ICANN Down Under

Posted July 27th, 2009


Recap of Sydney ICANN Meeting — Critical Issues for Businesses
By Mike Rodenbaugh

The ICANN community gathered in Sydney in late June, for the second of three scheduled meetings in 2009.  The primary topics of conversation were the newly hired CEO, and several issues related to the introduction of new top-level domains (TLDs) coming in 2010.  The hot issues about new TLDs involve protection against cybersquatting, protection of the public from expanded opportunity to maliciously abuse the DNS, the introduction of Internationalized Domain Name (IDN) TLDs, and registry-registrar structural separation.  These issues are included among the 8 public comment periods currently open HERE (and 18 recently closed!)

There is plenty going on at ICANN these days, so here’s an update on the most critical issues for businesses of all shapes and sizes.  A broader update published monthly by ICANN policy staff is HERE.  The current timeline for new TLDs calls for a final version of the Applicant Guidebook by end of 2009, and applications from would-be operators in March 2010, with new TLDs coming live in the latter half of 2010.  Clearly ICANN staff and community have much work yet to do, and soon, if this schedule is to become reality.

NEW TLDs — CONCERNS ABOUT TRADEMARK PROTECTION

Several months ago, ICANN Staff identified four ‘overarching issues’ that must be addressed before the new TLD program could launch.  One of those issues was raised forcefully and consistently by trademark owners who fear that new domain spaces will force them to register their trademarks in order to keep cybersquatters from registering corresponding domain names.  With studies showing that major online brands already deal with ten thousand or more current domain name infringements at any given time, their concerns have resonated loudly through the ICANN community.

At the last ICANN meeting, the ICANN Board commissioned a team of trademark experts to consider all of the public comments addressing trademark concerns, and develop recommendations that might be implemented in connection with the launch of new TLDs in 2010.  This ‘Implementation Recommendation Team’ (IRT) produced five significant recommendations contained in their final report HERE.

Of these, the most controversial, and thus least likely to move forward, is the ‘Globally Protected Marks List’ which effectively would give a small subset of the most famous trademark owners special rights to block domain name registrations that precisely correspond to their trademark.  At a public session to discuss the IRT report, not a single person spoke in favor of this proposal, and to say it was forcefully criticized would be a tremendous understatement.  However, the other recommendations were less controversial, and likely would provide great protection against cybersquatting in new TLDs.

The foundational proposal is to create an ‘IP Clearinghouse’ allowing trademark owners to submit information about their trademark rights to one database service provider.  This seeks to overcome the challenge that brand owners have faced in past TLD launches, having to register their trademark rights with each new TLD registry in order to have first right to purchase corresponding domain names during the ‘sunrise period.’  With the IP Clearinghouse, they would only need to submit their info once, and all new TLD registry operators will have equal access to the data.  When someone tries to register a domain that corresponds to a trademark, they would receive a notice of the trademark owner’s rights, and would have to promise not to use the domain name in an infringing manner.  This may provide a deterrent to some would-be infringers, as at least it should eliminate the commonly attempted defense of ‘innocent infringement.’

Another important proposal is to allow a much quicker and cheaper suspension of domain resolution in ‘clear and convincing’ cases of cybersquatting.  For a few hundred dollars, trademark owners would swear out a complaint under the Uniform Rapid Suspension (URS) process.  If the complaint is not timely answered, or the standing trademark specialist is otherwise convinced, resolution to the domain will be suspended.  This contrasts with the current Uniform Dispute Resolution Policy (UDRP) which costs more than $1000 to file (plus thousands of dollars in investigation and legal fees) and takes many months for a decision, all the while the infringer profits from the domain.

Unfounded (and sometimes ridiculous) opposition has been raised as to the substance of the IP Clearinghouse and URS proposals — the comment forum is HERE.  But it is obvious that the UDRP has been entirely ineffective in deterring cybersquatting in the existing TLDs.  So, after ten years of the UDRP, it is clear that new methods are needed to deal with this rampant problem.  The IP Clearinghouse and URS proposals, in conjunction with one another, would strike a reasonable balance between trademark rights, protection of the public, and protection of domain name registrants.

NEW TLDs — CONCERNS ABOUT MALICIOUS USE OF THE DNS

Another of the four ‘overarching issues’ currently delaying the new TLD launch, is the notion that expanded domain space will provide further opportunities for malicious use of the DNS.  Today, problems such as phishing, malware distribution, and child pornography are widespread and growing.  These crimes often rely upon the resolution of a domain name, and can only be stopped by suspending the resolution of the domain name ‘lure’, which is often sent via email or other messaging systems, bringing victims (and child porn perpetrators) to a criminal website hosted at the domain.  Public and private law enforcement entities have witnessed systematic attacks on many registries and registrars who have failed to take adequate (sometimes, any) measures to curtail criminal abuse of their registration systems.  The reasonable fear is that, with hundreds and soon thousands of new TLDs, there will be many more registries and registrars ill-equipped to deal with criminal enterprises.

ICANN staff has recognized that this is a real probability, but seems to be leaning towards the position that ICANN should not require its contracting parties to do anything about the content of websites hosted at registered domain names.  In other words, ICANN staff, at the urging of its contracting parties, seems to be inclined to say that it is not ICANN’s business to police the internet.  While that may be true as a broad statement, it is also undeniably true, as a legal proposition, that ICANN and its contracting parties should do whatever they reasonably can do to avoid contributing to criminal behavior once they have been alerted to their contribution.  This is the very premise on which the UDRP is based, though cybersquatting is generally not considered criminal behavior.

Today, the various contracts — between ICANN, its contracting parties, and domain registrants — are inconsistent with respect to abusive behavior.  Some contracts prohibit it, some do not; some contracting parties take action against it, some do not.  A Working Group has been chartered within ICANN to examine these facts and determine whether consistent provisions and/or enforcement would help protect the public from this harm.  The Working Group workspace is HERE.

NEW TLDs — CONCERNS ABOUT IDN TLDs

ICANN accredited TLDs only come in one language script today, epitomized by .com in English language (aka ASCII script).  For many years, governments and groups of people who speak in other languages and use other scripts, such as Chinese, Russian, Hebrew and Arabic, have been pressuring ICANN to expand the domain space so that domain names can be rendered entirely in these other scripts.  This is one issue of broad agreement in the community, and one of the core reasons that ICANN is expanding the TLD namespace.

But of course, there are many serious complications that will arise once IDN TLDs are launched, with respect to malicious abuse of names, technical functionality and proprietary rights.  How will ‘look-alike’ IDNs be addressed, for example when a word in Cyrillic looks like a famous trademark in English?  How should WHOIS records be rendered for IDN domain names?  How will computers around the world resolve all these new TLDs in a wide variety of scripts?  Who will operate these IDN TLDs, and should governments have priority over existing TLD operators or future gTLD operators?

Several governments, notably China and Russia, are pressing for a ‘fast track’ process to allow TLD representations of their country names in their native scripts — “China” in Chinese characters and “Russia” in Cyrillic would compete with .cn and .ru.  Existing TLD operators argue that this will give those government-backed TLD operators (represented in the CCNSO for country-code TLDs) a large market advantage over the future versions of .com, .asia, etc. in those scripts (represented in the GNSO for generic/global TLDs).

It is likely that a joint working group, with representatives from the CCNSO and the GNSO, will form soon to try to reach consensus as to the best path forward.  Their goal is for both types of IDN TLDs to be released as soon as possible, without adversely affecting one another’s market opportunities, and considering all of the difficulties inherent in the launch of any form of IDN TLDs.

NEW TLDs — CONCERNS ABOUT REGISTRY-REGISTRAR SEPARATION

ICANN was formed eleven years ago, when the .com ‘monopoly’ was broken apart.
At that time, Network Solutions was the sole registry and registrar of gTLD domain names.  ICANN created the system we have today, where registrants place orders with ICANN-accredited registrars, who in turn place the orders with ICANN-contracted TLD registries, many of which use the back-end services of third party registry operators.  It was thought that this system would increase competition for the suppliers of domain names, and thus lower prices for registrants.  It is hard to argue that this has not held true, insofar as the price of .com domain names has dropped dramatically in that time (but is now allowed to rise again by 7% almost every year, under the 2006 agreement between ICANN and VeriSign).

To ensure this structure held, ICANN restricted registries from acquiring directly or indirectly a substantial percentage of any registrar, so VeriSign cannot buy a controlling interest in GoDaddy, for example. Some of the largest registrars have significant stakes in registry operators which also register those TLD names to the public.  For example GoDaddy is one of three minority shareholders in the registry for country-code .me (so Montenegro makes the rules, not ICANN).  Other large registrars, such as Network Solutions and eNom, now are pressing ICANN to eliminate the restrictions on registry-registrar cross ownership of gTLD registries, so that those registrars can compete as registry businesses, sell new gTLD domains directly to the public, and sell them to all other ICANN accredited registrars as well.

Existing registry operators, such as NeuStar (.biz), Public Interest Registry (.org) and others, are in support of any entity becoming a registry or registry operator, so long as that entity does not distribute domain names in the same TLD that they operate as a registry.  They are fighting this new proposal on the basis that registrars have a substantial head start in marketing domain names to the public, and thus can offer prime distribution opportunities to new registries.  These registries and registry operators argue that allowing cross ownership would put them at a competitive disadvantage in convincing new TLD operators to use their back-end services.

On the other hand, some large registrars argue that no registrar or registry business — other than VeriSign with .com and .net — has any ‘market power’ which can be exploited for anti-competitive purposes, and thus they ought not be regulated by cross-ownership restrictions.  They note that, absent proven ‘market power’, it is in consumers’ interests to allow cross-ownership because it will bring operational efficiencies and lower prices to the marketplace.  The registries counter that a number of registrars do in fact have market power in deciding which TLDs to promote, and how.  They argue that a registrar that owns a registry will choose to promote its own cross-owned TLDs over any non-affiliated TLD, thereby actually reducing competition.

A public comment forum concerning antitrust experts’ reports on this issue has recently closed HERE, and ICANN staff is expected to make recommendations which then will be subject to further public debate and comment before the next iteration of the new TLD Applicant Guidebook, expected in late September.

NEW CEO ROD BECKSTROM

The ICANN announcement of its new CEO is HERE, and his own website and bio are HERE.  Beckstrom’s predecessor, Dr. Paul Twomey, has done an admirable job for more than six years, as ICANN and the DNS have expanded exponentially in every way imaginable.  He will remain as an advisor through the end of 2009, and Beckstrom will surely rely on Twomey’s experience and wisdom during the transition period.

Beckstrom steps into the middle of all that is going on at ICANN, and there is widespread, eager anticipation for his fresh perspective and leadership.  He was briefly the top Director of the U.S. National Cybersecurity Center (NCSC), and before that was a successful entrepreneur and CEO who brought his software company public.  He is also an influential speaker and writer about organizational leadership and efficiency, most recently authoring “The Starfish and the Spider:  The Unstoppable Power of Leaderless Organizations”, a best-selling model for analyzing organizations, leadership styles, and competitive strategy.  Certainly ICANN can use this kind of modern thinking, as it is truly a unique organization which defies the notion of top-down leadership, and has many critical issues pending resolution in the very near future.

Mike Rodenbaugh has twice been elected to represent the Business and Commercial Users Constituency at ICANN (www.bizconst.org).  He is an attorney who operates a small law firm in California, Rodenbaugh Law (www.rodenbaugh.com).  The views in this article are Mike’s alone, not those of the Business Constituency, NameSmash or any of his clients.

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Posted in Anti-Counterfeiting, CCTLD's, Conferences, Cybersquatting, Enforcement, gTLDS, ICANN, Internet Security, Registrars, Registries, UDRP by