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ANA chief calls for new gTLDs to be suspended

Kevin Murphy, August 9, 2011, 13:35:50 (UTC), Domain Policy

The president of the Association of National Advertisers said the organization may sue ICANN unless it suspends its new top-level domains program.

Speaking to DomainIncite, ANA’s Bob Liodice said that American industry is “horrified” by the program, which he believes will cost his members a “quite humongous sum of money”.

Liodice wrote to ICANN president Rod Beckstrom a week ago, demanding the program be abandoned and dropping major hints that a lawsuit would be the alternative.

ANA’s board of directors, comprised of representatives of 36 of the largest companies in the US, is “unanimous” in its opposition to the program, he told me.

“We’ve had many conversations with our members, brand owners in the US, and nobody supports this to our knowledge,” Liodice said. “If American industry is not supporting the recommendation to do this, then who is? What is the benefit if brands owners are saying they’re horrified?”

ANA’s members simply do not understand why the program has been introduced, Liodice indicated.

“What’s the problem, what is ICANN trying to solve?” he said.

I put it to him that increasing competition in the registry space is in many ways ICANN’s raison d’etre, built into its founding principles.

“Just because this is something that was supposed to be done back in the Clinton days doesn’t mean it has to be done today,” he said. “The world has changed.”

“I think this is more for the benefit of ICANN than for the benefit of the [advertising] industry,” he said. “ICANN will secure substantial revenue for these changes and put incredible burdens on the industry to no benefit for the industry.”

ICANN, which is obviously a non-profit, says it has priced the program on a cost-recovery basis.

Not convinced by .brands

I asked Liodice if any of ANA’s members had expressed interest in “.brand” gTLDs, and put it to him that enjoy.coke or iwantmy.mtv might be innovative ways to advertise.

“That is not an issue right now,” he said. “The brand for the most part is in the URL anyway, what benefit does it get from moving to right of the dot?”

“The industry is in a period of stability and is very satisfied with status quo,” he added.

Liodice was not aware of the .brand announcements from Canon and Hitachi, but expressed skepticism about their reasons for applying.

“Are those companies saying this is important to me and will further my business interests?” he asked.

Canon USA does appear to be a member of ANA, although it does not have a seat on its board. Hitachi is not a member.

ANA’s plan

Last week’s letter gave Beckstrom an August 22 deadline to respond. The first thing ANA intends to do is wait for his reply, Liodice said.

Anything other than an undertaking to suspend the program for talks is likely to see an escalation.

“We first have to ensure this program is suspended,” Liodice said. “We’re trying to halt the introduction at this point in time and suspend it until we can have these conversations.”

ANA also hopes to speak to the US Department of Commerce, which has an oversight relationship with ICANN, as well as to members of Congress.

“We are lobbying members of Congress to make sure they’re aware of the detrimental characteristics of this, particularly at a time when the world is in great disorder with the financial crisis,” Liodice said.

There’s also the possibility of court action.

While stopping short of saying ANA will definitely sue, Liodice did say that the organization’s lawyers are looking into possible causes of action.

“If the reply is not consistent [with ANA's requests] we will explore that possibility,” he said.

ANA would be represented by the law firm Reed Smith, which has already published its own statement of support for Liodice’s letter on its web site.

It’s good to talk

My feeling is that some of ANA’s concerns are already dealt with by the program’s Applicant Guidebook, and that a conversation explaining this could help reduce tensions.

Liodice, for example, appears convinced that top-level cybersquatting will be possible – that .coke could be registered by somebody other than Coca-Cola.

My view is that such an obvious transgression would be easily (and relatively cheaply) dealt with using the Legal Rights Objection mechanism already in the Guidebook.

That’s assuming, of course, that the $185,000 application fee failed to be a deterrent, and that a registry back-end provider dumb enough to put its name to the bid could be found.

But even if ANA can be convinced that the risk of TLD-squatting is negligible, its concerns about the potential for problems at the second level will be harder to address.

Let’s face it, while estimates of the increased cost of trademark enforcement vary wildly, nobody has disputed that there will be a cost.

One ANA member has estimated that the per-brand cost to companies would be $2 million over 10 years, Liodice said.

ANA does not appear to have spent much time getting involved in the development of the new gTLD program lately — the most recent submission I could find dates from 2009 — but Liodice said its counsel Reed Smith has been representing it in the ICANN process.

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Comments (15)

  1. Kristina says:

    Good interview, Kevin. .nxt’s website lists .motorola as a confirmed .brand application. That seems to contradict the statement that all members of the ANA Board of Directors oppose new gTLDs. Would be interested to know which is correct.

    • Kevin Murphy says:

      Interesting. I hadn’t spotted that one. Possibly one department not talking to another? Or maybe a reluctantly prepared defensive application?

  2. Dear Kevin,

    I am shocked — shocked! — that ICANN did not send a delegation to the ANA to ask their opinion, especially as ANA has been sending strong indications of their disapproval of new gTLDs by boycotting all meetings and working groups relating to new gTLDs, and by refusing to comment during any of the many public comment periods over the last five years. So high is their dudgeon that many of us have never heard of them before. ICANN clearly has a long way to go before it be trusted to implement sensible policy changes.

    It is embarrassing to me as a user of the Internet that a change of this magnitude and importance has been unveiled so suddenly and in the “dead of the night” so to speak — to such an extent that an organization as nimble, connected and Internet-savvy as the ANA was caught unawares.

    I have no doubt that the ANA were going to make their views known at the appropriate time, but ICANN has forced them to come out in public by conducting “hurry-up” policy development that lasted only five years — one quarter of the time that the World Wide Web has been around, but only a small fraction of the time that lobbying groups have been putting out notices that they are shocked — shocked! — by changes that benefit the world but mildly inconvenience themselves.

    It is time for the U.S. government to “clean house” and listen to the real stakeholders who have been heretofore too polite to say anything.

    Yours in utter disbelief,

    Antony

  3. You Are Elle says:

    Where was the ANA during the discussion period?
    What problem do the new extensions solve? None of course but the cost of making domain names is well um free and the potential to profit from sam huge. Remember, the guys who made the most money during the gold rush were those selling picks and shovels to the miners. The whole new system stinks of brand extorsion and easy money. Bring back .mobi!

  4. Assuming that they have standing to sue, what would their cause of action be?
    What’s their proof of irreparable harm that might cause a judge to enjoin the new gTLD program?
    Given that the USA created ICANN, ended direct oversight in 2009, sits on the GAC, and has lately been saying that the outcome of the gTLD process shows the viability and value of the multi-stakeholder model — and that ICANN engaged in a 3-year development process of the Applicant Guidebook, going through five separate iterations, and that ANA did little in the way of participation — what judge is going to decide that this isn’t a political/policy issue that the judiciary should avoid getting entangled with?
    I’ve heard many veiled threats of lawsuits against ICANN to halt the new gTLD program, but I’ve yet to hear one of them backed up by a convincing legal argument that a court would buy. Let’s see if they really pull the trigger — and what their theory is — and if a court buys it.

  5. John Smith says:

    Ia Ia Shub Nigurrath, the old ones will be coming if the new gTLD program is implemented.

    Beware!

    Doom! Doooom! DOOOOM!

  6. Frankie Say Relax says:

    No need to get your panties up in a bunch. I agree that ICANN should not have introduced the new gtld’s; however, I don’t see that rocket ship ever blasting off.

    If there truly was a demand for additional extentions, how does one explain the failure of .Biz, .Travel, .Aero, .Museum, .Jobs, .Pro, .Mobi, .Coop, .Cat and .US? All huge cyber fails based on tlds that ICANN had previously identified as in the highest demand.

    So I go and buy the rights to sell .DOG, what makes me think it will sell when .CAT failed on a massive scale? Or, if a generic such as .Biz didn’t catch on, why will .web? And if .US failed, who is going to want .USA or .NYC or .Tallahassee? Sure, a few may, but surely not enough to make a registry profitable and to sustain them for the long road ahead.

    I say let them get introduced. Let the investors in new registries lose their money. Let the flawed concept fail. Survival of the fittest.

    Seems obvious to me that .com will end up victorious in this tld battle. Which of the small tld registrars has the trillions of dollars needed to unbrainwash the world from typing .com? Icann themselves will not do it. Promotion is the repsposibility of each indivisual registrar.

    What other extension will be able to convince Apple to add the equivalet of the .com button button — or the equivalent of cntl+enter? No one.

    Anyone who does successfully register a new tld will simply end up helping the owners of the corresponding .com attract additional traffic by way of accidental type-ins.

    So, relax, the new tld proposal is on an express train to nowhere with only fools on board.

  7. Jean Guillon says:

    .CAT failed ?

    .CAT is a very, but a “very”, strong identity in Cataluna.

    So it failed because it does not sell as well as a .COM ?

    OK, now I get it :-)

  8. John Smith says:

    Thats the thing:

    Frankie measures success in size only, but size matters not. What matters if the TLD succeeds at filling the role it is supposed to fill.

    One may say that .biz failed, since it has not become the top business TLD. .US did not grow as much as it could have due to the strict adherance to the NEXUS policies, making it harder to get than a .COM, therefore seeing less growth. But to describe it as failing, would be going out too far.

    .info is moderately successful; .EU enjoys a strong presence in its market; even .XXX has already made a strong showing due to its founders campaign, and that is pre-launch. There will be a market for new TLDs.

    Remember: Measure success on what you want to achieve. If replacing .COM is your goal, you will fail. But if it is providing a value, fulfilling a role or even just turning a moderate profit, there will be a lot of successes in the new gTLD world.

  9. Thomas Lenz says:

    Thank you Jean & John! Some people are very shortsighted when it comes to definitions of success and even industry/consumer needs. Mr. Liodice for example seems to forget that we are talking about a global resource : “If American industry is not supporting the recommendation to do this, then who is?” What a question! Attending ICANN meetings might have been beneficial.

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