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Congressmen ask for new gTLDs delay

Kevin Murphy, December 14, 2011, Domain Policy

ICANN should consider delaying the launch of its new top-level domains program, a number of US lawmakers said at a House of Representatives committee hearing today.

If the Senate’s hearing on new gTLDs last week could be characterized as a “win” for ICANN, today’s House meeting probably went in favor of its adversaries in the Association of National Advertisers.

“I don’t think it’s ready for prime time,” Rep. Anna Eshoo said during the Energy & Commerce Committee hearing. “I suggest that it is delayed until consensus is developed among relevant stakeholders.”

That’s exactly what the ANA and the Coalition for Responsible Internet Domain Oversight wanted to hear, and her views were echoed by several other Congresspeople, using similar language.

ICANN’s senior vice president Kurt Pritz, who was put forward to defend the new gTLD program in Washington DC for the second consecutive week, disagreed.

“This process has not been rushed, it’s been seven years in the making,” he said. “All the issues have been discussed and no new issues have been raised.”

National Telecommunications and Information Administration associate administrator Fiona Alexander, there to defend the ICANN process if not its results, observed that “consensus” does not necessarily always mean “unanimity”.

The hearing also heard from Josh Bourne of the Coalition Against Domain Name Abuse, a long-time critic of ICANN and new gTLDs.

CADNA has recently taken a more pragmatic view of the program, coinciding with sister group Fairwinds Partners’ decision to emerge as a new gTLD consultancy.

Bourne therefore found himself not only defending the program but also praising .xxx, saying that its novel trademark protection mechanisms should be mandatory in new gTLDs.

CADNA’s main demand nowadays is for clarity into the dates of subsequent application rounds, which Bourne said would relieve the “condition of scarcity” that the uncertainty has created.

Bourne also said that Congress could fight fraud by revising the the 12-year-old US Anticybersquatting Consumer Protection Act.

Also on the panel as an opponent of the program was Anjali Hansen, an IP attorney with the Better Business Bureau, who came to complain about the cost of defending the “BBB” trademark.

Hansen’s testimony was essentially worthless. When she was not complaining about fraudsters infringing copyright on BBB’s logo (obviously irrelevant in the context of domains) she seemed to be claiming that the Better Business Bureau has exclusive rights to the string “BBB”.

As Pritz noted later, there are 50 registered trademarks for “BBB” – I’ve counted about 18 live ones in the US alone – and any one of those trademark owners would be able to object to .bbb.

There was also substantial confusion about the state of the program. Congressmen conflated separate controversies in order to support the view that new gTLDs should be delayed.

As I’ve noted before, there’s a worrying lack of detail on certain outstanding issues – such as continuity funding requirements – but Congressmen had evidently been fed different talking points and therefore peppered Pritz with questions about the state of ICANN’s negotiations to amend the Registrar Accreditation Agreement, an unrelated matter.

If two themes could be said to have emerged from the hearing, and last week’s Senate hearing, often expressed by the same Congressmen or witnesses, I’d say they were:

First, ICANN should make it harder for criminals to abuse new gTLDs.

Second, ICANN should make it cheaper and easier to obtain new gTLDs.

I would point out that a certain degree of doublethink is required to hold both positions true, but to do so would imply that the necessary singlethink had been done already.

ICANN leaves new gTLD batching and support questions hanging

Kevin Murphy, December 13, 2011, Domain Policy

ICANN came closer to answering two very important questions about the new top-level domains application process at its board meeting last Thursday.

While confirming that cheaper application fees will be made available to worthy applicants, and that some sort of batching system will be introduced, ICANN has provided worryingly few details about both systems, just a month before the new gTLD program starts.

Application batching

ICANN is currently expecting over 1,000 new gTLD applications, but it’s said that it only has the capacity to process 500 at a time. It needs a way to fairly create two or more batches.

Commercial applicants obviously want their gTLDs processed and delegated as quickly as possible, so how the batches are created is obviously a critical detail.

Little progress has been made on this issue since Dakar.

A lottery has been ruled out, according to Thursday’s board resolutions, because it would be likely to attract nuisance lawsuits under California gambling law.

If you’ve been following ICANN closely for the last few months, or reading DI, you already knew this.

The board has also said that there will be no benefit to applying early during the January-April application window. We already knew this too.

Instead, as ICANN staff have said before and the board has now approved, there will be a “secondary time stamp … used for purposes of determining the processing order”.

This system has evidently not been finalized yet. Nevertheless, the resolution contains a few hints about how it might work.

First, the TLD Application System will not be used to acquire the stamps, but it may be used to communicate [something] with applicants.

Acquiring a stamp will require “judgment” by applicants. Getting into the first batch will apparently be a skill game, so as to not invite lottery lawsuits.

There will also be some kind of regional allotment system, so that applicants from outside Europe and North America have just as good a chance of getting into the first batch.

Finally, there will be an opt-out mechanism, so applicants with less urgent applications (.brands, perhaps) can choose to be batched later.

It’s not much to go on, but since the process of acquiring a time stamp will not come into play until after April 12, it’s not something applicants need to worry too much about at the moment.

It’s also not yet clear whether positions in the queue will be transferable. A slot in the first batch could be worth something, to some applicants.

Applicant Support

A mechanism for granting reduced fees to “needy” applicants in the developing world has been on the cards for a while. ICANN set aside $2 million in June to fund an Applicant Support program.

On Thursday, its board of directors approved an application fee reduction from $185,000 to $47,000, for “candidates that qualify according to the established criteria”.

While full details of these criteria have not been revealed, the board resolution suggests that “demonstrating need and operating in the public benefit” are the primary factors.

It’s not clear any more that the support program will be limited to applicants in the developing world, as had been recommended by the Joint Applicant Support working group.

The resolution does not mention geography, and senior VP Kurt Pritz suggested at last week’s US Senate hearing into new gTLDs that the YMCA of the USA may qualify for the reduced fee.

It appears that applicants wanting to take advantage of the reduced fee will have to take a bit of risk, however, paying their $47,000 fee up-front on the understanding that they will lose their money and their application if they are subsequently deemed unworthy of support.

Applicants will not find out if they’ve made the cut until November 2012.

ICANN’s $2 million only covers reduced fees for 14 applicants, and it’s not yet clear what would happen if more than 14 candidates qualify and ICANN cannot find third-party funding to support them.

Essentially, it’s looking a bit messy at the moment, and non-profits are only a little closer to understanding what their funding requirements might be today than they were last week.

Beckstrom to keynote London new gTLDs conference

Kevin Murphy, December 12, 2011, Domain Registries

ICANN CEO Rod Beckstrom will address a half-day conference on new generic top-level domains in London next month, just a few days before ICANN’s application window opens.

The Top Level, scheduled for January 9, is being hosted by Norwegian registry services provder CloudNames, the PR agency Burson-Marsteller and international law firm DLA Piper.

Each company also has an executive speaking, and then there’s a panel discussion.

Although BM is on ICANN’s payroll, having been recently named the recipient of a $900,000 outreach budget, it appears that the conference is not an ICANN initiative.

Tickets for the five-hour event are being sold for €490, or €441 for “early bird” registrations.

It will be presumably one of the last conferences Beckstrom will keynote on his world tour before ICANN starts accepting new gTLD applications, January 12.

US says it will not block the new gTLD program

Kevin Murphy, December 9, 2011, Domain Policy

NTIA boss Larry Strickling has come out in support of ICANN and its new top-level domains program, warning that its opponents “provide ammunition” to authoritarian regimes.

Speaking in Washington DC yesterday, Strickling warned that organizations fighting to put a stop to the new gTLD program risk provoking a UN takeover of the internet.

In a strongly worded defense of the six-year-old ICANN multistakeholder process that created the program, he said:

we are now seeing parties that did not like the outcome of that multistakeholder process trying to collaterally attack the outcome and seek unilateral action by the U.S. government to overturn or delay the product of a six-year multistakeholder process that engaged folks from all over the world.

The multistakeholder process does not guarantee that everyone will be satisfied with the outcome. But it is critical to preserving the model of Internet governance that has been so successful to date that all parties respect and work through the process and accept the outcome once a decision is reached.

When parties ask us to overturn the outcomes of these processes, no matter how well-intentioned the request, they are providing “ammunition” to other countries who attempt to justify their unilateral actions to deny their citizens the free flow of information on the Internet.

This we will not do. There is too much at stake here.

Strickling is assistant secretary at the National Telecommunications and Information Administration, which oversees the US government’s relationship with ICANN and IANA.

He’s made similar remarks in support of the multistakeholder model in the past, but never quite as firmly or directly aimed at opponents of the new gTLD expansion.

While he was diplomatic enough not to single out any one group, he was pretty clearly referring to the recently formed Coalition for Responsible Internet Domain Oversight.

CRIDO was formed by the Association of National Advertisers to fight new gTLDs. Yesterday, it had its day on Capitol Hill, but failed to convince Senators that the program should be stopped.

But Strickling did sound a note of caution about new gTLDs, saying that he agreed with Sen. Jay Rockefeller, who expressed concern about possible negative impacts of the expansion:

We agree with the Chairman’s concerns over how this program will be implemented and its potential negative effect if not implemented properly. We will closely monitor the execution of the program and are committed to working with stakeholders, including U.S. industry, to mitigate any unintended consequences.

But the minutiae of the Applicant Guidebook was not Strickling’s focus. Instead, it was the wider political picture.

The threat of an International Telecommunications Union takeover of the internet’s policy-making functions has plagued ICANN for almost as long as it has existed.

Strickling noted that the ITU’s World Conference on International Telecommunications is coming up one year from now, and that some nations will attempt to usurp ICANN.

Some nations appear to prefer an Internet managed and controlled by nation-states.

We expect that some states will attempt to rewrite the regulation in a manner that would exclude the contributions of multistakeholder organizations and instead provide for heavy-handed governmental control of the Internet.

For the ANA and CRIDO, Strickling’s remarks are a huge setback.

The ANA has previously said that it planned to use all three branches of the US political system — lobbying Congress and the NTIA, or taking ICANN to court — to achieve its ends.

The Senate clearly wasn’t interested yesterday and the NTIA has now confirmed that it’s on ICANN’s side.

That leaves only one option.

NRF director joins .shop applicant

Kevin Murphy, December 9, 2011, Domain Registries

Commercial Connect, one of the companies planning to apply to ICANN for the new top-level domain .shop, has appointed a US National Retail Federation Foundation director to its board.

Richard Last is also chairman emeritus of Shop.org and has a long history in retail, according to a Commercial Connect press release.

The NRF has been one of the more outspoken critics of the new gTLD program recently. While the organization does not oppose it outright, it does believe the program needs to be delayed.

GMO Registry also intends to apply for .shop, and has arguably been the higher-profile of the two public applicants, going so far as to sponsor ICANN events under the .shop brand.

Companies that both support and oppose new gTLDs

Kevin Murphy, December 8, 2011, Domain Policy

NetChoice, which has spent the last few years publicly expressing a skeptical view of ICANN’s new top-level domains program, has today come out explicitly in its support.

“While not perfect, ICANN’s plan to expand the domain space is a critical step forward for the Internet,” NetChoice executive director Steve DelBianco said in a press release.

“Managed properly, the new gTLD program should increase competition, expand user choice, and make the Internet far more useful to hundreds of millions of users worldwide who read and write in alphabets other than Latin,” he said.

This puts a number of companies in the interesting situation of simultaneously opposing and supporting the new gTLDs program, at least if you track which associations they belong to.

Take eBay, for example.

eBay is a member of NetChoice, but it’s also a member of the anti-expansion Association of National Advertisers, according to the organizations’ respective web sites.

It’s also a member of the Interactive Advertising Bureau, which opposes new gTLDs and is a founder member of the Coalition for Responsible Internet Domain Oversight, which was founded by the ANA and also opposes new gTLDs.

Yahoo, Expedia and Facebook are all members of the IAB, which opposes the expansion, and NetChoice, which doesn’t.

The Screen Actors Guild, which has openly opposed new gTLDs, is also inexplicably listed as a member of the Electronic Retailing Association, which in turn is a member of NetChoice.

News Corp is a member of NetChoice, which supports new gTLDs, while many of its Fox-branded subsidiaries are members of the IAB, which is a member of CRIDO, which opposes new gTLDs.

Intel is a member of the ANA, which opposes the program. It’s also a member of the Association of Competitive Technology, which is in turn a member of NetChoice, which supports it.

Very confusing, isn’t it?

Almost makes you think that, regardless of which side you’re on, hiding behind a coalition just makes your point of view seem less valid.

Notes from the Senate new gTLDs hearing

Kevin Murphy, December 8, 2011, Domain Policy

The US Senate’s Commerce Committee held a hearing into ICANN’s new generic top-level domain program today, following pressure from the Association of National Advertisers.

It must have been a busy day on Capitol Hill. Not only was the hearing delayed by 45 minutes, but when it did begin only four or five Senators showed up to speak.

Committee chair Sen. Jay Rockefeller put his head through the door just long enough to deliver a prepared statement, leaving Sen. Amy Klobuchar to lead the rest of the hearing.

It was a relatively subdued and hurried affair that heard for the most part some extremely well-worn arguments about the potential benefits and risks of new gTLDs.

Nevertheless, the hearing did generate a few headline moments. These are my first impressions.

Rockefeller in pro-gTLD shocker

Given that the hearing was called at the behest of ICANN’s critics, it was slightly surprising that the Committee’s chairman gave a generally pro-expansion statement.

Sen. Rockefeller said he was generally in favor of new gTLDs, believing them to be pro-competition and pro-innovation, but suggested that the roll-out should be slower and more cautious.

“I think we’ll have to get used to .hotel, I think we’ll have to get used to .auto,” he said.

“If ICANN is determined to move forward, it should do so slowly and cautiously,” he said. “The potential for fraud, consumer confusion, and cybersquatting is massive and argues for a phased in implementation. Scaling back the initial round of new top level domains introduced in 2013 may be a prudent approach.”

ICANN expects about 1,000 applications

Senior vice president Kurt Pritz gave the latest ICANN guesstimate about how many new gTLD applications it expects to receive in the first round.

That number is 500 to 1,000, maybe a little more but “not thousands”, he said, noting that the estimate was completely based on hearsay.

New ICANN conflict of interest rules

ICANN’s board of directors evidently voted to restrict their post-ICANN employment opportunities at the board meeting earlier today, if Pritz’s testimony is an accurate guide.

He said that directors will not be able to work for any new gTLD operator that they have voted to approve for 12 months after they leave ICANN.

Cheaper application fees for worthy applicants

Again scooping the publication of today’s ICANN board meeting resolutions, Pritz revealed that application fees are going to be reduced from $185,000 to $47,000 for needy applicants.

This suggests heavily that ICANN figured out a way to accommodate the recommendations of the Joint Applicant Support working group, which proposed a number of measures aimed at reducing the financial burden for applicants in developing nations.

There was no word from Pritz about which organizations or nations will be eligible for the reduction, however.

The ANA compares senators to Disney characters

At one point, the ANA’s Dan Jaffe wheeled out a slide bearing a picture of Donald Duck and Mickey Mouse, to illustrate the problem of inaccurate Whois information.

He was addressing Sen. Maria Cantwell and Sen. Kelly Ayotte, both of whom asked questions about fraud and both of whom use Whois privacy services on their official campaign web sites.

I found this immensely amusing.

Dyson speaks for the little guy (if he has a trademark)

Former ICANN chair Esther Dyson said in her opening testimony that she was the only person at the hearing there to represent public opinion, rather than that of big business.

She then went on to complain, with a straight face, about all the trademark enforcement headaches big business will have to deal with in a world of hundreds of new gTLDs.

She’s particularly miffed, as a director of a company called Meetup, that ICM Registry has reserved meetup.xxx as a premium domain name.

Meetup will probably sue whoever buys the name for trademark infringement, she indicated.

Way to stick it to The Man, Esther!

Wither IDNs?

Non-Latin-script gTLDs were not discussed in any depth during the hearing, meriting only one or two mentions.

That’s unusual, given that IDN gTLDs are the one benefit of the ICANN program that not even intellectual property interests have dared to argue against.

Next steps

The ANA and the YMCA want somebody to put a stop to the new gTLD program, or to at least delay it.

Dyson suggested that for the US to unilaterally intervene might be a bad idea, politically.

When asked whether the Department of Commerce would be able to stay ICANN’s hand, Commerce representative Fiona Alexander ducked the question.

With a handful of exceptions, nobody on the Senate committee seemed to care enough about the subject to show up and ask questions.

I think this probably counts as a win for the pro-expansion camp.

There is however another hearing, this time before the House Energy and Commerce Committee, next week. If recent history is any guide, we’re likely to be in for more of the same.

London issues .london RFP through Olympic bid system

Kevin Murphy, December 8, 2011, Domain Registries

London & Partners, the official promotional agency for London, has released a request for proposals for a registry to apply for and run .london as a new top-level domain.

Bidders will have to sign up for CompeteFor, an online procurement tool designed primarily for the London 2012 Olympics, in order to submit their proposals.

UK-based registries Nominet and CentralNic have already said they plan to respond to the RFP, but L&P says that it is open to companies anywhere, not only in the UK and EU.

The RFP is open until January 5 at noon GMT.

Was .xxx’s launch disappointing?

Kevin Murphy, December 8, 2011, Domain Registries

The weekend box office numbers are in, and .xxx didn’t put as many bums on seats as might have been expected.

ICM Registry sold 55,367 new .xxx domain names in its first 24 hours of general availability, giving it a total of almost 159,351 registrations, according to the company.

That’s pretty good going for a TLD which, despite the spin in ICM’s recent TV commercials, is intended for a limited customer base, and which is selling for $80 to $100 a year.

Given its $60 registry fee, ICM will have taken over $3.3 million in revenue yesterday, over $550,000 of which will be given to its sponsoring organization, IFFOR.

However, the 159,351 total includes non-resolving domains, ICM has confirmed.

Due to the unique trademark protection mechanisms put in place for non-porn companies, it’s possible to pay for a .xxx domain that will only ever resolve to a standard registry placeholder.

ICM has previously said that it took almost 80,000 sunrise applications, and that the landrush phase put its total “comfortably over 100,000”.

It did not, however, break out the mix of Sunrise A (resolving) and Sunrise B (non-resolving) domains.

That’s an important distinction, both for ICM’s ongoing revenue and for gauging demand for .xxx among registrants.

Each Sunrise B domain gave ICM a $161 windfall but, unlike every other TLD launched to date, has the sale had no recurring revenue component.

I think it’s possible that 50,000 to 60,000 sunrise domains were non-resolvers, which would give .xxx a total of roughly 100,000 active domains under management after one day of GA.

(My assumptions are that all 80,000 sunrise applications were unique and approved, and that roughly two thirds were for Sunrise B non-resolving domains).

Assuming all the active domains are renewed, it’s a $6 million a year business (or $5 million, if you exclude the mandatory IFFOR donation) for ICM already.

The .xxx zone is already bigger than .travel, .pro, .jobs, .aero, .coop, .museum and .cat. It will likely be bigger than .name, .tel and .asia by the end of the month.

So why suggest that it’s a disappointing result?

Pre-reservations

First, for a few years ICM was accepting no-cost .xxx “pre-reservations” through its web site, while its gTLD application was in ICANN limbo.

It racked up over 900,000 such reservations for roughly 650,000 unique .xxx domain names before shutting the offer down in July this year.

One might expect that most people interested enough in .xxx to pre-register a domain months or years in advance might also be interested in grabbing that domain during landrush, sunrise or at the moment of GA. That apparently didn’t happen.

.CO

Let’s also compare .xxx to the launch of .co by .CO Internet last year.

While .CO did not have anything like the long-term media exposure as .xxx, it did of course have the advantage of offering a completely generic string priced at a third of .xxx.

Within its first 24 hours of general availability, .CO said that it had 233,000 domains under management, about 39,000 of which were landrush or sunrise registrations.

Even at the cheaper registry fee (about $20 a year) .CO still made more money in day one than ICM (although ICM wins hands-down in terms of premium domain sales).

.CO, incidentally, also only had 10 accredited registrars at launch (not counting resellers) compared to ICM’s over 70.

Go Daddy

Go Daddy is responsible for roughly half of all new .com registrations, with similar numbers in other TLDs including .co, but it does not appear to be promoting .xxx very heavily.

For the last few days, its homepage has contained only one small below-the-fold reference to .xxx domains. Its TLD drop-down menu has .xxx in tenth place, between .biz and .ca.

Conversely, ICM has been promoting Go Daddy (and DomainMonster) more heavily in its own marketing – notably on gavin.xxx, the site “owned” by its TV commercial character.

Expectations

So is .xxx on track to meet expectations at this early stage?

ICM CEO Stuart Lawley has previously predicted 300,000 to 500,000 registrations in the first few months, and that’s still an achievable goal given its day-one performance.

.CO Internet, for example, more than doubled its 233,000 first-day take within two months of going into general availability.

The new Russian ccTLD .рф registered 200,000 domains in its first six hours when it launched in November 2010, and hit 800,000 by April this year.

While .xxx clearly hasn’t yet smashed estimates in the same way as its sunrise did, I think early indications are that it’s looking pretty healthy.

Dyson confirmed for new gTLDs Senate hearing

Kevin Murphy, December 6, 2011, Domain Policy

The US Senate Committee on Commerce, Science and Transportation has published the witness list for this Thursday’s hearing into ICANN’s new gTLD program.

Esther Dyson, the founding chair of ICANN’s board of directors and now a fierce critic of the organization, may turn out to cause the most fireworks.

While Dyson was pro-expansion a decade ago, voting in favor of .info, .biz and others, she recently came out against the program in a widely syndicated op-ed and at a CADNA conference.

Kurt Pritz, ICANN’s senior vice president of stakeholder relations and regular new gTLDs go-to guy, will return to Capitol Hill to defend the program.

(We’re likely to see some criticism of CEO Rod Beckstrom as a result of his absence, as we did following the House of Representatives hearing earlier this year, I imagine.)

Fiona Alexander of the National Telecommunications and Information Administration, ICANN’s governmental overseer, has also been named as a witness.

Predictably, the Association of National Advertisers has a seat on the panel in the form of Dan Jaffe, its vice president of government relations.

The ANA and its newly formed Coalition for Responsible Internet Domain Oversight is believed to have brought about the hearing due to its anti-ICANN lobbying activities.

The witness with the wildcard credentials is Angela Williams, general counsel of the Young Men’s Christian Association of the United States of America.

The YMCA does not appear to have spent a great deal of time contributing to ICANN or the new gTLDs program.

It is however a member of ICANN’s new Not-for-Profit Organizations Constituency (NPOC), which is viewed by some (largely other non-commercial stakeholders) as a shill for intellectual property interests.