Fifth ad group opposes new gTLDs

The World Federation of Advertisers has become the fifth major coalition of advertising big-spenders to ask ICANN to rethink its new gTLD program.
Stephan Loerke, managing director of the Brussels-based organization, wrote to Rod Beckstrom, to “strongly urge ICANN to abandon the program in its current form”.
The letter (pdf) explicitly echoes statements first made by Bob Liodice of the US Association of National Advertisers, which is a WFA member.
To recap, these organizations are worried about consumer confusion, leading to phishing and cybersquatting and an increase in the cost of defending trademarks online.
Loerke said in a press release:

ICANN’s decision flies in the face of their own impact assessments, which highlight the potential dangers and massive costs that unlimited domain names could incur. Worse, it could lead to significant confusion among consumers and expose them to abuse by fraudulent operators.

The WFA is an umbrella trade group that comprises the national advertising trade groups of 50-odd countries. It also has 50-odd brand names as members.
Its members collectively spend $700 billion a year on advertising.
As well as the ANA, the Interactive Advertising Bureau, the Association of American Advertising Agencies and the UK Direct Marketing Association have recently opposed the new gTLD program.

Should new gTLDs be delayed?

Is the world ready for the new generic top-level domains program? Is ICANN ready?
It’s been well over two months since ICANN approved its new gTLD program, and the initial sense of excitement and purpose in the industry seems to have given way to virtual silence from ICANN and a profound lack of audible enthusiasm from the internet at large.
What’s going on with the program? Where’s the final Applicant Guidebook? Who are the experts ICANN is going to hire to actually decide which applications succeed or fail?
Is four months really sufficient time to put the world on notice that new gTLDs are coming and to give everybody enough opportunity to prepare?
Is anybody outside the industry even paying attention?
Read this quote (with my emphasis) from Friday’s wrap-up session at the .nxt conference in San Francisco and see if you can guess whose mouth it came out of.

My takeaways, if I can run through them quickly…
…a sense of relief that this program is finally underway as of June 20 has suddenly now turned into a worry. There’s a whole lot of people who can’t believe it’s happening, and there’s a sense of worry that it’s all going to happen too fast. So that’s quite interesting. There’s a hell of a lot that has to be done between now and launch.
Some things are not yet done… We haven’t got the information about the [Trademark] Clearinghouse yet, we don’t know what the [Governmental Advisory Committee] processes are going to be, and we actually have to design registry systems and explain those two to customers and show how they are going to fit together and we can’t. So there’s a problem there about the rush.

You may be thinking that those are the words of some naysayer in a stuffed shirt – a hater from the trademark lobby or the advertising industry who wants to put the stoppers on new gTLDs.
Actually, that’s the opinion of Peter Dengate Thrush, who was chairman of the ICANN board of directors when it voted to approve the program, despite concerns that it wasn’t ready yet, in June.
Dengate Thrush is now of course executive chairman of Minds + Machines, which is in the position of actually having to deal with the program in its incomplete state.
His words were, I believe, offered up as an analysis of the mood of the conference, rather than some kind of mea culpa, if you were wondering about the context or tone.
Nevertheless, he had a point.
Here are some of things that don’t seem to have been finalized yet:
The Applicant Guidebook
Incredibly, the most recent version of the application rulebook posted on the ICANN web site dates from May. It’s still essentially still an almost-done draft document.
ICANN’s board voted in June to amend the Applicant Guidebook before the first round of applications opens.
So, where is it? Where’s the final Guidebook?
Who’s going to sign a check investing in new gTLDs when the rules are still open to change?
Still minding the GAC
How, precisely, will the Governmental Advisory Committee decide whether to intervene to thwart a gTLD application on public policy grounds?
ICANN has agreed to let the GAC make up its own rules governing how it reaches consensus before it objects to applications, but so far it has not said what those rules are going to be.
If you think you might apply for a potentially controversial gTLD string – or even if you don’t – you still don’t have enough information today to make a fully informed risk analysis.
Your best strategy right now might be to ensure that your string complies with Sharia, or to pay off a bunch of government officials to ensure they fight your corner.
Where are the experts?
ICANN has not yet named the company or individuals who have been or will be hired to process the hundreds of gTLD applications that are likely to be received next year.
As Dengate Thrush noted, it also hasn’t appointed a Trademark Clearinghouse, which is a critical component of two mandatory new gTLD rights protection mechanisms.
Currently, it’s hard to say for certain what integration between registries and the Clearinghouse will entail financially or technologically.
That may not be an enormous problem, but it could make writing an application slightly trickier.
Watching the watchmen
ICANN is in receipt of letters from competition authorities in the US and European Union, telling it in fairly blunt terms that its decision to allow registries and registrars to integrate is Bad Policy.
The rules that separate registrars like Go Daddy from registries such as VeriSign have been good for consumers, they say, and should be kept in place under the new gTLD regime.
ICANN, also in its June 20 vote, has already agreed to talk to these authorities about possibly scaling back the proposed liberalization of the vertical integration rules.
But if this is already happening, it’s happening behind closed doors, because we’ve not heard a peep about it from ICANN or the two governments since June.
If this situation escalates when everybody gets back from vacation, I will not be surprised.
Where’s the outreach?
ICANN has promised a four-month communications campaign before the start of the first round of applications. That means it has to kick off by September 12, just two weeks from now.
This campaign actually began at the press conference about half an hour after the June 20 board vote, ICANN president Rod Beckstrom said at the time, but apart from a couple of plaintive cries for help there’s been precious little visible outreach since then.
Director Bertrand de La Chapelle evidently gave Beckstrom a hard time about this during a board meeting a month ago, according to the minutes.
A new ICANN web site devoted to new gTLDs is expected to launch next month, and I understand that staff including Beckstrom will hit the road for a world tour around the same time.
But given the recent mock outrage from ad industry shills such as the Association of National Advertisers, it’s arguably a little late for ICANN to start to worry about framing the issue.
Most people reading about new gTLDs in the press the last few weeks probably came away thinking new gTLDs are nothing but a money grab by registries and cybersquatters/domainers.
(It is that, of course, but it’s lots of other nicer things too.)
From a public relations perspective, ICANN will be starting on the back foot. Its outreach efforts may turn out to be not be so much about educating the world about its program but re-educating it.
Oh, and it only has $750,000 to pull off this feat.
As a very wise man said at .nxt on Friday: “The size and scale of that [budget] doesn’t really match up to the problem it’s trying to address.”
(Yeah, that was Dengate Thrush again)
Welcome to the cheap seats
ICANN has committed $2 million from reserves to a mechanism whereby needy applicants from developing nations will be able to get a discount (TBC) on their application fees.
That mechanism does not yet exist. Such applicants are today at a disadvantage compared to their wealthier competitors when it comes to planning applications and raising funds.
A volunteer working group known as JAS has been working out the details, meeting by phone two or three times a week, but reaching consensus seems to have been a very tough slog.
Policies developed from the bottom up have a convoluted chain of custody before they get approved. A deadline missed by a day or two can delay the ICANN rubber stamp by weeks.
The way things look today, the JAS applicant support policy is going to be cutting it extremely fine if it wants to make it before the ICANN board’s October meeting in Dakar.
Wither round two?
Perhaps the most intractable problem underlying the whole program is the absence of a launch date for the second-round application window.
Speakers at the .nxt conference last week reckoned lawsuits over individual contested gTLDs are inevitable, and that they could delay the second round until as late as 2017, if it happens at all.
It’s in that context that large companies, already nervous about entering into a new, unmeasurable, unproven marketing paradigm, are being asked to commit potentially millions to new gTLDs today.
It’s arguably like being asked, in 1991, to pay $500,000 for sex.com, with no idea whether this newfangled “hypertext” thing is going to take off.
Sounds like a great deal today, but back then it would have sounded like a 419 scam.
As Yahoo lawyer J Scott Evans said at .nxt, many companies feel they have “a gun to their heads”.
It’s hardly surprising some of them have persuaded their trade groups to lobby against the program, threatening to bring their pocket Congressmen down on ICANN’s head and/or file a lawsuit or two.
Which brings me to my headline
Which brings me to my headline. Would another delay be good for the new gTLD program?
If the ANA were to sic its lawyers on ICANN tomorrow, would a temporary restraining order that delayed the program by a few month actually be healthy for it in the longer term?
A great many people and organizations that could make valuable contributions to the domain name industry will not have heard about new gTLDs before June 20.
A delay before January could give ICANN and its community a bit more time to smooth away the rough edges of the program and to address the issues that have not yet been resolved.
It could give potential applicants from outside the established community more time to decide whether to engage with the program, more time to raise funds or secure budgets, and more time to develop their new gTLD application strategies.
I’m referring here not only to large corporations with lengthy budgeting cycles, but also to entrepreneurs with cool ideas and meager resources that perhaps need more time to be able to get on board.
Could a delay also increase the proportion of applicants from outside Europe and North America, and the proportion of IDN gTLD applicants who truly understand their markets?
Bluntly, would a short delay in the launch, whether it came about as a result of legal action or not, make round one of the ICANN new gTLD program less of a clusterfuck?
Yeah, I’m playing Devil’s Advocate here
The best quote I heard during my remote participation in the .nxt conference last week was offered up by Brian Larson from DotMLS as “Larson’s Corollary to Newton’s Third Law”:

Any discussion about what the post-new-gTLD world is going to look like is inherently speculative… For any argument about the post-new-gTLD world there is an equally plausible but opposite argument.

For the avoidance of doubt, if there was any doubt in your mind, that maxim certainly applies to the opinions expressed in this article. I could just as easily write 2,000 words arguing for the opposing view.

ICANN vice president quits before he starts

ICANN’s recently announced vice president of Europe, Thomas Spiller, will not be joining the organization after all.
His appointment to the new position was announced June 23. He was due to start work heading ICANN’s Brussels office on Monday.
I understand Spiller has chosen a position at another company instead, and that his decision may have predated the announcement of CEO Rod Beckstrom’s July 2012 departure earlier this month.
A policy expert, he previously worked for the French Prime Minister’s Office and the software company SAS, according to an ICANN press release (pdf).
The European VP job is now being advertised once more on ICANN’s hiring page.
The news of Spiller’s non-showing at ICANN was first revealed this morning by GNSO chair Stephane Van Gelder.

Direct marketers join anti-gTLD bandwagon

The UK Direct Marketing Association has added its voice to the collection of advertising trade groups that oppose ICANN’s new generic top-level domains program.
DMA executive director Chris Combemale said in a statement:

Creating a tranche of new internet domain names will be extremely costly to businesses. As well as the associated costs of registering new domain names and spending money to attract customers to multiple domains, businesses face the legal and financial headache of having to contend with cybersquatters grabbing specific domains.
Customised domain names won’t offer brands any enhanced marketing possibilities because consumers can easily search for specific information with the current domain name system.
Companies are already hard pressed to find cost savings in these tough trading times; adding a further financial burden that won’t reap any commercial benefits cannot be justified.

The organization said it plans to formally ask ICANN to withdraw or revise the program.
The Association of National Advertisers, the Interactive Advertising Bureau and the American Association of Advertising Agencies have already made similar calls.
The DMA UK has over 800 members, according to its web site.

Watch the .nxt conference live online

The .nxt conference on new top-level domains kicks off in San Francisco later today, but fear not if you were unable to make it in person – much of the content will be streamed live online.
Roughly half of the three-day meeting’s sessions will be made available live, and it appears that the whole lot will be available on demand for the next three months.
If the conference is as informative as the first one, which took place in February, the $95 fee .nxt is charging to access the streams seems like a pretty good deal.
It’s no substitute for being there in person – much of the value in these things lies in the networking opportunities – but if new gTLDs are likely to effect your business you’d be crazy not to check it out.
More details here.

ICM reveals tough .xxx cybersquatting rules

ICM Registry has finally taken the wraps off its rapid domain name takedown service, which promises to make life difficult for cybersquatters in the .xxx top-level domain.
The Rapid Evaluation Service, as it is known, is basically a souped-up version of the familiar UDRP that tilts the overall balance in favor of legit trademark holders.
It’s designed for companies or individuals who don’t want to be associated with .xxx domain names, and has the remedies to match.
Using RES, brand owners will be able to get a domain temporarily suspended in less than a week, and later have it switched off for good.
That’s right, if a name is lost under RES it goes into registry-reserved status. The complainant does not get control of the domain, and they don’t have to pay recurring renewal fees.
But it will not be cheap. The National Arbitration Forum is the only organization authorized to handle RES work, and it’s charging $1,300 per domain, with no discounts for multiple-domain cases.
RES does not replace UDRP, but it is based on it.
Like UDRP, its three pillars are the domain’s confusing similarity with the complainant’s trademark, the rights and legitimate interests of the registrant, and the question of bad faith registration.
While much of the RES has been copied straight from the UDRP, there are key differences.
ICM has codified some of the good case law that has emerged from the last decade of UDRP and eschewed some of the bad, arguably making RES less open to interpretation.
Notably, unless you’re filing to protect a personal name — celebrities, porn stars or just the average Jo(e) — RES is for nationally registered, in-use trademarks only. Other marks don’t seem to count.
Typos are explicitly included in the definition of confusing similarity (no microsfot.xxx), as are brand+keyword domains (microsoftporn.xxx).
Phonetic similarity also makes an appearance, which seems like it could open a great big can of worms.
The bad faith component of RES is very similar to UDRP, but with the addition of a typosquatting ban and the removal of the requirement to show the registration was made for “commercial gain”.
As far as registrants are concerned, there are some additional protections you won’t find in UDRP, notably this text, which seems to specifically make many generic terms immune:

(iii) the domain name in the .XXX TLD has a primary meaning apart from its secondary meaning as a trademark or service mark associated with the complainant, and is being used in connection with its primary meaning in association with which the complainant has not acquired distinctiveness in the adult-entertainment industry.

Technically, and very hypothetically, I interpret this to mean that if you registered apple.xxx (which you won’t) and used it to publish videos of men recreating that scene from American Pie, you probably couldn’t lose the domain to an RES complaint.
I expect this is largely of concern to companies that have registered trademarks that correspond to dictionary words. They may have to use UDRP as usual.
RES has previously been billed as a 48-hour solution, but in reality cases could take anywhere between three and five days before a Preliminary Decision is handed down.
After a complaint is filed, there’s a one-business-day turnaround for an administrative check, then another two business days for the panelist to decide what to do.
If a respondent has lost three or more RES cases in a year, the panelist will be entitled to presumptively consider them an “abusive registrant” for a preliminary decision.
Preliminary decisions can stop a domain resolving immediately, if the panelist thinks the complainant is likely to win and that there’s no “substantial likelihood of harm” to the registrant.
Registrants then have 10 days to respond before a final decision is made. If they default, maybe because they’re on vacation, they have up to three months to appeal.
In short, we’re looking at the bastard son of UDRP here.
I suspect the trademark lobby is going to quietly love it. If that’s the case, it might help the domain industry look a bit more respectable.
If you’re more likely to be a respondent than a complainant, you’d be well-advised to familiarize yourself with RES (and ICM’s other policies) before investing in gray-area .xxx domains.
The huge glaring problem with the policy as far as I’m concerned is that neither ICM or NAF is going to publish any of its decisions in full, only aggregated statistics.
This is ostensibly to protect the identities of the complainants, but it’s also going to cover up (probably inevitable) sloppy decision-making, which won’t be good for confidence in the .xxx TLD.
But if somebody cybersquats your mom, you’ll probably be glad of it.

How not to upgrade to a .com – ask ICANN

The domain name world can be confusing, and there’s no shortage of timewasters ready to bother ICANN with their relatively minor problems and disputes.
The latest is violin maker Zeta Music Systems, which went to the extraordinary lengths of initiating an ICANN Reconsideration Request to get its hands on a domain name it does not own.
Zeta currently hosts its web site at zetamusic.net. The equivalent .com – which Zeta wants – is owned by a now-defunct company that went by the same name.
Even though the company is apparently bust and the Whois is no longer accurate, it had a long-term registration that is not due to expire until November 2012.
In his Reconsideration Request (pdf), filed in June, Zeta president Michael Gende wrote:

ICANN would be doing no harm to the former Zeta by reassigning the domain to us now. However, ICANN’s inaction with regard to this issue is doing harm to our company as potential customers naturally go to the zetamusic.com domain, and find nothing.

Individually handling second-level domain disputes is obviously none of ICANN’s business, and that’s exactly what Gende has been told (pdf) by its Board Governance Committee.
Reconsideration Requests are a rarely used, rarely successful review mechanism whereby ICANN’s decisions can be challenged if new information comes to light.
Gende’s is the first of 2011 and one of only four filed in the last five years.

Who should be ICANN’s next CEO?

With Rod Beckstrom now less than a year away from leaving the CEO job at ICANN, following his resignation this week, the rumor mill is already spitting out ideas about who should replace him.
While his contract is not set to expire until July 1, 2012, that does not necessarily mean Beckstrom’s replacement will not be named and in situ before then.
His predecessor, Paul Twomey, also gave about 10 months notice when he resigned in March 2009, and Beckstrom had taken over by July.
Twomey played out the remainder of his contract in an advisory capacity, to smooth the transition. He eventually left in January 2010.
So it’s quite possible ICANN’s executive search team will start its hunt sooner rather than later. But where should they look and what type of candidate should they choose?
It’s proved to be a well-compensated but often thankless job.
Candidates must be equally capable of sharing applause with world leaders one day and then sitting in a stuffy meeting room patiently taking shit from community members the next.
They need to be able to act not just as a figurehead but as a diplomat, negotiator and man manager, somebody confident handling large budgets and larger egos.
Candidates with cat-herding experience and a target tattooed on their foreheads will be a shoo-in.
It’s been pointed out ICANN’s four CEO appointees to date have alternated between, for want of better words, “insider” and “outsider” candidates. (The chair has a similar rule.)
Beckstrom came directly from the US government, whereas Twomey had been steeped in ICANN culture for four years as head of the Governmental Advisory Committee when he took over in 2003.
There’s no point speculating about “outsiders” at this point – ICANN could hire basically anyone – but people are already talking about known faces that might put themselves forward.
An insider may be a good call this time around, given the major challenges – new gTLDs and the renewal of the IANA contract, to name two – ICANN faces over the coming year.
As ICANN alum Maria Farrell, one of the people responsible for publicizing criticism of Beckstrom’s management style, noted yesterday, “we need someone who can hit the ground running.”

Put it another way, globally, there are probably about 500 key people involved in running the DNS and numbering systems. If the CEO doesn’t know these people already, and know where the bodies are buried – i.e. is not already one of the 500 – then she or he will be a liability for at least the first year.

That’s a pretty strong endorsement of an “insider” candidate – somebody who already knows their way around ICANN’s complex personality-driven machinery.
While there’s nothing stopping ICANN promoting somebody from within its own ranks, no names jump out as obvious candidates.
Most senior staffers are either Beckstrom-era appointees with less than two years under their belt, or hold specialist roles that would not necessarily make them CEO fodder.
An “insider”, in this case, is more likely to mean somebody from the broader ICANN community.
Two names that have popped up more than once during conversations since Beckstrom’s announcement are Chris Disspain (head of auDA in Australia) and Lesley Cowley (head of Nominet in the UK).
Both, it is whispered, were on the shortlist in 2009. Disspain now sits on the ICANN board of directors and Cowley is the newly installed chair of the ccNSO (replacing Disspain).
Both know ICANN pretty much inside-out and have many years experience managing the policy bodies for their own respective country-code top-level domains.
They are also native English speakers. That’s obviously a slight advantage – English is ICANN’s lingua franca – but not necessarily a deal-breaker.
Some say ICANN could look elsewhere in the world for its new leader. Nigel Roberts, CEO of ccTLD manager Island Networks, wrote yesterday:

ICANN should at least seriously consider this time to appoint a CEO from a non-Anglo-Saxon background to show the rest of the world it really is serious about its purported commitment to diversity.

While blind affirmative action would obviously be a terrible idea, I would have little difficulty imagining the likes of Accenture veteran Cherine Chalaby or career diplomat Bertrand De La Chapelle – ICANN directors native to non-Anglo nations – being put forward as candidates.
Both men have shown a dedication (ambition?) within ICANN, with British-Egyptian Chalaby unsuccessfully standing for chairman this year and BDLC quitting his job in the French government in order to take on his uncompensated role on ICANN’s board.
I hear good things about Chalaby, and his experience in the business world is extensive, though with just a year’s ICANN time served some may say he’s a little green. And if BDLC gets the job, we may have to extend ICANN meetings by a few days to cope with his verbosity.
While a CEO could be hired from essentially anywhere in the world, a willingness to live and work in Marina Del Rey, California may also prove an advantage.
Even though Beckstrom is based just a few hundred miles away in Silicon Valley, I don’t doubt that his distance from ICANN headquarters has contributed to the perception that he’s out of touch with his troops, surrounded by an inner circle of trusted advisers.
That said, I believe that Twomey managed to get away with spending a lot of his time in his native Australia while he was CEO, to little complaint.
Experience in the business world will also be an advantage.
ICANN has a $70 million budget for this fiscal year, and it could well find itself handling double or triple that amount when the new gTLD program kicks off next year.
Would a candidate with experience with similar budgets make a better choice? If so, how many likely applicants would actually would fit that criterion?
There are not a great many “insiders” with CEO experience at organizations of a comparable size, and companies that large do not usually send their CEOs to ICANN meetings anyway.
A senior executive from a domain name company, perhaps a VP looking to get their teeth into their first C-level position, may be a more likely applicant.
But a hire from industry could also present a perception of conflict of interest problem, coming at a time when ICANN is coming under pressure to review its ethics policies.
If Peter Dengate Thrush’s move to Minds + Machines from ICANN’s chair raised eyebrows, imagine how it could appear if ICANN’s CEO was hired directly from a registry or registrar.
As fun as it would be, I think we can probably rule out Bob Parsons for the time being.

Beckstrom quits ICANN

The CEO and president of ICANN has quit.
Rod Beckstrom tweeted within the last hour:

I have decided to wrap up my service at ICANN July 2012. Press release soon.

Many in the ICANN community kinda knew this was coming.
Over the coming hours, expect to read a lot of people question whether the words “I have decided” are strictly accurate.
UPDATE: I’ve covered the story in more depth for The Register.

Breaking: Ad industry piles on ICANN

The Interactive Advertising Bureau, which represents over 500 companies including Facebook, Google, eBay and Microsoft, has told ICANN to put a stop to its new top-level domains program.
The cry calls just a couple of weeks after the Association of National Advertisers said it would lobby Congress and may take ICANN to court over the controversial program.
Randall Rothenberg, CEO of the IAB, said in a press release:

ICANN’s potentially momentous change seems to have been made in a top-down star chamber. There appears to have been no economic impact research, no full and open stakeholder discussions, and little concern for the delicate balance of the Internet ecosystem.
This could be disastrous for the media brand owners we represent and the brand owners with which they work. We hope that ICANN will reconsider both this ill-considered decision and the process by which it was reached.

The IAB’s membership is a Who’s Who of leading online media companies, purportedly responsible for selling 86% of online advertising in the US.
It counts AOL, Digg, Amazon, the BBC, Bebo, CNN, Ziff Davis, LinkedIn, Time Warner, Slate, Thomson-Reuters, IDG, the Huffington Post and many other well-known names as members.
Demand Media, too.
If the ANA represents advertisers themselves, the IAB represents the places they spend their advertising money.
It looks like a large portion of corporate America is not happy about new gTLDs. ICANN may have found itself a new, extremely well-funded enemy.