Poor nation support crucial to new TLD talks

Whether to provide discounts for new top-level domain applicants from poor countries has become a critical obstacle in the process of getting ICANN’s new gTLD program approved.
Not only are its policy-making bodies going through a bout of infighting over proposals to help developing nations, but it is also being seen as a “major political risk” to ICANN’s global credibility.
Sources say that the Governmental Advisory Committee is increasingly concerned that a lack of support for poorer nations could used to bash the gTLD program and discredit ICANN itself.
There are fears that the Group of 77 could use the perception that ICANN works primarily for the benefit of the developed world to push for more UN-based governmental control of the internet.
These concerns were apparently raised during the ICANN Board-GAC teleconference on Friday, and will continue to be discussed in the run-up to the Singapore meeting.
Merely applying for a new gTLD will cost a minimum of $185,000 in direct ICANN fees, potentially rising dramatically in the case of complex or contested applications.
That sum also excludes the many more hundreds of thousands of dollars required to create an application that meets ICANN’s stringent financial and technical stability demands.
Many have estimated that an application for a new gTLD could require an first-year outlay of easily over $1 million.
Unsurprisingly, this may exclude applicants from poorer nations, particularly non-profit and community-based initiatives.
There’s a worry that if support mechanisms are not in place for the first round of applications, culturally or commercially valuable IDN gTLDs will get snapped up by wealthy western companies.
Warning: More Acronyms Ahead
To come up with solutions to this problem, ICANN in April 2010 asked for what is now called the “Joint SO/AC Working Group on New gTLD Applicant Support” – JAS for short.
JAS was chartered by, and comprised of members of, the Generic Names Supporting Organization and the At Large Advisory Committee, two of ICANN’s policy bodies.
Earlier this month, JAS submitted its draft second milestone report (pdf) was submitted to the ICANN board. It’s more of a collection of ideas than a structured framework for applicant support.
It calls for, among other things, fees and financial commitments reduced by as much as three quarters for applicants from about 50 poor nations, if they can show they are (essentially) worthy and needy.
It also suggests that such applicants could have their requirements to support the new DNSSEC and IPv6 technologies from day one – which would raise start-up costs – eliminated.
Unfortunately, the GNSO and ALAC apparently had quite different expectations about what the JAS would produce, and since January the group has been working under a split charter.
Registries and registrars were (and are) worried that JAS was going too far when it recommended, for example, discounted application fees.
Because ICANN has priced applications on a cost-recovery basis, there’s a real concern that discounts for poor applicants will translate into higher fees for wealthier applicants.
Broadly, it’s an example of the usual tensions between commercial domain name industry stakeholders and other groups playing out through quite arcane due process/jurisdictional arguments.
For the last couple of weeks, this has manifested itself as a row about the fact that JAS submitted its report the report was submitted to the ICANN board before it was approved by the GNSO.
Mind The GAC
If it’s the case, as sources say, that the GAC is urgently pressing for applicant support measures to be available in the first round of new gTLD applications, this puts another question mark over ICANN’s ability to approve the Applicant Guidebook in Singapore a month from now.
The GAC “scorecard” of problematic issues has since November stated that ICANN should adopt the findings of the JAS.
But today the JAS is nowhere near producing a comprehensive solution to the problem. Its recommendations as they stand are also unlikely to attract broad support from registry/registrar stakeholders.
Many of its current suggestions are also highly complex, calling for ICANN to establish special funds, staggered payment or repayment programs and additional applicant background checks.
They would take time to implement.
There’s been some talk about the idea that ICANN could approve the Applicant Guidebook before the JAS work is complete, but I’m not sure how realistic that is or whether it would receive the GAC blessing.
If the GAC is worried that ICANN’s very legitimacy could be at risk if it goes ahead with the program before the developing world is catered for, we could be looking at another big roadblock.

VeriSign drops $150,000 on ICANN Singapore

VeriSign, which signed up for an unprecedented $500,000 sponsorship package for ICANN’s meeting in San Francisco, has spent a rather more modest amount for the June meeting.
The company is currently listed as a Platinum Elite sponsor for the Singapore meeting, which kicks off June 19. This tier has a list price of $150,000, though I believe ICANN’s prices are negotiable.
VeriSign’s two main registry services competitors, Neustar and Afilias, had already signed up for cheaper sponsorship tiers, with lower visibility.
It would be my guess that the company waited for its rivals to show their hands before deciding to how much it needed to spend to trump them.
The Singapore meeting may see the approval of the Applicant Guidebook for the new top-level domains program.
(UPDATE: Thanks to the reader who pointed out that ICANN will almost certainly vote to approve the renewal of VeriSign’s .net contract in Singapore.)
There are 19 sponsors for Singapore so far, but currently no takers for the two available top-tier Diamond packages, which are listed at $250,000.
The amount VeriSign coughed up for San Francisco is believed to have largely contributed to the speaking fees of former US president Bill Clinton.
ICANN expects to make about $1.2 million from its three fiscal 2011 meetings, which is less than the cost of a single meeting.

Still no new TLDs agreement with GAC

ICANN and its Governmental Advisory Committee have yet to resolve their differences over the new top-level domains program, putting a question mark over the current approval timetable.
In a joint statement released early this morning, following a teleconference on Friday, the ICANN board and GAC confirmed that their talks have not yet concluded.
But ICANN still thinks approval of the program’s Applicant Guidebook could come by June 20, the second day of the forthcoming Singapore meeting:

The latest discussion and ICANN Board and GAC agreement on the benefits of having a face-to-face meeting in Singapore pave the way to possible Board consideration of program approval on 20 June 2011.

This seems to serve as confirmation that the board and GAC will meet for a last-ditch attempt at compromise on June 19. ICANN has already moved around schedules to accommodate the meeting.
Outstanding areas of disagreement continue to include rights protection mechanisms for trademark holders and processes for governmental objections to controversial TLD applications.
Negotiations so far have comprised at least four days of face-to-face talks over the last few months, which had mixed results.
ICANN has given a lot of ground already, but it seems that it has not gone far enough for the GAC. Chair Heather Dryden said in the statement:

the GAC appreciates the time taken by the Board to discuss remaining issues on the call and looks forward to continued progress as a clear signal that the Board is committed to enabling the formulation of true community consensus in developing policy that is in the global public interest as well as increasing the overall accountability and transparency of the organization.

The current talks take place against the backdrop of the renewal of ICANN’s IANA contract with the US Department of Commerce and NTIA, which gives ICANN many of its powers.
Larry Strickling, head of the National Telecommunications and Information Administration, has publicly indicated that he may use the renewal as leverage to squeeze concessions from ICANN.
Two weeks ago, he said that he was “unclear” about whether June 20 was a realistic target for Guidebook approval.
Recently, Strickling also met with European Commissioner Neelie Kroes where they found common ground on new gTLDs and ICANN’s accountability and transparency goals.

African Union yanks .africa bid support, seeks registries

The African Union has called for registry operators to express their interest in managing the proposed .africa top-level domain.
It has also confirmed that it is not currently backing DotConnectAfrica’s longstanding bid to apply to ICANN to operate .africa.
DCA has for some time been touting its support from a number of African governments, including the AU, which is required for a geographic TLD bid to be approved by ICANN.
But the AU said in a statement last week:

The AU Commission was at some point approached by an organization now known as DCA seeking endorsement and support for in its bid to use of the domain name.
…
The AU Commission would like to hereby categorically state that it is not supporting any one individual or organization in this bid.

The statement glosses over the August 2009 letter from AU Commission chairman Jean Ping, which offers to aid DCA with its efforts to gain government support for .africa.
With its support for DCA no longer applicable, the AU yesterday issued its official call for Expressions of Interest from experienced registry operators:

DotAfrica will serve a community which spans over a large portion of region, therefore providing registrants with accrued possibilities for establishing their Internet presence. It is expected that the Africa small and medium size enterprises will greatly benefit from DotAfrica, as they thrive beyond their local markets to invade the regional and continental marketplace.

The EOI does not set out any guidance on what the AU expects to see in a proposal – it doesn’t even specify whether it’s looking for a sponsor or a back-end operator – it merely asks for audited financial statements and a potted corporate bio.
The deadline for the EOI is June 3.
The .africa bid has become fiercely political recently, with DCA throwing around accusations of corruption and back-room dealing.
Its outrage has been centered largely on an AU task force on .africa that was created last November, and its chairman, Nii Quaynor.
He is the registrant of dotafrica.org, which was previously used in a .africa bid that competed with DCA’s.
Other task force members are involved with AfTLD, the African ccTLD association that has also announced it is preparing a .africa bid.
In a blog post this week, DCA calls for the task force to be abandoned.

Does Obama endorse Whois privacy?

The US government today released its latest International Strategy For Cyberspace, and it seems to acknowledge privacy rights in domain name registration.
The 30-page document (pdf) envisions a future of the internet that is “open, interoperable, secure, and reliable” and “supports international trade and commerce, strengthens international security, and fosters free expression and innovation”.
It calls for the US and its international partners to set norms that value free speech, security, privacy, respect for intellectual property and (because this is America, remember) the right to self-defense.
Domain names get a mention, in a statement that could be read, without much of a stretch of the imagination, as support in principle for private Whois records:

In this future, individuals and businesses can quickly and easily obtain the tools necessary to set up their own presence online; domain names and addresses are available, secure, and properly maintained, without onerous licenses or unreasonable disclosures of personal information.

That’s open to interpretation, of course – you could debate for years about what is “unreasonable” – but I’m surprised Whois privacy merited even an oblique reference.
Most government and law enforcement statements on the topic tend to pull in the opposite direction.
The new strategy also seems to give ICANN – or at least the ICANN model – the Administration’s support, in a paragraph worth quoting in full:

Preserve global network security and stability, including the domain name system (DNS). Given the Internet’s importance to the world’s economy, it is essential that this network of networks and its underlying infrastructure, the DNS, remain stable and secure. To ensure this continued stability and security, it is imperative that we and the rest of the world continue to recognize the contributions of its full range of stakeholders, particularly those organizations and technical experts vital to the technical operation of the Internet. The United States recognizes that the effective coordination of these resources has facilitated the Internet’s success, and will continue to support those effective, multi-stakeholder processes.

NTIA calls for ICANN to “walk the walk”

A US National Telecommunications and Information Administration official today said ICANN needs to prove it can “walk the walk” when it comes to accountability and transparency.
Speaking on a panel at the inaugural Nominet .uk Policy Forum here in London today, NTIA associate administrator Fiona Alexander said it was time for ICANN to “up its game”
On a panel about regulatory systems for the internet, Alexander reiterated US support for the ICANN model, but said that ICANN board too often acts without the consensus of its stakeholders.
Quoting from speeches made by her boss, assistant secretary Larry Strickling, she said the US supports the December recommendations of ICANN’s Accountability and Transparency Review Team.
“The ICANN board has until June to implement these recommendations,” she said.
It wasn’t clear whether that was a slip of the tongue, or an indication that the NTIA plans to hold ICANN’s feet to the fire over its implementation timetable.
The Affirmation of Commitments calls for ICANN to “take action” on the ATRT report by June 30, but ICANN is planning a longer-term roll-out
It has some good reasons for tardiness. Adopting the ATRT-recommended changes to its relationship with the Governmental Advisory Committee, for example, will require more bandwidth than ICANN and the GAC have to offer before the June deadline.
“Governments are only going to want to get more involved, not less,” Alexander said.
The Obama administration has a lot of political capital tied up in the idea of “multistakeholderism” – it’s a model it proposes for other fora – but its would-be poster child, ICANN, has a habit of frequently looking more like a red-headed poster step-child.
“It’s time to up your game,” Alexander said of ICANN, “because this really is the model that we need to work.”

.brand TLDs still face barriers

Companies planning to apply for “.brand” top-level domains still have concerns that ICANN’s new gTLD program does not adequately cater to their unique requirements.
ICANN has so far resisted calls from the likes of the Coalition for Online Accountability to create clearly delineated categories of gTLD, instead favoring the one-size-fits-all approach.
But one type of gTLD where the Applicant Guidebook has started to introduce exceptions to the rules is the so-called “.brand”.
In its latest draft, for example, the Guidebook’s Code of Conduct for vertically integrated registries/registrars does not apply to single-registrant TLDs such as .brands.
The Guidebook also makes it mostly clear that ICANN does not intend to re-assign .brands to different registry operators in the event that the brand decides to discontinue the TLD.
But those who are working with potential .brand applicants still have concerns.
Co-existence
Arguably biggest outstanding problem to emerge from the latest set of comments filed with ICANN is the notion of “co-existence”, raised by the likes of Valideus, ECTA and the Business Constituency.
The Guidebook currently calls for TLDs that are potentially confusing in meaning or appearance to be lumped into the same “contention sets” from which only one winner will emerge.
The worry is that this will capture companies with similar sounding brands. ECTA called for a mechanism to exclude .brands from these requirements:

The Draft Applicant Guidebook 6 does not take into account either co‐existence agreements or natural co‐existence. Currently a successful application from NBC in round one would preclude ABC or BBC or NBA in future years. Equally, should both EMI, the music company and ENI, the energy company apply, they would be placed in a Contention Set and could in theory face each other in an auction. In the real world these companies co‐exist.

It’s an interesting point, and not one that’s received a great deal of airplay in recent discussions.
There’s also the problem that companies with two-letter brands, such as HP or BP, are essentially banned from getting their .brand, because there’s a three-letter minimum on new TLDs.
Geographic name protections
The ICANN Governmental Advisory Committee has pushed hard for the protection of geographical terms at the second level in new gTLDs, and has won significant concessions.
One of the results of this is that if Canon, say, has .canon approved, it will be unable to immediately use usa.canon or japan.canon domains names – one of the most logical uses of a .brand.
ICANN plans to enable registries to loosen up these restrictions, but the Guidebook does not currently spell out how this will happen, which leaves a significant question mark over the value of a .brand.
ECTA wrote in its comments to ICANN:

This prohibition severely limits brand owners unnecessarily. On the contrary a .brand domain should provide clients with an intuitive replacement for ccTLDs. It would seem to be more logical if Internet users could replace www.mycompany.de with www.de.mycompany rather than having to type www.mycompany/de.

Registrar discrimination
The BC has called for the Guidebook to be rephrased to made it clear that .brand TLDs should not have to offer their domains through a multitude of registrars on “non-discriminatory” terms.
The BC wants this language adding to the rules: “Single-Registrant TLDs may establish discriminatory criteria for registrars qualified to register names in the TLD.”
Given .brands will have essentially one customer, it would be a pretty crazy situation if more than one registrar was approved to sell them. It may be a hypothetical risk, but this is a strange industry.
UDRP
All new gTLD registries will have to abide by the Uniform Dispute Resolution Process. The problem is that successful UDRP cases generally result in a domain name being transferred to the complainant.
This could result in a situation where a third-party trademark holder manages to win control a domain name in a competitor’s .brand TLD, which would be intolerable for any brand owner.
The BC suggests that domains won in this way should be allowed to be set to “reserved and non-resolving” instead of changing hands.

Three strikes UDRP rule worries Demand Media

Demand Media and the Internet Commerce Association have called for ICANN to drop the “three strikes and you’re out” ban on applying for new top-level domains.
In the current version of ICANN’s Applicant Guidebook, if you’ve lost three UDRP cases in the last four years you’re considered a cybersquatter and effectively barred from applying for a new TLD.
It’s not entirely clear, but it is quite possible that this provision may capture Demand Media and Go Daddy, which, via subsidiary companies, have lost several UDRP complaints.
In comments filed with ICANN yesterday, Demand senior vice president Jeff Eckhaus said that a simple “three strikes” benchmark does not prove a pattern of cybersquatting:

losing a few contested UDRP cases in what amounts to a tiny percentage of their total domain name portfolio certainly doesn’t seem to constitute a “pattern” as most people would define the term
…
by all reasonable standards, it is difficult to conclude that an entity or an individual has engaged in a history/pattern of cybersquatting when they own hundreds or thousands of domain names and have lost a few UDRP or similar proceedings.

The ICA, which represents high-volume registrants, also has a problem with the rule. Principal Phil Corwin wrote ICANN:

We continue to believe that the “three strikes” criteria is too inflexible and that applicant evaluation criteria should take into account the total size of an applicant’s domain portfolio as well as the percentage of adverse UDRP decisions rendered against them in comparison to all UDRP proceedings they have been involved with.

Demand also argues that three strikes is “extremely broad standard that we believe will unintentionally disqualify otherwise qualified applicants.”
That strikes me as quite a weak argument, which could be equally applied to any of the background checks in the Guidebook. A murder conviction will also “disqualify otherwise qualified applicants”.
I’m not sure it’s “unintentional” in either case. If you work from the assumption that ICANN expects Demand and other speculators to successfully apply for new TLDs, it is. If you assume it’s designed to make their lives more difficult, it isn’t.
But Corwin noted in his comments that ICANN can waive the ban in “exceptional circumstances”, and said he suspects this could be used to allow large registrars to pass the background checks.
In any event, as Andrew Allemann has pointed out at Domain Name Wire, the way the Guidebook is phrased there may well be a loophole that would allow Demand and others to slip through.
Go Daddy, which DNW also reports could be affected by the rule, does not appear to have filed any comments on the latest Applicant Guidebook yet.

Governments back Olympic domain bans

ICANN’s Governmental Advisory Committee has called for a ban on domain names containing terms relating to the Red Cross and Olympics movements.
Both organizations have for some time been calling for their trademarks to be added to the list of specially reserved strings that nobody will be able to register under new top-level domains.
The GAC “strongly supports” these demands.
In a piece of uncharacteristically straightforward advice (expect much more of this in the wake of the .xxx decision), GAC chair Heather Dryden wrote to ICANN:

The GAC advises the ICANN Board to approve these requests and to direct staff to reflect the Board’s approval in the May 30, 2011 version of the Applicant Guidebook.

It’s special pleading, of course, but there’s plenty of precedent for the Olympics, Red Cross and Red Crescent being given special protection under national laws, as Dryden notes in her letter.
I’d guess that this is a bone ICANN may be willing to throw, given that it has more important unresolved issues still to discuss with the GAC, some of which could delay the new gTLD program.
The Applicant Guidebook’s current list of reserved names includes the names of ICANN and related organizations, several terms used in networking, and country names.

What happened to ICANN’s .net millions?

Questions have been raised about how ICANN accounts for the millions of dollars it receives in fees from .net domain name registrations.
The current .net registry agreement between ICANN and VeriSign was signed in June 2005. It’s currently up for renewal.
Both the 2005 and 2011 versions of the deal call for VeriSign to pay ICANN $0.75 for every .net registration, renewal and transfer.
Unlike .com and other TLDs, the .net contract specifies three special uses for these fees (with my emphasis):

ICANN intends to apply this fee to purposes including:
(a) a special restricted fund for developing country Internet communities to enable further participation in the ICANN mission by developing country stakeholders,
(b) a special restricted fund to enhance and facilitate the security and stability of the DNS, and
(c) general operating funds to support ICANN’s mission to ensure the stable and secure operation of the DNS.

However, almost six years after the agreement was executed, it seems that these two “special restricted funds” have never actually been created.
ICANN’s senior vice president of stakeholder relations Kurt Pritz said:

To set up distinctive organizations or accounting schemes to track this would have been expensive, complex and would have served no real value. Rather — it was intended that the ICANN budget always include spending on these important areas — which it clearly does.

He said that ICANN has spent money on, for example, its Fellowships Program, which pays to fly in delegates from developing nations to its thrice-yearly policy meetings.
He added that ICANN has also paid out for security-related projects such as “signing the root zone and implementing DNSSEC, participating in cross-industry security exercises, growing the SSR organization, conducting studies for new gTLDs”.
These initiatives combined tally up to an expenditure “in excess of the amounts received” from .net, he said.
It seems that while ICANN has in fact been spending plenty of cash on the projects called for by these “special restricted funds”, the money has not been accounted for in that way.
Interestingly, when the .net contract was signed in 2005, ICANN seemed to anticipate that the developing world fund would not be used to pay for internal ICANN activities.
ICANN’s 2005-2006 budget, which was approved a month after the .net deal, reads, with my emphasis:

A portion of the fees paid by the operator of the .NET registry will become part of a special restricted fund for developing country Internet communities to enable further participation in the ICANN mission by developing country stakeholders. These monies are intended to fund outside entities as opposed to ICANN staff efforts.

That budget allocated $1.1 million to this “Developing Country Internet Community Project”, but the line item had disappeared by time the following year’s budget was prepared.
Phil Corwin from the Internet Commerce Association estimates that the $0.75 fees added up to $6.8 million in 2010 alone, and he’s wondering how the money was spent.
“We believe that ICANN should disclose to the community through a transparent accounting exactly how these restricted funds have actually been utilized in the past several years,” Corwin wrote.
He points out that the contract seems to clearly separate the two special projects from “general operating funds”, which strongly suggests they would be accounted for separately.
Given that .net fees have been lumped in with general working capital for the last six years, it seems strange that the current proposed .net registry agreement still calls for the two special restricted funds.
The oddity has come to the attention of the ICA and others recently because the new proposed .net contract would allow VeriSign for the first time to offer differential pricing to registrars in the developing world.
The agreement allows VeriSign to “provide training, technical support, marketing or incentive programs based on the unique needs of registrars located in such geographies to such registrars”, and specifically waives pricing controls for such programs.
It seems probable that this amendment was made possible due to the .net contract’s existing references to developing world projects.
Corwin said ICA has nothing against such programs, but is wary that existing .net registrants may wind up subsidizing registrants in the developing world.