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ICA Concerns Have Not Been Addressed in Version Two

  • To: "2gtld-guide@xxxxxxxxx" <2gtld-guide@xxxxxxxxx>
  • Subject: ICA Concerns Have Not Been Addressed in Version Two
  • From: Phil Corwin <pcorwin@xxxxxxxxxxxxxxxxxx>
  • Date: Mon, 13 Apr 2009 16:25:42 -0400

Attorneys at Law
1301 Pennsylvania Avenue, N.W.
Washington, D.C. 20004-1701
Philip S. Corwin, Partner

By E-Mail

               April 13, 2009

Board of Directors
Internet Corporation for Assigned Names and Numbers (ICANN)
4676 Admiralty Way, Suite 330
Marina del Rey, CA 90292-6601

Re: Second Version of New gTLD Draft Applicant Guidebook

Dear Members of the ICANN Board:

This comment letter is submitted by the Internet Commerce Association (ICA) in 
regard to ICANN’s February 19th notice establishing a fifty-two day period for 
public comments on Version Two of ICANN’s Draft Applicant Guidebook for new 
generic Top Level Domains (gTLDs).

ICA is a not-for-profit trade association representing the direct search 
industry. Its membership is composed of domain name registrants that invest in 
domain names (DNs) and develop the associated websites, as well as the 
companies that serve them. Professional domain name registrants are a major 
source of the fees that support registrars, registries, and ICANN itself. The 
ICA is an International Member of ICANN’s Commercial and Business Constituency 
and presently has more than 120 members located in the United States and 
thirteen other nations.

ICA previously commented in a detailed December 15, 2008 letter regarding 
Version One of the Draft Applicant Guidebook; our letter may be found at 
http://forum.icann.org/lists/gtld-guide/msg00164.html . As few if any changes 
have been made in Version Two of the Draft Applicant Guidebook as regards the 
major issues that we previously commented upon we hereby reference and 
incorporate that correspondence in this comment letter. We are therefore 
re-submitting the Executive Summary from that prior letter along with 
additional clarifications relating to provisions of Version Two.

The ICA continues to have extremely serious concerns about the potential for 
new gTLDs to introduce differential pricing at both new and incumbent 
registries, and to undermine existing registrant rights by extending 
trademark-like rights to geographic names at the second level and by 
undermining and supplementing the Uniform Dispute Resolution Process (UDRP). We 
cannot support any opening of the application process for new gTLDs until these 
matters have been satisfactorily addressed.

Summary of ICA Concerns Regarding Version Two of the Draft Applicant Guidebook.

Pace and Prioritization

ICANN must proceed cautiously in its consideration of new gTLD applications and 
should announce in advance a prioritization system to assure orderly and 
comprehensive review.

While ICANN has announced that the initiation of application acceptance for the 
first round of new gTLD applications will not occur prior to December 2009, it 
has yet to provide convincing documentation that it is capable of properly 
processing hundreds of such applications simultaneously, nor has it indicated 
that it will establish any prioritization regime for consideration of these 

Length of Comment Period and Number of Drafts

ICANN has not provided sufficient time for review of and comment upon the draft 
gTLD Applicant Guidebook and should provide a comment period of no less than 
sixty days following publication of the next revision, and should also consider 
a third comment period if considerable controversy or questions persist.

The comment period for Version Two of the Guidebook is only one week longer 
than that for the initial version; we see no reason why this period was not 
made substantially longer given that Version Two will still be the focus of 
discussion at ICANN’s Sydney meeting to be held from June 21-26. We do commend 
ICANN for committing to at least a third version of the Guidebook. However, as 
the major issues of concern to ICA have not been substantively addressed, much 
less satisfactorily resolved, in Version Two we believe it is incumbent upon 
ICANN to commit to a fourth Version prior to finalization and first round 
application acceptance – assuming that those major issues are adequately 
addressed in the third version.

Price Controls

The new gTLD process must not be used to resurrect much less validate the 
concept of differential pricing by registries; any exceptions to this policy 
must only be for a carefully circumscribed group of “closed” registries subject 
to strict numerical registration limits. Likewise, ICANN should continue 
adhering to vertical separation of registries and registrars and to enforcing 
equal access policies for registrars, with any exceptions limited to a narrow 
category of single organization gTLDs.

In this regard, we have reviewed the March 2009 document prepared for ICANN, 
INTERNET REGISTRIES”. We find this document to be more in the nature of an 
opinion piece than a well-documented and convincingly analyzed report, and we 
also find the author’s opinion to be non-persuasive. Mr. Carlton asserts:

The fact that major TLDs are currently subject to price caps further constrains 
the ability of new gTLD registry operators to charge non-competitive prices. 
More specifically, the current agreements between the U.S. Department of 
Commerce, ICANN, and VeriSign cap the price increases that VeriSign can charge 
registrars for both the .com and .net TLDs. Several other non-sponsored TLDs 
(such as .info and .biz) are also subject to price caps. While the 
appropriateness of these price caps may be debatable, the existence of the caps 
limits the prices that new gTLDs can charge by capping the price that the major 
registry operators can charge.

Mr. Carlton presumes that the current price cap that limits VeriSign’s ability 
to raise registry    fees during its current contract period will constrain 
initial pricing at new open gTLDs. But there are serious flaws in this 
reasoning. The .com settlement entered into by ICANN allowed VeriSign to avoid 
a competitive rebid for operation of the registry, resulting in registry 
pricing that is widely believed within the ICANN community to be 50 to 100 
percent above what market competition would have produced. In short, Mr. 
Carlton is relying upon an inexcusably high pricing regime to act as a 
restraint upon pricing at new open gTLDs. Additionally, the scale of 
registrations is so much greater at .com than what any new gTLD can expect 
during its initial years of operation (if ever) that none can anticipate 
achieving the economies of scale that should have resulted in a substantial 
reduction in registration costs for .com registrants.

Mr. Carlton also fails to address the concerns expressed by many that the 
authorization of new open gTLDs without any price restraints would permit 
operators of the very incumbent gTLDs cited in his report to assert that, under 
their contracts with ICANN, that very act would free them from being further 
subject to price constraints. If that contention is correct then the 
constraining effect he cites would no longer be operative. Further, his 
assertion that “Concerns about opportunistic behavior by registry operators are 
further limited to the extent that new gTLDs provide services using registrars” 
neglects to address the fact that ICANN is considering easing vertical 
separation of registries from registrars.

Finally, in regard to Mr. Carlton’s assertion that “The absence of price caps 
would likely facilitate experimentation by new gTLD registries with respect to 
pricing mechanisms…new registry operators may choose to experiment with usage 
based pricing.”(Emphasis added), this is exactly the scenario that most 
concerns us. “Usage based pricing” appears to be a euphemism for differential 
pricing; that is, the imposition of different prices on registrants for the 
same registry service based upon traffic to or the economic success of the 
particular domain name. Our view is that a registry fee is compensation for a 
ministerial service and that this fee should be the same for all domains at a 
particular registry. Once usage based or differential pricing is permitted 
registries will be able to “tax” the success of domains.

Mr. Carlton recognizes that “Registrants that adopt a particular Internet 
domain name face costs from switching registries because the use of the TLD in 
the domain name prevents Internet addresses from being ported across 
registries. That is, the holder of a domain name that wants to switch 
registries must, at a minimum, adopt a new TLD…This can create an incentive for 
registry operators to act opportunistically by raising prices above levels 
consumers might reasonably expect.” Yet his paper fails to address the issue of 
whether allowing the introduction of new gTLDs without price restraints, 
including the ability of registry operators to impose usage based or 
differential pricing, would allow the operators of the incumbent registries to 
assert the same right in regard to their registrants (who would stand to lose 
both substantial investment capital and customer traffic and goodwill if they 
were to switch from an incumbent to a new registry). Until that issue is 
adequately addressed ICA must insist, at a minimum, that the proposed standard 
registry contract for new gTLDs specifically prohibit differential pricing 
based on usage or any other factor.

Geographic Names

ICANN should reverse its adoption of the GAC position relating to prior 
approval for any geo-gTLD and revert to the GNSO position providing 
governmental entities with standard objection rights. Any suggestion that 
governments have any ability to object to second level geo-domains on any 
grounds outside the scope of the UDRP should be rejected outright.

Our prior letter conveyed our belief that ICANN had already conceded far too 
much to the GAC when it rejected the GNSO recommendation that nations and 
intergovernmental organizations be restricted to utilizing the standard 
objections procedure when they believed an abuse of their national or other 
significant geographic name would be subject to abuse at the first level under 
a proposed gTLD application. Despite the facts that these organizations already 
possess their own ccTLDs and that map names cannot be trademarked, ICANN has 
proposed to allow these entities to block any proposed gTLD that had not 
received their formal endorsement or statement of non-objection. The direct 
search industry created by domainers offers consumers an alternative to search 
engines when they seek information, and geographic names are one of the chief 
means by which consumers seek relevant information about providers of products 
and services associated with a particular locality.

Version Two does nothing to correct this error. Even worse, the GAC continues 
to press for control of geographic and other names of national significance at 
the second level of the DNS – and ICANN continues to entertain this 
overreaching. This is outrageous, and acquiescing to this demand will cripple 
the potential of new gTLDs to achieve commercial success and best serve the 
needs of global consumers.

A recent exchange of letters between GAC Chairman Janis Karlkins, ICANN Board 
Chairman Peter Dengate Thrush, and ICANN CEO Paul Twomey only heightens our 
concerns in this regard.

In his March 10th letter to Chairman Thrush(available at 
 Mr. Karlkins reiterates the GAC’s unreasonable view that geographic name 
should enjoy protections not just similar to but superior to those of trademark 
owners under GAC Principle 2.7, which provides that “Applicant registries for 
new gTLDs should pledge to: a) adopt, before the new gTLD is introduced, 
appropriate procedures for blocking, ay no cost and upon demand of governments, 
public authorities or IGOs, names with national or geographic significance at 
the second level of any new gTLD; b) to ensure procedures to allow governments, 
public authorities or IGOs to challenge abuses of names with national or 
geographic significance at the second level of any new gTLD.” (Emphasis added.)

ICANN CEO Paul Twomey wrote to Mr. Karlkins on this subject one week later, on 
March 17th (letter available at 
http://www.icann.org/correspondence/twomey-to-karklins-17mar09-en.pdf ). Mr. 
Twomey’s letter starts by referencing the Board’s Resolution of March 6th 
relating to geographic names, which reiterated the Board’s general agreement 
with the proposed treatment of geographic names at the top level in the Draft 
Guidebook and directed ICANN staff to make contact with the GAC by March 17th 
“in order to continue communications with the GAC to find a mutually acceptable 
solution. Mr., Twomey goes on to declare that the GAC’s demand for blocking and 
challenge procedures at the second level is “challenging” because of the need 
of multi-national companies  seeking to establish new gTLDs for “geographic 
names at the second level to replicate their business operations” and because 
the term “names with national or geographic significance” is far too broad, Mr. 
Twomey further notes that ICANN generally lacks authority to establish 
challenge processes at the second level beyond the existing UDRP.   But then, 
given the Board’s direction to ICANN staff, he nonetheless declares that 
“recent discussions suggest that there may be possible mechanisms that offer 
protections to country and territory names at the second level”.

We can only wonder what discussions he is referring to, and what these possible 
mechanisms might be? ICANN’s Board unfortunately seems committed to seeking 
compromise with the GAC’s unreasonable demand for trademark-plus protections 
for geographic names – when it has already compromised too much. Subjecting 
second level names to no-cost, on-demand blocking by countries and other 
entities would be a major policy error severely detrimental to the interests of 
consumers and private sector entrepreneurs who wish to serve them.

We also continue to be concerned by the apparent suggestion that if the needs 
of multinational companies can be protected in this process that a different 
and less favorable resolution might be acceptable for smaller business 
interests. As we stated in our December 16th letter, “the notion … that such 
second level restrictions might be inappropriate for “multi-national companies” 
and “brand name holders” implies that they might be acceptable vis-à-vis 
individual and small business entrepreneurs, a notion that we find offensive 
insofar as it would establish one favorable rule for large corporations and 
another far more stringent rule for small businesses. “

Rights Protections and the UDRP

Strong, cost-effective, and readily implemented protections for rights holders 
should be established but they must be limited to enforcing their rights under 
existing law and not be premised upon the creation of broader rights by ICANN 
fiat. It is for this reason that we object to creation of a reserve list of 
trademark names as this would provide rights protections beyond the geographic 
and relevant marketplace limitations of trademark law. We also object to the 
imposition of any new rights or procedures that would supplant or supplement 
the UDRP absent extensive consideration of such proposals in a process that 
ensures that registrant concerns about current UDRP enforcement trends are 

It has become clear since the filing of our first comment letter that 
significant potential alterations of the rights of registrants under the UDRP 
are being put in play in the context of the rules being developed for new 
gTLDs, and that the process for development and consideration of such proposals 
is one that is heavily biased toward intellectual property interests and that 
fails to meet normal ICANN transparency requirements.

Subsection 7 of Article I, Section 2 (Core Values) of the ICANN Bylaws states 
that ICANN’s decisions and actions should be guided by a commitment to 
“Employing open and transparent policy development mechanisms that (i) promote 
well-informed decisions based on expert advice, and (ii) ensure that those 
entities most affected can assist in the policy development process.” And 
Section 1 of Article III states that “ICANN and its constituent bodies shall 
operate to the maximum extent feasible in an open and transparent manner and 
consistent with procedures designed to ensure fairness.” Unfortunately, these 
principles are not being observed in the development of proposed “solutions” 
for rights holders in new gTLDs, as ICANN has delegated the lead role in the 
development of new policies to the Intellectual Property Constituency (IPC) and 
it is now proceeding in a manner that unfairly excludes the views of 
registrants and that is not transparent as that term is generally understood 
and implemented in other ICANN undertakings.

During its March 6th meeting in Mexico City the ICANN Board adopted a 
Resolution on “Protection for Trademarks in New gTLDs”. The opening paragraph 
of this resolution notes that “these issues exist today within the existing 
gTLDs”, an admission that heightens our concern that any “solutions” adopted in 
the new gTLD process will be retroactively imposed upon existing gTLDs. In the 
Resolution the Board requests the IPC, in consultation with ICANN staff, to 
convene an Implementation recommendation team (IRT) “to develop and propose 
solutions to the overarching issue of trademark protection in connection with 
the introduction of new gTLDs”.

The IRT has now been constituted. The domainer community and many other 
registrant interests that will be directly affected by any alteration or 
supplementation of registrant rights in the UDRP have been excluded from its 
membership. Contrary to the Board’s directive that the IRT “solicit input from 
the interested constituencies prior to its first session” we know of no such 
outreach effort. Further, the IRT has chosen to avoid such standard 
transparency mechanisms as providing a publicly archived mailing list; audio 
recordings and transcriptions of all its teleconferences and face-to-face 
meetings; and a submission of interest disclosure statements by all IRT 
members. Rather, the IRT has chosen to only post minutes of its meetings and 
teleconferences on a delayed basis and, so far as we are aware, has neither 
collected nor publicly posted interest disclosure statements from its members.

In addition to these substantial procedural shortcomings, reports indicate that 
the IRT is discussing second level “solutions” that will substantially affect 
existing registrant rights under the UDRP, including the establishment of an 
expedited procedure for dealing with domains alleged to be “cybersquatting”, as 
well as creation of a protected marks list. The UDRP can hardly be uniform if 
one version exists, at least for the time being, in regard to incumbent gTLDs 
while another version less protective of registrants applies to new gTLDs. It 
remains our position that any alteration of the UDRP should only occur through 
a dedicated and transparent process that is open to the participation of all 
affected parties, and that it is unacceptable for this matter to be addressed 
on an expedited basis as a subsidiary issue within the new gTLD context through 
a truncated and non-transparent process controlled by a constituency with a 
particular bias.

Adding to our concern is the input being provided to ICANN and the IRT by the 
World Intellectual Property Organization (WIPO), which is proposed to be the 
only designated provider of dispute resolution services for legal rights 
objections in the new gTLD process. In an April 3rd letter to ICANN (available 
at http://www.wipo.int/export/sites/www/amc/en/docs/icann030409.pdf ) WIPO 
further elaborates its thinking on trademark rights protection mechanisms 
(RPMs) at new gTLDs. WIPO concedes that, under one of substantive criteria it 
is proposing for an Expedited Suspension Mechanism (ESM) “a significant 
majority of UDRP disputed names would be captured” , and also suggests that the 
UDRP’s present requirement for a complainant to demonstrate bad faith 
registration and use should be altered to one of bad faith registration or use.

This WIPO correspondence makes absolutely clear that a substantial substitution 
for and undermining of the UDRP is being put in play in the new gTLD process. 
ICA will continue to register our strong objections to any alteration of the 
UDRP proposed to be implemented through an expedited and one-sided process. As 
we stated in our December 15th letter: “Any alteration or supplementation of 
the UDRP should not be implemented as a footnote to new gTLD implementation but 
only after presentation to and consideration by the community -- and such 
process must take into consideration and redress concerns with the present UDRP 
voiced by registrants and not simply react to the complaints of trademark 

Law and Public Morality Objections

We oppose permitting law and public morality objections to new gTLDs unless 
narrow and clearly articulated criteria for such objections can be established, 
because if they are not then the DNS could become a censorship regime grounded 
in the whims and personal views of individual jurists.

Version Two of the Guidebook, while providing some scant clarification on this 
matter, still fails to provide clear guidance as to what might trigger a 
determination that “an applied-for gTLD string would be contrary to equally 
generally accepted identified legal norms relating to morality and public order 
that are recognized under general principles of international law.” While we 
oppose the approval of gTLD strings that promote violent lawless action; 
discrimination based upon racial, ethnic, or religious grounds; or child 
pornography or other sexual abuse of children; we continue to have serious 
concerns about potential abuses of an open-ended morality and public order 

As we commented on December 15th, ICANN’s own background memo on this subject 
admits that “‘Extensive research has shown that it is difficult to identify 
existing generally accepted legal norms relating to morality and public order.’ 
Yet ICANN is still proposing that gTLDs not be contrary to norms that do not 


We hope that ICANN will find our additional comments useful as it continues to 
revise the draft Applicant Guidebook. We certainly hope that the next version 
takes on the task of fully grappling with the issues that most concern our 
members, as Version Two has provided little if any clarification on these 
critically important matters. Indeed, as regards pricing regimes, geographic 
names, and trademark protections, the process seems to be developing in a 
manner that is quite adverse to the legitimate interests and expectations of 
commercial registrants.

Thank you for your consideration of our views in this matter.


Philip S. Corwin

Counsel, Internet Commerce Association

Philip S. Corwin
Butera & Andrews
1301 Pennsylvania Ave., NW
Suite 500
Washington, DC 20004

202-347-6875 (office)

202-347-6876 (fax)

202-255-6172 (cell)

"Luck is the residue of design." -- Branch Rickey

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