Companies that both support and oppose new gTLDs

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

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.

Dyson confirmed for new gTLDs Senate hearing

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.

US Senate to hold new gTLDs hearing

A US Senate committee is to hold a hearing into ICANN’s new generic top-level domains program next Thursday.
The Committee on Commerce, Science, and Transportation will “examine the merits and implications of this new program and ICANN’s continuing efforts to address concerns raised by the Internet community.”
It will be webcast on the Committee’s web site.
It is believed to have been scheduled due to lobbying by the Association of National Advertisers, which has an ongoing campaign to put a stop to the new gTLD program.
It will follow a similar hearing by the House Subcommittee on Intellectual Property, Competition and the Internet in May, which was used to vent outrage about the program but ultimately delivered nothing.
(Note: this story has been updated from the originally posted version to reflect information contained in the official announcement.)

Massive group forms to kill off new gTLDs

ICANN’s new nemesis is called CRIDO.
Eighty-seven companies and trade groups have formed the Coalition for Responsible Internet Domain Oversight, a lobby group set up to kill ICANN’s “deeply flawed” top-level domains program.
It’s led by the Association of National Advertisers, which emerged this August as a vocal opponent of new gTLDs and has spent the last few months recruiting allies.
Its new domain, crido.org, is registered to the ANA’s PR firm and currently redirects to the ANA’s gTLD microsite.
The new group said in a press release today:

On behalf of its many constituencies and industries, CRIDO is committed to aggressively fighting ICANN’s proposed program, citing its deeply flawed justification, excessive cost and harm to brand owners, likelihood of predatory cyber harm to consumers and failure to act in the public interest, a core requirement of its commitment to the U.S. Department of Commerce.
…
If the ICANN program proceeds, CRIDO firmly believes, the loss of trust in Internet transactions will be substantial. In addition, the for profit and non-profit brand community will suffer from billions of dollars in unnecessary expenditures – money that could be better invested in product improvements, capital expenditures and job creation.

CRIDO’s members comprise 47 trade associations, most but not all American, and 40 companies, many of them major household names such as Coca-Cola, Burger King and Kellogg.
Together, they have signed a petition to the Department of Commerce, ICANN’s overseer in the US government, asking it put a halt to the new gTLDs program
The questions now are whether Commerce will do anything concrete to address the demands and, if not, whether CRIDO will decide to put its lawyers where its mouth is instead.
Here’s a handy table of all CRIDO’s members.
[table id=3 /]

Companies that can’t apply for .brand gTLDs say they have decided not to apply for .brand gTLDs

Hewlett-Packard and Proctor & Gamble have ruled themselves out of applying to ICANN for .brand top-level domains, or so they claim.
Bloomberg yesterday reported a distinct lack of enthusiasm for new gTLDs from many large brands, leading with quotes from P&G and HP:

P&G, the world’s largest consumer products company with more than 50 brands including Tide detergent, Pampers diapers and Crest toothpaste, won’t apply for new suffixes, said Paul Fox, a spokesman. HP, the biggest computer maker, considers the program costly and has no plans to take part, said Gary Elliott, vice president of global marketing.
“A lot of companies are looking at the same math as we are and saying, ‘Let’s stop this proposal from happening,’” Elliott said in an interview. “There’s a tremendous amount of confusion about what this means and what the costs are.”

HP’s Elliot is chairman of the Association of National Advertisers, the most vocal opponent of the new gTLD program, as the Bloomberg report notes.
One fact the report doesn’t mention – and I’d bet Elliot didn’t volunteer – is that HP and P&G cannot apply for .hp or .pg due to ICANN’s strict three-character minimum for new gTLD strings.
HP had campaigned for ICANN to scrap the two-character prohibition for a number of years, though it usually also noted that in principle it was opposed to the program.
Nevertheless, it strikes me as disingenuous for the company to say it’s decided against a .brand on the basis of cost, when ICANN essentially made its decision for it years ago.
P&G, which mostly makes cosmetics and toiletries, has also ruled out applying for gTLDs to represent any of its 50 or so well-known brands, Bloomberg reported.
The internet will have to go without .tampax and .pampers for the foreseeable future.
General Motors, Wal-Mart, Adobe, Porsche, Vodafone and Puma are all generally negative on the program but are still evaluating their options, according to Bloomberg.
It’s quite possible that these outfits are just as opposed to the new gTLD program as HP and P&G.
But if they’ve been talking to consultants, they will also have been advised not to publicly talk about their applications. Nothing can be gained by going public before April 12.

What’s At Stake conference bans new gTLD consultants

A conference in New York next month has been set up for marketers to discuss ICANN’s new top-level domains program without pitches from consultants.
What’s At Stake, scheduled for November 1, is for new gTLD skeptics, primarily marketers from large companies that will be impacted by the program.
It’s going to discuss the implications of the program and a few ways ICANN could tweak it to make it less daunting for large corporate applicants.
The conference, found at whatsatstake.com, is being organized by New York marketing pro Judy Shapiro, in conjunction with CADNA, the Coalition Against Domain Name Abuse.
Former ICANN chair Esther Dyson, who has recently emerged as a fierce critic of the program, is scheduled to keynote the event.
The goal is not to “bash ICANN”, Shapiro told DI in an interview yesterday.
Unlike the Association of National Advertisers and other trade groups, the conference will focus on changes that could be made to the program, rather than its outright suspension, she said.
Primarily, Shapiro wants to see ICANN name the date for a second round of applications.
“If they just said they’re going to do another auction in so many months time, it would be a thousand times better right away,” she said, referring to a second application round rather than an actual “auction”.
Currently, the first application window is scheduled to run from January 12 to April 12 next year. There’s no fixed date for a second round, and some say it could be five years before we see one.
This has economically incentivized new gTLD consultants and registry service providers to play up the “clock is ticking” and “it may be your only chance to apply” memes.
While accurate, this has arguably helped cast the domain name industry yet again as a bunch of borderline extortionists focused primarily on pumping defensive registrations.
It also could mean that some large companies fire off applications for far more gTLDs than they could conceivably need or use, just in order to “defensively” own a keyword related to their industry.
If that happens, it’s quite possible that we’ll see a bunch of dormant or otherwise half-assed extensions go live, substantiating the view that new gTLDs are a waste of time and that .com is king, etc. etc. etc.
The ICANN program as it stands today is “brilliantly constructed to force everyone to buy everything they want in one fell swoop,” Shapiro said.
The problem with naming a second-round date is of course that the first one is likely to take years to run its course. Everybody is expecting some kind of litigation, which could delay any schedule.
Shapiro herself expects that there will be a lawsuit designed to delay the program at some point between now and January.
Shapiro’s background is in corporate brand management for companies such as AT&T, Lucent and CA. She currently runs the online marketing company engageSimply.
“I was very familiar with ICANN. It was not a mystery to me,” she said, explaining her decision to launch the conference. “But I found I was clueless [about the new gTLD program] and I was shocked that I was clueless. I did a survey of 40 friends at top companies, and they were clueless too.”
She decided to offer a conference after she read an August 16 AdAge op-ed by Alexa Raad, CEO of the consultancy Architelos, which she said many marketers dd not understand.
But What’s At Stake is an invitation-only event, and new gTLD consultants are not welcome.
“I am paying for it, I do not want any pitches,” said Shapiro.
While she is trying to secure the attendance of an ICANN executive, she said the organization is being “not so forthcoming”, even maybe a little “defensive”.
If true, this is a pity. It strikes me that these the kinds of people ICANN needs to be reaching out to, even if it means one of its regular expository go-to guys has to squirm in his chair for a few hours.
“They’ve done such a bad job reaching out to this community,” Shapiro said. “Everyone I’m talking to has said: Why are they doing this?”
I put it to her that the new gTLD program has been in development for several years, and that literally anybody was able to participate in the creation of the Applicant Guidebook.
“The problem has been that the issue of domain management falls usually under the technical and legal sides of the house,” she said. “There’s been no collaboration between the IT, legal and marketing folks.”
Marketing people, usually focused on making short-term numbers, are only just waking up to the possibilities and potential problems that new gTLDs will create, she indicated.
The message that the new gTLD program is a cross-disciplinary challenge is also one that many new gTLD consultants have been preaching since even before ICANN approved the program in June.
There’s a convergence of views, to an extent, here. The problem seems to be the apparent disconnect between what the domain name industry thinks marketers should think and what they do think.
Marketers have been far more focused recently on the “local/mobile/social triad” of disruptive advertising technologies, rather than on new gTLDs, Shapiro said.
“The ICANN industry is completely disconnected from the realities of marketing industry,” she said.
The other demand Shapiro/CADNA has for ICANN is for the program to be made more corporate-friendly, but this appears to be very much a secondary concern.
The program currently requires applicants to disclose personal information about their company principals, which sits uncomfortably with many senior executives at large brands, for example.
The Continued Operations Instrument, a financial bond designed to fund failover support for defunct registries, is also a concern. As I noted earlier in the week, it seems unnecessary to impose this on single-registrant .brand applicants.
There are already at least two special provisions in the Applicant Guidebook that exclude .brand registries from certain commitments, so creating more would not be unprecedented.
The problem of course is that as soon as ICANN starts giving extra privileges to certain classes of applicant, it runs the risk of creating loopholes that can be gamed by other applicants.
What’s At Stake starts at 8.45am local time November 1. Shapiro said she’s hoping to webcast it and possibly even allow questions from people not able to attend in person.

ANA finds SEO more effective than Facebook

Advertisers are “beginning to question the effectiveness” of social media marketing, but they’re still mostly sold on the benefits of search engine optimization.
That’s according to a new study from the Association of National Advertisers, the results of which have just been published.
The ANA’s survey of 92 marketers gave SEO an “effectiveness rating” of 52%, the highest rating given to any of the six categories respondents were asked to comment on.
However, that represented a decline of three percentage points from a similar survey in 2009.
Social networking sites (presumably including Facebook, although names were not named) received an effectiveness rating of 28%, up from 17% two years ago, ANA reported.
SEO and social sites were used in marketing by 88% and 89% of respondents respectively.
ANA president Bob Liodice said in a press release:

While marketers have substantially increased their use of newer media platforms over the past few years, they are beginning to question the effectiveness of some of these vehicles. The ANA survey indicates a strong willingness by marketers to integrate innovative new approaches into their marketing mix; however, this enthusiasm is tempered by concerns regarding the return-on-investment of these emerging options.

While it’s all speculation at this point, SEO improvements are often pointed to as a potential (and I stress: potential) benefit of new dot-brand or category-killer top-level domains.
The ANA is the current opponent-in-chief of ICANN’s new gTLD program.

ICANN to hire conflict of interest experts

ICANN is to bring in ethics experts to advise it on its conflicts of interest policy, addressing the ongoing controversy over its former chairman’s move to the domain industry.
The organization plans to “engage an external firm with expertise in advising on ethical issues”, according to the minutes of a September 15 meeting of its Board Governance Committee.
The consultants will be tasked with helping to “develop an ICANN Ethics Regime or set of Guidelines for the Board, the staff and the community.”
ICANN has been faced recently with calls to impose post-employment restrictions on board members and staff, in order to prevent a “revolving door” between it and the industry it essentially regulates.
This follows former chairman Peter Dengate Thrush’s move to new gTLD applicant Minds + Machines just a few weeks after voting to approve the new gTLD program.
Senator Ron Wyden and the Association of National Advertisers are among those making the call, and the US Department of Commerce, which oversees ICANN, appears to have heard it.
But as I reported earlier in the week, it may actually be illegal for ICANN, as a California corporation, to contractually ban employees from joining domain name companies after they quit.
However, the BGC has other ideas about how to strengthen ethics without imposing these potentially problematic employment restrictions.
It’s now talking about a ethics policy with “disclosure and abstention requirements” for directors “surrounding future interests or potential future interests”.
While the policy has yet to be written, one can imagine a scenario in which an ICANN director would be prevented from voting on a policy that would be likely to enrich them in a future job.
Cherine Chalaby, Bill Graham and Ray Plzak are the BGC members who will be leading the board discussions, which are expected to continue in Dakar later this month.
The ethics issue was first raised publicly by ICANN president Rod Beckstrom during his opening address at the Singapore meeting in June — before the new gTLD vote and before Dengate Thrush’s departure.

Would an ICANN ethics policy break the law?

Calls for a new ethics policy to prevent a “revolving door” between ICANN and the domain name industry stepped up today, with the Association of National Advertisers entering the debate.
But would such a policy be illegal in ICANN’s home state of California?
The ANA and others wrote to ICANN today, in response to a public comment period on the question of whether ICANN should revise its conflicts of interest policy.
ICANN had asked whether the policy should be changed in order to let its board of directors vote to give themselves a salary. They’re currently all unpaid except the chair.
But the responses so far have instead largely focused on the perceived need to stop directors (and to a lesser extent staff) from taking lucrative industry jobs after they quit.
That was perhaps inevitable given the recent mainstream media coverage of former ICANN chair Peter Dengate Thrush, who took a high-paying job with new gTLD applicant Minds + Machines just a few weeks after helping to push through approval of the gTLD program.
The ANA’s president, Bob Liodice, wrote:

There is, at a minimum, legitimate reason for concern that the lack of adequate conflict of interest policies have led to the development of a growing perception that Mr. Thrush (and perhaps other senior staff who recently have left ICANN) may have let future career prospects influence their official duties.

(The other senior staffer he refers to could only be Craig Schwartz, the former chief gTLD registry liaison, who quit ICANN to join a likely .bank applicant in June.
While there are good reasons that Dengate Thrush’s move looks extremely fishy to outsiders, I’ve yet to hear any compelling arguments that Schwartz, who I don’t think had any high-level policy-making power anyway, did anything wrong.)
The ANA is of course the ring-leader of the ongoing campaign to get ICANN to rethink the new gTLD program in its entirety.
Liodice’s letter goes on to outline a number of suggestions, posed as questions, as to how ICANN could improve its conflict of interest policy, such as:

should ICANN consider reasonable restrictions or a moratorium on post‐service employment of ICANN staff by, or the contracting of such staff members with, parties under contract to ICANN, or whose businesses are materially affected by any decision made by the Board during the staff member’s tenure?

In other words: should ICANN staff be banned from joining registrars and registries after they leave?
In two other letters to ICANN today, Coalition for Online Accountability, International Trademark Association and American IP Law Association (collectively) and the French government make similar calls for future employment restrictions, albeit only for ICANN directors rather than staff.
But here’s another question: if the community asked ICANN to institute a revolving-door prevention policy, could it legally do so? A bit of digging suggests it might be tough.
According to the minutes of an August 15 meeting of ICANN’s Board Governance Committee:

The BGC discussed that as a private sector organization, ICANN is limited in its ability to place restrictions on future employment, though there are many things that ICANN can do to address these concerns, such as continued strict adherence and enforcement of confidentiality provisions.

The matter was also discussed by the full board at its retreat last month, and is on the agenda for the public meeting in Dakar, Senegal, at the end of October.
While ICANN does have pseudo-regulatory power (all enforced through contract) it is at the end of the day a California corporation, which is bound by California law.
And in California, it may not be legal to unreasonably restrict employees’ future job opportunities.
I’m not a lawyer, and this may not be applicable to ICANN for any number of reasons, but consider how California law deals with so-called “non-compete clauses” in employment contracts.
The text “every contract by which anyone is restrained from engaging in a lawful profession, trade, or business of any kind is to that extent void” is on the California statute books.
And in 2008, the California Supreme Court interpreted this rather strictly, ruling that “non-competition agreements are invalid under section 16600 in California even if narrowly drawn”.
So could ICANN legally prevent staff or directors from jumping into the for-profit sector when they please? Is there any point in the community even debating the subject?
At this point, any members of the California Bar reading this are welcome to throw their $0.02 into the comments section below.