INTA Response

[mheltzer@inta.org]

August 17, 1998

Re:  INTA Response to Request for Comments on Proposed IANA By-Laws

    The International Trademark Association (INTA) would like to thank you, Dr.
Postel, and IANA for your efforts and dedication to foster a consensus for the
creation of a new global structure for the management of names and addresses on
the Internet.  INTA submits this response in the spirit of developing a new
corporation that reflects a true consensus of the relevant stakeholders.

    INTA is a not-for-profit membership organization open to businesses owning
trademarks and those who serve such businesses.  All of INTA's members,
regardless of their size or international scope, share a common interest in
trademarks and a recognition of the importance of brand identity to the
businesses that own trademarks, to the general public, to a competitive economy
and to the global marketplace.  It is in this capacity, as a representative of
the business sector, that INTA responds to IANA's requests for comments on its
draft bylaws for the new corporation.  Rather than respond to each section of
the bylaws, INTA has decided to focus on what it believes is one of the most
crucial issue - stakeholder representation.

    As Vint Cerf, an architect of the Internet, recognizes, "Business has
figured out that the Internet is an important place to be.  The Internet has
grown because of business." (Emphasis added)

    A U.S. Commerce Department study confirms this fact.  Traffic on the
Internet is doubling every hundred days.  By the year 2002, electronic commerce
is expected to surpass U.S. $300 billion.

    Real-life examples also confirm this fact.  Based on the Emerging Digital
Economy Report produced by the Clinton Administration and U.S. Department of
Commerce:

By the end of 1997, Dell Computers regularly sold over $3 million per day via
the Internet, and even reached $6 million during December.
1-800-Flowers sold $30 million online in 1997.
Amazon.com offers a selection of 2 million book titles over the Internet with
sales in 1997 reaching $148 million.

    In addition to the huge financial investment businesses have made on the
Internet, they also have intellectual property interests at stake, one of those
being the brand names under which they sell their goods and provide their
services.  Domain names, by definition, act as identifiers to Internet users for
the websites associated therewith.  This identification is critical to a
business that conducts commerce on the Internet, and as a result, businesses
typically select domain names that incorporate their brand names.  The value of
domain names thus, stems from this association created by businesses, and not
from their mere registration.

This association is also critical to consumers.  According to a 1997
CommerceNet/Nielsen study, by the end of last year, 10 million people in the
U.S. and Canada alone had purchased something on the Internet.  In the virtual
marketplace, consumers rely on domain names for finding their desired products
and services on the Internet.  For this reason, the association between domain
names and businesses serves to reassure consumers that they have reached their
intended destination and to instill confidence in consumers that they are
obtaining the genuine goods and services they are seeking.

Fortunately, groups like IFWP recognize the importance of business and consumer
interests on the Internet.  According to an August 6, 1998 IFWP Consensus Based
proposal, "NEWCO should let users and the market shape the growth of the
Internet."  (Emphasis added) IANA also acknowledges that "whatever new structure
is created must be the result of a true consensus of the relevant stakeholders"
(Emphasis added).  Unfortunately, IANA's proposed bylaws appear to fall short of
recognizing the dramatic role businesses are playing on the Internet. 
Specifically, the bylaws provide for nine Interim Board Directors to be selected
as follows:

NUMBER OF DIRECTORS  APPOINTED BY   STAKEHOLDER REPRESENTATION  
 3   Address Supporting Organization     regional Internet address registries   
 3   Domain Name Supporting Organization     Name registries and registrars of
gTLDs and ccTLDs    
 3   Protocol Supporting Organization    Internet protocol organizations    

    None of these Supporting Organizations expressly include business
stakeholders.  Given that the remaining 9 At Large Directors are to be selected
by a majority vote of all the members of the Initial Board (and the President),
the express absence of business stakeholders from the Interim Board is
especially disturbing.

    INTA fully acknowledges that the interests of all stakeholders on the
Internet should be represented on the Board of Directors for the new
corporation.  However, each stakeholder's representation should be proportional
to their interests.  It is clear from the above-mentioned figures that business
stakeholders make up a substantial portion of the user community on the
Internet.  In this regard, INTA proposes that the Interim Board of Directors
more accurately reflects this fact, and regardless of how it is created, that it
be composed of the following stakeholders in the following proportions:

(1) RiR
(1) ISP
(1) registry/registrar
(1) protocol
(3) business users
(1) brand owners
(1) non-business users

INTA likewise proposes that the composition of the At-Large Directors accurately
reflect the business stakeholders' interests in similar proportions.

The absence of business stakeholders on the Names Council also causes INTA great
concern, especially given IANA's latest revision to the bylaws.  Specifically,
the bylaws state that the Councils (along with the Supporting Organization that
creates them) should have the primary responsibility for proposing policies
within their scope of operation, and creates the presumption that the Board
should defer to the Supporting Organizations and their Councils.  The Names
Council is assigned with the responsibility of making recommendations regarding
gTLDs and ccTLDs, including operation, assignment and management of the domain
name system and other related subjects.  It is exactly these areas that are of
the most concern to businesses and in which they have the most at stake.

Section 4(A)(ii) of the bylaws, however, expressly references only registries
and registrars as part of the Domain Name Supporting Organization.  Business
stakeholders, as well as other non-registry/registrar stakeholders, are lumped
into "other entities with legitimate interests in these issues," and an "other
entity" can only obtain a position on the Domain Name Supporting Organization if
the registries and registrars determine that such entity has a legitimate
interest, and such determination is approved by the Board.  Given the enormous
stake that businesses have in the Internet, the Domain Name Supporting
Organization and Names Council must proportionally represent their interests. 
To ensure this representation, INTA submits that Section 4(A)(ii) of the bylaws
be amended to expressly include representatives of the business sector.