and Verisign thinks it might emerge triumphant.

The company said last night that the ICANN Independent Review Panel handling the case of Afilias v ICANN reached a decision May 20 and delivered it to Verisign the following day.

Verisign says the panel “dismissed Afilias’ claims for relief seeking to invalidate the .web auction and to award the .web TLD to Afilias, concluding that such issues were beyond its jurisdiction.”

Sounds good for Verisign so far. Afilias wanted its $135 million bid for .web, submitted via an intermediary called Nu Dot Co, thrown out due to claims that ICANN violated its own bylaws by not sufficiently vetting the bidder.

But Verisign goes on to say “the panel’s ruling recommends that ICANN’s Board of Directors consider the objections made about the .web auction and then make a decision on the delegation of .web”.

It adds that the panel found that ICANN violated its fairness and transparency commitments:

With respect to ICANN, the ruling finds that certain actions and/or inaction by ICANN in response to Afilias’ objections violated aspects of ICANN’s bylaws related to transparency and fairness. These findings are particular to ICANN’s actions and not conduct by Verisign. Verisign anticipates that ICANN’s Board will review the panel’s ruling and proceed consistent with the panel’s recommendation to consider the objections and make a decision on the delegation of .web.

Based on Verisign’s statements, it seems that ICANN lost, but Afilias didn’t win.

The revelation was buried in a Securities and Exchange Commission filing on an unrelated financial matter last night. Hat tip to @jintlaw for spotting and tweeting about it.

It’s the most eagerly anticipated IRP ruling since 2011’s .xxx case, but in stark contrast to Rod “let’s draft this tweet” Beckstrom-era ICANN, where the decision was posted in a matter of hours, the 2021 org has not yet posted the panel’s findings or made a public statement acknowledging the ruling.

Verisign says it intends to “vigorously pursue” .web, but “can provide no assurance” as to which way the ICANN board of directors will swing.

Decision on $135 million .web auction expected in weeks

ICANN, Verisign, Donuts, and the other applicants for .web will find out who gets to control the fiercely contested gTLD by the first week of June at the latest, according to Verisign’s CEO.

Jim Bidzos told analysts tonight that the Independent Review Process panel currently handling a complaint filed by Afilias declared its case closed April 7, and said that a decision will come within 60 days.

Afilias, now owned by Donuts, came second in an ICANN “auction of last resort” in which a Verisign-backed company called Nu Dot Co agreed to pay $135 million for the coveted string.

Afilias wants the auction declared invalid because ICANN, it claims, did not sufficiently pursue allegations that NDC was being secretly bankrolled by Verisign, which it says broke ICANN bylaws and new gTLD application rules.

This is denied by ICANN, as well as NDC and Verisign, which have filed legal documents with the IRP panel despite not being parties.

Afilias and others suspect that Verisign wants .web in order to bury it, keeping what could be a strong .com competitor weak, which Verisign also denies.

The IRP panel held a seven-day virtual hearing last August, but has continued to receive briefs from ICANN and Afilias since then.

Donuts boss discusses shock Afilias deal

Afilias is to spin off its registrar business and also its contested application for the .web gTLD, following its acquisition by Donuts, according to Donuts CEO Akram Atallah.

Speaking to DI last night, Atallah explained a little about how the deal, which creates a registry with about 450 strings under management, came about.

Rather than a straightforward bilateral negotiation, is seems like Afilias was shopping itself around for a buyer. Several companies were invited to bid, and Donuts won. Atallah said he does not know how many, or which, bidders Donuts was competing against.

Afilias was making over $100 million a year in revenue last time its accounts were published in 2017, but its largest gTLDs are in decline and it took a big hit when Public Interest Registry renegotiated its back-end contract for .org in 2018.

The acquisition, the value of which has not been disclosed, does not include Afilias’ registrar or mobile businesses, which Atallah said will be spun off.

He also revealed that the deal does not include Afilias’ .web gTLD application, which came second in an ICANN auction won by a Verisign-backed bidder a few years back.

Afilias is currently waiting for the results of an Independent Review Process case that seeks to overturn the winning $135 million bid and award the potentially lucrative gTLD to Afilias. The case was heard in August and a decision is surely not many months away.

What the deal does include are all of Afilias’ registry assets, including its owned gTLDs and its back-end service provider contracts.

I asked Atallah what the plans are for migrating or integrating the two registry platforms. While Afilias runs its own data centers, Donuts migrated its registry to Amazon’s AWS cloud service earlier this year.

“We have to make sure whatever we do is as painless as possible to our registrar channel and partners,” he said. “We believe that at least on the new gTLDs that they have it will probably be easier for us to move them to our back-end, which is on the cloud already… We’ll probably do that fairly quickly.”

“But remember they have other registries and ccTLDs that don’t own that they run on their back-end, so there’ll be business issues and negotiations there to see what we can do there,” he added.

While he’s not expecting anyone to notice any big changes immediately, Atallah said that over time features such as the companies’ different EPP commands will be merged, and that valued-added services will start to cross-pollinate.

“All of the features we have on our TLDs will migrate to their TLDs and vice versa,” he said.

That means things like the Domain Protected Marks List, a defensive registration service for trademark owners, will start to show up in Afilias gTLDs before long, he said.

I asked about the possibility of layoffs, something that is no doubt worrying staff at both companies right now and seems quite possible given the move to the cloud, but Atallah said it was too early to say. Nothing will change until the deal closes at the end of the year, he said.

“Once we actually close, we’ll sit down with the management of the Afilias registry team and look at all the different assets that we have and try to pick the best in class in technology and services,” he said.

Having seen some mutterings about competition concerns, I put that question to Atallah. He laughed it away, pointing out that, even combined with Afilias, Donuts will have fewer than 15 million domains under management.

.web ruling might not come this year

A decision about who gets to run the .web gTLD may not arrive until early next year, according to Verisign CEO Jim Bidzos.

“A final decision from the [Independent Review Process[ panel may be issued later this year or early next year,” he told analysts late last week.

.web sold at auction for $135 million four years ago to a company being secretly bankrolled by Verisign, but the outcome is being challenged in the IRP by runner-up bidder Afilias.

Afilias argues that the auction should be voided because ICANN failed to sufficiently investigate links between Verisign and the winning bidder. ICANN denies any wrongdoing.

It’s widely believed that .web is the strongest potential competitor to Verisign’s .com, and its attempt to secure the string is largely defensive.

The IRP case heard several days of testimony in August and the panel retired to consider its decision.