Why ICANN dropped registrar ownership rules

ICANN has quietly published a list of 10 reasons explaining why it decided to start allowing domain name registrars and registries to buy each other.
Last November, ICANN’s board of directors voted to drop so-called “vertical integration” rules that previously prevented registries owning more than a small percentage of registrars.
Now, under the forthcoming new top-level domains program, the likes of eNom and Go Daddy will be able to apply to become gTLD registries, and registries like VeriSign and Neustar will be able to apply to run their own registrar businesses.
The decision was unexpected, appeared to be a U-turn, and ICANN’s explanation was not articulated sufficiently to sate critics such as the US Department of Commerce.
So now ICANN has published a “Draft Rationale” (pdf), a 17-page document that outlines some of the thinking that went into the decision.
In a nutshell, ICANN dropped the VI rules to increase competition, to avoid antitrust lawsuits, and because the harms that could arise due to cross-ownership are best addressed by other means.
Here are the rationale’s 10 major bullet points in full:

• None of the proposals submitted by the GNSO reflect a consensus opinion; as a result, the Board supported a model based on its own factual investigation, expert analysis, and concerns expressed by stakeholders and the community.
• ICANN’s position and mission must be focused on creating more competition as opposed to having rules that restrict competition and innovation.
• Rules permitting cross-ownership foster greater diversity in business models and enhance opportunities offered by new TLDs.
• Rules prohibiting cross-ownership require more enforcement and can easily be circumvented.
• Rules permitting cross-ownership enhance efficiencies and almost certainly will result in benefits to consumers in the form of lower prices and enhanced services.
• Preventing cross-ownership would create more exposure to ICANN of lawsuits, including antitrust lawsuits, which are costly to defend even if ICANN believes (as it does) that it has no proper exposure in such litigation.
• The new Code of Conduct, which is to be part of the base agreement for all new gTLDs, includes adequate protections designed to address behavior the Board wants to discourage, including abuses of data and market power. Data protection is best accomplished by data protection tools, including audits, contractual penalties such as contract termination, punitive damages, and costs of enforcement, as well as strong enforcement of rules. By contrast, market construction rules can be circumvented and cause other harms.
• Case-by-case re-negotiation of existing contracts to reflect the new crossownership rules will permit ICANN to address the risk of abuse of market power contractually.
• In the event ICANN has competition concerns, ICANN will have the ability to refer those concerns to relevant antitrust authorities.
• ICANN can amend contracts to address harms that may arise as a direct or indirect result of the new cross-ownership rules.

The document still needs to be approved by the ICANN board of directors before it can be considered official.
It appeared without fanfare on the ICANN web site a little over a week ago.

Comment Tagged: department of commerce, ICANN, new TLDs, ntia, vertical integration

Afilias lawyers up for TLD applicants

Registry services provider Afilias has expanded its relationship with the law firm Crowell & Moring to support prospective new top-level domain applicants.
The two companies said this morning that they have entered into a memorandum of understanding under which Crowell will provide legal and business consultation to Afilias’s new TLD clients.
Afilias, along with VeriSign and Neustar, is expected to one of the major beneficiaries of the introduction of new TLDs, due to its experience managing the technical back-end for several existing TLDs.
Here at the .nxt conference in San Francisco this week, one oft-repeated message is that applicants can smooth their TLD application with ICANN by signing up an incumbent to provide the back-end.
Crowell is one of a small number of law firms with a specialist domain name consulting arm. It is affiliated with the IP Clearinghouse, which wants to play a key role in new TLD launches.

1 Comment Tagged: .nxt, afilias, crowell & moring, ICANN, new TLDs

Neustar wins .gay contract

Neustrar has signed a deal to provide back-end registry services to DotGay LLC, one of the companies hoping to apply for .gay as a new top-level domain.
There are currently two companies planning to apply for .gay that I’m aware of. The other, the Dot Gay Alliance, has chosen Minds + Machines as its back-end partner.
The positioning is quite interesting. Scott Seitz, CEO of DotGay, played up the need for more security and stability in a TLD that may find itself the target of homophobic cyber-attacks.
In a press release due out tomorrow, Seitz says:

While security is always a concern for any gTLD, the GLBT community is at a higher risk of discrimination, making system integrity a critical component in the selection of a registry partner.

Neustar, which runs .biz and several other TLDs, has more experience running high-traffic registries than M+M. However, this fact will likely not be relevant to which company wins .gay.
Under the ICANN new TLDs program, applicants have to prove themselves capable of running a registry, but contested TLD applicants are not compared against each other based on technical prowess.
It’s much more likely that the two (or more) .gay applications will live or die based on community support or, failing that, how much money they are prepared to pay at auction.
The .gay TLD is likely to also be a flashpoint for controversy due to ongoing debates about governments’ ability to block TLDs based on “morality and public order” objections.
Recent mainstream media coverage has focused on .gay as a likely test case for governmental veto powers.

6 Comments Tagged: dotgay, dotgay alliance, ICANN, Minds + Machines, neustar, new TLDs

New TLD rulebook unlikely to get March nod

ICANN’s new top-level domains Applicant Guidebook is unlikely to get its final approval at ICANN’s March meeting, according to the senior staffer responsible for the program.
Senior vice president of stakeholder relations Kurt Pritz, who gave the keynote at today’s .nxt conference, later told me the Guidebook “probably won’t be approved in San Francisco”.
But impatient new TLD applicants may not have to wait too long afterward for the Guidebook to get the nod and the program to launch.
Pritz said that the Guidebook, currently in a “Proposed Final” version, will likely be revised following ICANN’s upcoming talks with its Governmental Advisory Committee.
But whatever emerges from the GAC consultation will not necessarily be opened for public comment, which would add a month or two of delay to the process. That will be for the board to decide.
Pritz indicated that the community needs to understand that one day ICANN will produce a version of the Guidebook that will be for voting, not commenting.
That’s likely to come sooner rather than later.
It seems to me to be quite likely that a version of the Guidebook emerging in the weeks following San Francisco will be submitted straight to the ICANN board of directors for approval.
During his keynote, which he gave following ICANN CEO Rod Beckstrom’s unexpected eleventh-hour cancellation, Pritz said he wanted “to reset expectations and what I think our job is going forward”.
“Public discussion needs to turn to: should we launch the new gTLD process or should we not?” he said during his remarks.
The keynote was upbeat, talking about the Guidebook being a “road map”, not a series of “road blocks”.
Referring to the recently relaunched .me and .co country-code TLDs, which have been successfully marketed as generic TLDs, Pritz said:

To a certain extent new TLDs are already off and running. There’s a first mover advantage there, so the rest of us need to catch up.

2 Comments Tagged: .nxt, applicant guidebook, gac, governmental advisory committee, ICANN, new TLDs, san francisco

ICANN chief cancels .nxt keynote

With the first-ever .nxt conference on new top-level domains just hours away from opening its doors, it looks like star speaker Rod Beckstrom has canceled his appearance.
ICANN’s president and CEO, who was featured prominently on the web site of the San Francisco conference as recently as Sunday, no longer appears on the agenda.
His keynote slot, scheduled for 10am local tomorrow, has been filled by Kurt Pritz, ICANN’s senior vice president of stakeholder relations and point man for the new TLD program.
While Pritz perhaps lacks the name recognition and stage presence of Beckstrom, it could be argued that his more granular insight into the program may actually make him a better-value speaker.
Juan Diego Calle, CEO of .CO Internet, is still scheduled for the second keynote, on Wednesday. Here’s hoping he can provide an update on .co’s post-Super Bowl performance.
UPDATE: Conference organizer Kieren McCarthy has confirmed that Beckstrom was unable to make it to San Francisco in time for the keynote, but said he may still attend later.

7 Comments Tagged: .nxt, ICANN, kurt pritz, new TLDs, rod beckstrom

99 super-short .uk domains registered

Nominet, the .uk registry, has allocated 99 one and two-letter .uk domain names to trademark holders including the Financial Times and Manchester United.
Most of the companies successfully applying for short .co.uk, .org.uk and .net.uk domains under Nominet’s recently closed sunrise period are household names.
Most also chose to acquire both .org.uk and .co.uk variants of their trademark. Only ten of the single-letter and two of the single-number options were claimed. Yahoo managed to get y.co.uk.
Overstock.com, which is currently branding itself as o.co, did not receive o.co.uk, despite having a trademark on the term, possibly for the reasons I outlined here.
One of the big winners appears to be a domainer. Scott Jones acquired 3.org.uk, s.co.uk, s.org.uk, pc.co.uk and pc.org.uk.
Nominet said: “A small number of contested domains will be involved in an auction phase to determine the successful registrant.”
The first sunrise was for owners of UK registered trademarks. The next round, set to kick off February 14, is for owners of “unregistered” rights.
The full list of domains registered can be downloaded here.

5 Comments Tagged: .uk, nominet, sunrise

UDRP reform effort begins

ICANN has kicked off a review of its Uniform Dispute Resolution Policy, the occasionally controversial process used to adjudicate cybersquatting complaints.
The GNSO Council on Thursday voted to ask ICANN staff for a so-called “Issues Report” on UDRP, indicating that reform of the process is likely.
This is the relevant portion of the resolution, passed unanimously:

RESOLVED #2, the GNSO Council requests an Issues Report on the current state of the UDRP. This effort should consider:
* How the UDRP has addressed the problem of cybersquatting to date, and any insufficiencies/inequalities associated with the process.
* Whether the definition of cybersquatting inherent within the existing UDRP language needs to be reviewed or updated. The Issue Report should include suggestions for how a possible PDP on this issue might be managed.

Issues Reports commissioned by the Council are expected within 15 days, and 15 days after that the Council is expected to vote on whether to kick off a Policy Development Process.
A PDP could lead to changes to the UDRP that would be binding on all ICANN-accredited registrars and their customers.
While the UDRP has proven very effective at dealing with clear-cut cases of cybersquatting over the last 12 years, critics claim that it is often interpreted too broadly in favor of trademark interests.
If you read this blog regularly, you’ll know I frequently report on unfathomable UDRP decisions, but these are generally the exception rather than the rule.
Unrelated to UDRP, the GNSO Council has also voted against asking ICANN for an Issues Report on registry/registrar best practices for mitigating domain abuse.
Business interests wanted registrars to take more measures (voluntarily) to curb activities such as phishing, but registrars think this kind of rule-making is beyond the scope of the GNSO.
After a lot of heated debate and arcane procedural wrangling, the Council decided instead to ask for a “discussion paper”, a term that has no meaning under ICANN’s rules, meaning a PDP is less likely.

3 Comments Tagged: cybersquatting, gnso council, ICANN, phishing, udrp

Four more ICANN 40 sponsors revealed

Iron Mountain, IronDNS, RegistryPro and the Public Interest Registry have added their names to the list of companies prepared to fork out big bucks to sponsor ICANN’s San Francisco meeting.
That brings the total number of ICANN 40 sponsors revealed so far to five, after VeriSign’s unprecedented $500,000 “Diamond” deal.
The new sponsors have splashed out more modest fees. Of the six tiers of sponsorship available, all four have opted for least expensive two.
Iron Mountain, IronDNS and RegistryPro have all chosen the same tiers as they have before, but they are likely paying more since ICANN has doubled its list prices since last year.
Meanwhile, .org manager PIR has downgraded to a $25,000 “Silver” package, having been a “Gold” sponsor at the Cartagena meeting.
The deadline for signing sponsorship deals and handing over artwork is February 15.

2 Comments Tagged: ICANN, san francisco, sponsorship

ICANN chair expects more new TLDs delay

ICANN’s new top-level domains program is unlikely to be approved at its San Francisco meeting next month, according to chairman Peter Dengate Thrush.
“We don’t think we’ll be able to approve the final applicant guidebook in March,” he said in a new interview with World Trademark Review.
This confirms my suspicion that changes to the Guidebook made following the upcoming meeting between ICANN and its Governmental Advisory Committee may be too extensive for ICANN to rubber-stamp without first consulting the community.
The ICANN board and the GAC are due to meet in Brussels, February 28 and March 1, to discuss the GAC’s outstanding concerns.
Chief among these concerns is trademark protection, where the GAC is pretty much aligned with the interests of the intellectual property constituency.
Brussels will also cover matters such as geographic names protection and procedures for dealing with controversial strings that governments may want to object to.
While ICANN is under no obligation to adopt the GAC’s suggestions wholesale, if it makes substantial concessions its bylaws will likely demand more public comment on the changes.
ICANN’s board indicated last week that it plans to tell the GAC where it disagrees with its advice at a consultation March 17, one day before its San Francisco meeting.
It also said that it plans to approve a Guidebook “as close as practically possible to the form as set out in the Proposed Final Applicant Guidebook” published in November.
UPDATE: I had an opportunity to put Dengate Thrush’s comments to ICANN CEO Rod Beckstrom this afternoon. He said: “I’m not going to forecast when the final Applicant Guidebook will be approved.”

11 Comments Tagged: brussels, gac, governmental advisory committee, ICANN, new TLDs, peter dengate thrush, san francisco, trademarks

Renew a domain, lose a UDRP?

Renewing a domain name could land you in hot water if you’re hit with a UDRP complaint, if some current thinking at the National Arbitration Forum gains traction.
In the recent NAF decision over FreeGeek.com, panelists argued that if a domain was not originally registered in bad faith (because no trademark existed at the time) renewing the domain after a trademark had been obtained could nevertheless be used to demonstrate bad faith.
Showing that a disputed domain was registered and used in bad faith is of course one of the three pillars of UDRP.
Free Geek Inc runs its web site at freegeek.org. It wanted the .com equivalent, which was registered in 2001, six years before the company acquired a US trademark on its brand.
FreeGeek.com is owned by by Kevin Ham’s company, Vertical Axis. The registration has been renewed every year since 2001.
The three NAF panelists were split on whether renewals post-2007 should be considered evidence of bad faith.

Two of the panelists agree that Respondent should be charged with exercising some diligence at renewal to determine if there are outstanding marks which conflict; one does not.

That’s a disturbing statement, if you’re interested in registrant rights – two panelists basically want domain investors to relinquish their domains if somebody else subsequently acquires a trademark.
What’s more, the panelists’ position appears to be based on a dodgy interpretation of recent UDRP precedent. The decision goes on to say:

The Chair of the Panel is concerned that the Respondent renewed its registration after the trademark was applied for and the USPTO registered the mark. In RapidShare AG and Christian Schmid v. Fantastic Investment Limited… a panel in which the Chair participated, found that “bad faith” could include renewal of a domain name after the issuance of the mark.

It’s a dodgy interpretation because the referenced case, rapidshare.net, does not in fact discuss renewals at all.
In that case, bad faith was actually shown to have arisen due to the domain (which had survived a UDRP just a few months earlier) being bought by a new registrant, not due to a renewal.
What we seem to have here is a case of a couple of NAF panelists thinking about trying to expand the scope of the UDRP. There’s a ton of precedent concluding that renewals are not relevant when establishing whether a domain was registered in bad faith.
With that in mind, you’d think the case would have been a slam-dunk win for the complainant. Not so.
In fact, Ham prevailed on the basis that he had acquired rights to the domain by simply parking it, which constituted a legitimate commercial use.

This panel, in contrast to other panels, finds that the use of this model and evidence of the use is enough to justify a factual finding that Respondent has used the name for commercial purposes
…
Respondent has clearly demonstrated that it acquired rights in the name by usage even if the usage has been limited to a “pay-per-click” links page. Such usage does not itself signal a lack of rights and legitimate interests and can constitute a bona fide offering of goods or services according to Policy

If there are any recent UDRP cases that show just how random a process it is, this is the one.

8 Comments Tagged: freegeek.com, naf, national arbitration forum, rapidshare.net, udrp