HosterStats comments on the ICANN CCT draft report Parking section

These are the HosterStats comments on the ICANN Consumer Choice and Trust draft report. The comments deal with the “parking” section where the ICANN CCT tried to understand what was going on with new gTLD and legacy gTLD web usage.

The CCT review team did not understand the complexities of measuring web usage in TLDs. While well intentioned, it relied data generated by a highly simplistic methodology that, among other mistakes, considered redirects to be “parking”. This negatively impacted the report’s conclusions on “parking”.

1.1 Parking, Page 3: “Given the high percentage of “parked” registrations in new gTLDs, even relative to the high percentage of parking in legacy gTLDs, the Review Team sought to understand whether this phenomenon would affect its conclusions regarding the competitive impact of the New gTLD Program.”

This links directly to the approach used to measure “parking” in the new and legacy gTLDs. The reality is that different TLDs have different rates of “parking” and this is often a function of the dominant market for the TLD and the age of the TLD. It is like, in terms of development, comparing a rock with an iPhone and wondering why one cannot receive phone calls on the rock as it has silicon in it too.

Grouping all new gTLDs as a single TLD is not a good way to measure this the competitive impact of new gTLDs. The new gTLDs form a set of TLDs that were launched on different dates and target different markets. Many of the legacy gTLDs have been in operation for over a decade and some longer. Their web usage patterns are quite different to newly launched gTLDs. It can, as acknowledged by the review team, take up to five years for the web usage trends in new gTLDs to stabilise.

The review team did not establish what new gTLDs are competing with other specific gTLDs or ccTLDs. Even if a new gTLD registration has no website, it may still be used for e-mail or other services. It might also be a brand protection registration. Brand protection registrations are good indications of the popularity of a new TLD. Defining markets and competition, especially with generic TLDs, is difficult and it all seems to come back to the review team, through no fault of its own, not having sufficient data to analyse its hypotheses.

1.1 Parking, Page 3: “While several hypotheses as to potential impact of parking on competition were advanced, no conclusive evidence was available to support them in the near term.

The important aspect with any new gTLD, or any new TLD, is web usage. Usage drives awareness which drives development and increases renewals. How are the domain names being used? Is there active content on these websites? How do these TLDs link to existing TLDs in their target markets? These are the important questions. The review team was unable to even come close to answering any of these questions. It just didn’t have the necessary data, the analysis and the

1.1, Parking, Page 3: “While the Review Team did not find definitive evidence of parking’s effect on competition, we found some differentiation between regions when it comes to parking. In particular, there appears to be more parked domains in Chinese language domains where more speculation seems to be occurring.”

The review team had to rely on surveys that were not sufficiently comprehensive in terms of metrics and analytical depth. This was glaringly clear when it came to trying to understand what was happening in the Chinese market.

The Chinese market is a very complex one in that it has speculative dynamics, ordinary web development, discounting driven registration volume and different web usage trends compared to some of the legacy gTLDs. While it has elements of Pay Per Click (PPC) advertising and parking, it also has, as befits speculation, significant numbers of domain names that are for sale on domain name auction websites.

The review team’s grouping of Chinese language gTLDs (XIN, WANG, TOP, XN–SES554G, REN) to illustrate how “parking” is higher in Chinese language domain names ignores the fact that Chinese registrants also register domain names in other new gTLDs. Some of these new gTLDs have specifically engaged in promotional discounting and tend to have higher levels of speculative registrations, from many countries, than new gTLDs that have higher registration fees.

Because of the poor methodology used in determining if a website or domain name is “parked”, the review team did not have the necessary data to measure the effect of these speculative registrations and how they are being used.

Some of these registrations have websites with automatically generated affiliate pages and seemingly deep content. Some speculative registrations in the Chinese market have lottery and gambling landing pages/websites rather than developed content. To an unsophisticated methodology, such as that relied upon by the review team, these websites would not appear as “parked” and would give a misleading view of web usage in the gTLD. Statistics on the effect of speculative registrations and their renewal rates were posted to the mailing list for the gTLD Marketplace Health Index.

The review team, because of the lack of historical data, could not recognise the fact that many of these websites are “one year wonders”. They do not renew at high rates and it is cheaper for the registrant to avail of the latest discounting promotion rather than renew a domain name at a full registration fee.

Speculative registrations in a newly launched gTLD tend to have a higher than average non-renewal rate. They are registered with the intent of being sold on for a profit. When they cannot be sold on for a profit, they are generally deleted unless the registrant wishes to renew them in the hope that one day they will be sold for a profit. The introduction of discounted registrations amplified speculative trends in newly launched gTLDs and since 2014, there has been a drive amongst the larger new gTLDs to grow the number of domains under management by discounting. As has been seen with the XYZ gTLD’s 1 cent promotion, heavy discounting leads to high rates of non-renewal.

Discounting, when overused, locks the registry into a boom and bust cycle where it finds itself chasing the next discounting deal in order to keep the number of new registrations and renewals ahead of the deletions.

1.1 Parking, Page 3: “There may be some correlation between parking and malware distribution, but that is not as strong and indicative as the overall trend of lower malware distribution rates than those of legacy gTLDs. Nonetheless, the malware distribution rate gap between legacy and new gTLDs appears to be shrinking, and it behooves the community to further explore the correlation between parking and malware distribution.”

While the recommendation for further analysis and exploration is welcome, the initial hypothesis seems to be based on a somewhat narrow focus on malware propagation and definitions.

Active websites, rather than “parked” websites, are more efficient vectors for malware distribution simply because they have higher levels of traffic than “parked” domain names. However, “parked” domain names are not generally as effective or targeted as a means of spreading malware.

Compromised and infected websites are more likely to be active websites using vulnerable software and plug-ins rather than “parked” domain names. Compromised control panel software is generally a short-lived event. Abandoned websites tend to be a greater risk when it comes to malware distribution because they remain unpatched, unsecured and abused.

1.1 Parking, Page 4: “The overall results of the Review Team’s observations on parking are inconclusive and suggest the need for further research not limited to the impact of new gTLDs. Therefore, the Review Team recommends a more rigorous collection of data around various types of parking to facilitate further examination by the community of the impact of parking on competition, consumer trust and its proxy, DNS abuse.”

The acknowledgement of the need for further research is welcome. It would have been better if the review team had reached out to the community for advice rather than attempting to muddle through with flawed conclusions based on poorly defined metrics and insufficient data.

The problem of inconclusive results has its genesis in the lack of experience of the review team in the complex field of web usage measurements. More rigorous collection and analysis would have been a good thing but the emphasis should be on web usage trends rather than simply on “parking”.

ICANN should have been more proactive in terms of providing data. It should not have expected that people with limited expertise in various fields could properly specify, on their own, the kind of data needed and be assured that the data received was of sufficient quality and depth to test various hypotheses. For future review teams, ICANN needs to reevaluate its selection process to ensure a team with the necessary combination of skillsets and expertise, (domain name industry, technical, commercial, legal and economic) to carry out the review and, the necessary data, and, if necessary, directly help the teams in formulating hypotheses.

If the necessary data or help is unavailable from ICANN, future review teams should reach out to the community for help when an element of the review is beyond their collective levels of expertise.