@Christian: I can't do Zesty short term, I don't use it.

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https://bugs.launchpad.net/bugs/1726017

Title:
  dnsmasq prematurely returns REFUSED, breaking resolver

Status in dnsmasq package in Ubuntu:
  Fix Released
Status in dnsmasq source package in Xenial:
  In Progress
Status in dnsmasq source package in Zesty:
  Fix Committed

Bug description:
  [Impact]

   * DNS name resolution fails in certain network configurations, where
     different DNS servers are responsible for different domains and one or
     more servers reply REFUSED to queries that regard other domains than
     their own. Without the patch, dnsmasq returns a negative reply to
     if only one such negative answer is received from a forwarder, even
     if other forwarders return valid responses.

     This breaks
     the resolver and practically all internet connectivity, including web
     browsing, email, and receiving updates.

   * This should be backported to stable to fix internet connectivity
     for users.

   * The patch fixes the problem by querying all servers and only returning
     a negative reply to the requestor only if *all* forwarders return negative
     responses.

  [Test Case]

   * It should be possible to test this in a virtual network. One DNS server
     should be responsible for queries to the outside world, and the other one
     could be a DHCP/DNS instance (perhaps dnsmasq, also) that handles internal
     IP addresses and names. It's important that at least one of these servers
     return REFUSED to queries that don't belong into its realm (assuming the
     domain name is "my.net", the server for "my.net" would reply REFUSED to
     "ubuntu.com" and every other domain. I am not sure if this is normally the
     case, all I can say is that my Linux-based ASUS router does it.

     Connect an Ubuntu VM to this network.

     To aggravate the problem, the DHCP server would put the internal DNS
     server first in the nameservers field. If that's the case, the problem
     would also occur if the client used "strict-order" in dnsmasq.conf.

  [Regression Potential]

   * I don't see any. Would there be networks where admins rely upon getting
     NXDOMAIN back if just one server fails for a DNS query? I don't know.

   * [racb] As the behaviour in the area of REFUSED and SERVFAIL is
  being changed, it's probably worth checking during SRU verification
  that dnsmasq correctly passes back successful, REFUSED, SERVFAIL,
  zero-answer and 1+ answer responses in the simple, single upstream DNS
  server case. If there is a regression introduced by these patches, it
  is likely to be in the area of handling SERVFAIL, REFUSED and
  successful replies.

  [Other Info]

  Original bug description follows.

  Seen with dnsmasq 2.75-1ubuntu0.16.04.3, after Trusty->Xenial update.

  In my local network, I have two DNS servers; 192.168.1.1 is the local
  DHCP/DNS server configured to reply to queries inside the local
  network, and 192.168.1.4 is the forwarder in my DSL Router,
  responsible to answer queries about the outside world. THe DHCP server
  returns these in the order 192.168.1.4,192.168.1.1. The internal
  server replies REFUSED to queries about external domains.

  This configuration has worked well with Ubuntu 14.04 and other Linux
  Distros (using Fedora and OpenSUSE internally here), as well as
  various other OSes.

  It does not work with Ubuntu 16.04. NetworkManager's dnsmasq instance
  pushes the REFUSED reply from 192.168.1.1 to applications and ignores
  the successful reply from 2.168.1.4. This causes all DNS queries to
  external servers to fail.

  I believe this is fixed in dnsmasq 2.76 and related to

  http://lists.thekelleys.org.uk/pipermail/dnsmasq-
  discuss/2016q1/010263.html

  
http://thekelleys.org.uk/gitweb/?p=dnsmasq.git;a=commitdiff;h=68f6312d4bae30b78daafcd6f51dc441b8685b1e
  http://thekelleys.org.uk/gitweb/?p=dnsmasq.git;a=object;h=4ace25c5d6

  According to these sources, the bug was introduced with
  
http://thekelleys.org.uk/gitweb/?p=dnsmasq.git;a=object;h=51967f9807665dae403f1497b827165c5fa1084b

  In my local setup at least, I can work around the problem by using the
  "strict-order" option to dnsmasq.

  echo strict-order >/etc/NetworkManager/dnsmasq.d/order.conf

  But that's not a general solution. If dnsmasq has several forwarders,
  and some return SERVFAIL or REFUSED and others return SUCCESS, the
  successful answer should be returned to clients, independent of the
  strict-order setting.

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