ICANN explains its side of UNR registry transfer holdup

New “contractual-right-counter-parties” still waiting for transfers.

ICANN published an explanation last week for why it still hasn’t approved any UNR registry transfer requests from last year.

Frank Schilling auctioned off his 23 top-level domain names for over $40 million at the end of April. To date, ICANN hasn’t approved a single transfer to the new “owners.”

I use “owners” in quotes because that is one of the holdups. In its explanation, ICANN General Counsel, John Jeffrey, and SVP of Global Domains and Strategy, Theresa Swinehart, write:

The marketing materials and other communications associated with the UNR auctions indicated that the potential assignees would receive ownership rights, possibly denoting some form of property right or interest…These assertions raised questions and concerns during our review, particularly with regard to ownership, as TLDs are not considered property.

Technically, you’re getting a contractual right to operate a top level domain. But they are treated like property by their operators, and I can’t think of any marketing material for new top level domain applicants that has said, “We’ll help you get the contractual rights to operate a namespace on the web!”. Tell dot-brand owners they don’t actually “own” their top level domain. There’s a difference between how things are marketed and what the contracts technically say.

As I’ve written about, the other issue is a marketing stunt that backfired. You’ll recall that, around the time the auctions were held, adding NFT to anything instantly grabbed attention. (It still kind of does.) So UNR said auction winners would also get an NFT of the top level domains that control their namespace in Ethereum Name Service (ENS).

It was a silly marketing stunt, and one made moot by an update to ENS last year. ENS now works with all top level domains, so ENS would not make its own version of, say, .hiphop.

ICANN said it has been informed that the NFTs have been destroyed. It writes:

This only serves to make the issue more confusing since the NFTs were marketed as enhancing the value of the offering, but now are set out as unimportant and of no value.

Again, this was a marketing stunt to attract attention to the new TLDs. I’m sure anyone other than a lawyer would see this.

The backers of .hiphop have been vocal about the delay, but I imagine other buyers are upset that the transfers were delayed beyond the calendar year.

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