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Is the ICC ripping off new gTLD objectors?

Kevin Murphy, June 27, 2013, 09:28:16 (UTC), Domain Policy

New gTLD applicants have reportedly complained to ICANN about the unexpectedly high cost of dealing with objections.

The International Chamber of Commerce has apparently been quoting objectors prices as high as €150,000 for a three-person panel to handle a formal community objection.

At $195,000, that’s almost $10,000 more than the original ICANN application fee.

Because Community Objections run on a loser-pays basis, the stakes are high indeed. An applicant could lose its application, most of its application fee, and still have to pay the objector’s fees.

The complaints emerged during a session with ICANN new gTLD program head Christine Willett at a meeting in Brussels earlier this week, according to consultant and occasional DI contributor Stephane Van Gelder.

Writing on the NetNames blog yesterday, Van Gelder quoted Willett as saying:

We are aware that ICC fees are more than people were expecting. Some applicants have been quoted around 50,000 Euros for a one expert panel and 150,000 Euros for a three expert panel. Although in the same order of magnitude as the cost estimate listed in the applicant guidebook, they are still higher. In some cases, significantly higher. In fact, we had one applicant write to us last week saying that their quoted expert fee was more than the ICANN fees for submitting their application in the first place! So we have reached out to ICC and are hoping they can provide some rationale for the costs they are quoting.

The Applicant Guidebook does not detail the fees charged by dispute resolution providers, but materials provided by the ICC (pdf) say that its admin costs are €12,000 and €17,000 for a one-person and three-person panel respectively. The hourly rate for the panelists is €450, it says.

With a €150,000 total cost, back of the envelope doodling suggests that each panelist expects to spend around 100 hours working on each case — over two weeks at seven hours a day.

By contrast, the World Intellectual Property Organization’s fees for handling Legal Rights Objections with a three-person panel start at $23,000 ($3,000 for WIPO, $20,000 for the panelists).

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Comments (4)

  1. zack says:

    So another, potentially significant, impact to cash flow. Us little guys are just getting beat down by the “man”

  2. Kevin,

    I agree with all involved. These ICC fees are an outrage and once again is another instance in which portfolio applicants are favored over communities. As you may well know the Community Objections are split in two parts: standing and harm. If standing fails (which is 50% of the Objection) then the panelist does not need to continue with the “harm” section.

    In our example we have 10 Objections with IDENTICAL standing since it is the SAME Objector each time with an average case cost of nearly $60,000 for each case (even in CONSOLIDATED cases!). You would assume that the ICC only have to determine standing ONCE (which is the most logical, sensible, consistent, fair and cost effective approach) and then move on with the “harm” section of the 10. However it is clear we are getting charged for the “standing” ten (10) times (emphasis added) instead of once.

    Furthermore Community objectors relied on the Applicant Guidebook for costs which clearly stated that “ICANN further estimates that an hourly rate based proceeding with a one-member panel could range from USD 32,000 to USD 56,000” for each mutually-exclusive case.

    Our 10 cases are NOT mutually-exclusive since it is the same Objector (10 times) and the “harm” element is almost identical and around the same subject-matter reiterated by GAC Advice AND accepted by ICANN’s New gTLD Program Committee (NGPC): lack of appropriate enhanced safeguards for sensitive strings, lack of appropriate governance structure and exclusive access (closed-registry).

    Our question is why do community objectors (who are non-for profits) have to come up with 10*$60,000= $600,000 to voice the SAME opinions that GAC, the ICANN Community and recently the U.S Government (Senetor Rockefellar letter) have expressed for sensitive strings, especially if the “Standing” part (50% of each Objection case) is the same all 10 times? Furthermore, both GAC and the NGPC have agreed that community opinion in a contention set should be heard but how will these opinions be heard if the ICC is asking for nearly $600,000 for one Objector to voice its opinion on music-themed strings under the SAME issues GAC and U.S Government have warned against and advised on?

    Even at a minimum calculation (without consolidations) that ICANN has offered in the Applicant Guidebook for mutually-exclusive cases where standing is different the lowest amount is $32,000 per case (i.e cost would be $320,000 for 10 mutually exclusive cases). The highest part of the range is $56,000 (i.e cost would be $560,000 for mutually exclusive cases). It is an outrage that community Objectors are asked to pay $60,000 per case ten times when the objector’s standing is IDENTICAL.

    Furthermore, the ICC has NOT broken down any of their costs as required in ICANN Guidebook: “Before acceptance of objections, each DRSP will publish a schedule of costs or statement of how costs will be calculated for the proceedings that it administers under this procedure.”

    One of the most glaring examples is three consolidated cases with the SAME Applicant and Objector, with IDENTICALLY-written applications, IDENTICAL objections, IDENTICAL standing and harm, and IDENTICAL applicant responses to objections for synonym strings. ICC correctly decided after our request to consolidate these cases BUT still charged the same community objector three times instead of once, treating these cases mutually-exclusively (i.e nearly $60,000 x 3).

    We have expressed our deep concerns to the ICANN CEO, Chairman, the NGPC and the ICC and are waiting for resolution on the matter in a fair, transparent and cost-effective manner that would not compromise the ICC and gTLD process and ensure consistent, transparent and fair results are rendered for BOTH Objectors and Applicants. We have asked for cost explanations and a re-adjustment on these fees to reflect an appropriate and well-constructed calculation of these fees given the circumstances.

    It is clear that in the absence of a more properly tailored projected cost for the Objections, accounting for consolidation and economies of scale, BOTH Objectors and Applicants are being prejudiced by the Centre’s currently proposed Article 14 costs.

    P.S Another question I have is whether the ICANN Community is aware of the excessive costs that ICANN needs to pay for each of the 24 cases brought by the Independent Objector? I have heard of a case costing €179,000 for an Independent Objector objection against ONE health-related gTLD reviewed by a panel of 3 experts who have limited or no experience in the medical field according to their resumes. €179,000 PER case by the Independent Objector is a complete waste of ICANN money (registrant/new gTLD applicant money). For starters, most of these cases will be a waste of ICANN money since they nearly all fail the material harm test of the string where the related “community depends upon the DNS for its core activities.” In our case it is unquestionable that the music community does rely on the Internet for core activities (and business) but it is obvious that the Amazon region, charities and health-related communities do NOT rely on the DNS for their core activities. I believe the ICANN Objector will most likely lose these cases and all this significant money for most of the 24 cases will be wasted by ICANN.

  3. Andrew says:

    Sounds pretty bad, Constantine. So have the “grouped” all of your .music objections into one objection, or do they just have the same panelist on each one?

    • Andrew,

      I agree with you. To answer your question there are 5 cases that were consolidated and another 3 other cases that were consolidated as well. 1 panelist for EACH consolidation. You would think Panelist would review Community Objector standing ONCE (since it is the same Objector and identical subject-matter).

      There was also another case against a identical portfolio applicant in regards to two music-themed strings that had the SAME application policies and identical subject matter. The Community Objection was identical as well. However in that case it was NOT consolidated. We believe this could compromise the process especially if two different decisions are rendered based on IDENTICAL applications.

      In regards to the fees they are indeed exorbitant, not accounted for or substantiated and unpredictable. Community Objector’s relied on the Applicant Guidebook for guidance on the predicted fees and those fees grossly exceeded expectations. We fought for consolidations and we were given some however the fees again were NOT adjusted to reflect that even though we were told consolidations would have reduced fees (economies of scale and determining standing ONCE is quite a transparent and obvious reason).

      While we understand experts need to be paid appropriately we also think there is a substantial discrepancy between a WIPO expert and an ICC expert. A WIPO expert requires $8000 to render a decision based on 20 pages of text. An ICC expert requires nearly $60,000 (in our cases at least) for 20 pages of text as well (i.e both WIPO and ICC experts will read the same amount of content from Objectors). Why is there such a gross discrepancy and ICC experts charge over 6-7 times the cost of a WIPO expert for the same amount of pages per Objection? Can you imagine if a 3-person panel was selected for these Community Objections? Would have cost way over a million dollars which does not even include legal fees.

      One can clearly reason that an expert on a topic does not require 100 hours PER case at 450 Euros an hour to figure out whether an Objector has standing (50% of case is “standing”) i.e if they represent “A significant portion of community” and whether lack of appropriate safeguards for “open applications” or “exclusive access” in regards to closed-registries create harm to the community’s interests. An expert should be able to make this determination pretty quick and the arguments are the SAME each time. Why? Because they are an expert in the field at hand and they should be able to make decisions in a reasonable amount of time. WIPO, in my opinion, has got it right 100%.

      You and the rest of the ICANN community can be the judge whether these ICC costs are appropriate for such a process and communities to object (taking into context that Community Objectors are NOT for-profit corporations). The misalignment between the new gTLD Program goals and incorporating a fair and transparent process in relation to the Community part of the new gTLD process has once again been exposed. This entire process again was set up to favor those with the most money i.e portfolio applicants and publicly traded companies such as Google and Amazon. The Community Objection process AND the auction process clearly illustrates that without any shadow of the doubt. You would think at least the “Community” Objection component of the process would be set up to allow Communities to object in a cost-efficient manner. The sentiment of paying such excessive fees to have a community opinion heard is certainly quite a twist in this ever-developing, flawed new gTLD process.

      One may even argue that an Objector could have applied for numerous gTLDs instead of Objecting expressing SAME issues that GAC and U.S Government have recently posed.

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