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COMMENTS from CHUCK WARREN regarding Overstock.com/ SC SDL Allocation Framework

  • To: <allocation-framework@xxxxxxxxx>
  • Subject: COMMENTS from CHUCK WARREN regarding Overstock.com/ SC SDL Allocation Framework
  • From: "Marilyn Cade" <marilynscade@xxxxxxxxxxx>
  • Date: Sun, 13 Jul 2008 20:55:03 -0400

Comments on the ICANN Single  Character Second Level domain name (SC SDL)
Allocation Framework (Framework). 


Consistent with ICANN's  philosophy of openness and transparency,  previous
comments on behalf of Overstock have made clear their interest  in
registering and using "O" at the  second level as their registered domain
name in order to  facilitate and enhance the interaction of customers with
the  services that  Overstock.com and Worldstock.com provide to end users
located  in  several countries.   


To summarize, Overstock operates totally as an  online business with no
storefronts; its presence  on the world wide web is based  on  an  identity
that  is centered around its  brand name and its use of "O" as its 'mark' in
online advertising. Overstock also operates Worldstock.com; a service to
artisans in developing countries to bring their goods and products to
markets in developed economies. Worldstock is unique in that it represents
an investment in the developing country artisan community to enable those
entrepreneurs to increase their market access through Worldstock's unique
distribution services, and to support their families, and their communities
through their expansion of economic opportunity for their unique products
and goods.  


Overstock seeks to register 'O' at the second level and fully intends to use
it as an enhancement to its online identity.  It was pleasing to see the
publication of the  "Single character Second level Domain Name (SC-SLD)
Allocation Framework" on 13 June 2008.  The comments in  this contribution
are based on that document, and offer both support to the general framework,
and a few suggested  improvements.


First, it is time for ICANN's Board to approve an allocation mechanism that
meets the broadly supported comments provided through the extensive comment
processes that ICANN has  undertaken. The Board should now move to approve a
process in August 2008 that can be implemented, at least for the second
level, single letter names,  in legacy non sponsored gTLDs.


While agreeing in  general  with  the  proposed framework, the  comments in
this document offer the following recommendations for improvements and


As has been stated time and again and based on  the existing precedent in
second level registrations, the allocation framework must recognize and take
into account 'existing rights' of parties who  have demonstrated use in
certain strings/well established[1] trademark registrations by including in
the  allocation framework a form of sunrise process that prequalifies
parties to participate in the auction /allocation processes. 


Like others from the community,  these comments support an auction process
for second level strings; but also agree with others that there can be a
difference in the kind of auction processes that are utilized.  A form of
'managed' auction is suited to  those letters where there is a documented
and well established history of public use of a single letter  name;  while
other letters without such identities, or single digits may be  allocated by
a different allocation process. 


These comments are in agreement with  others  in the  community and support
the  recommendations of the  Reserved  Names Working Group, that sponsored
gTLD registries can be afforded unique roles in the establishment of the
policies guiding allocation of second level characters; however, the 'unique
role' must also ensure consistency with  the  overall allocation framework
established by ICANN, and  the  use and purpose of such strings, if
allocated, must be limited to, and required to be focused upon their
community that is pre-established by their 'sponsorship' agreement with


These comments further support that the benefit of funds associated with the
unique status of these reserved single letters and single digits must go to
benefit the interests of the  broader ICANN stakeholders, through a process
established by ICANN and should be consistent with the programmes identified
and agreed through the bottom up Strategic Planning Process/Operational Plan
and budget process.  These comments strongly support that a significant
portion of the funds received should contribute to ICANN's reserve fund;
which is a contribution toward furthering ICANN's stability and security,
and must be a key imperative for all parties who are  committed to ICANN's
role and mission.


Concerns have been expressed in public comments and in dialogue about
concerns that parties who are bidding, or who are operating registries or
registrars may benefit from the allocation of such unique names. These
comments agree with those who have called for a transparent and well
documented process that is operated by an independent third party, based on
well publicized procedures.  


These comments further support a process where the resulting funds from the
unique allocation process would be provided into a special and unique
fund(s) at ICANN, and used in a manner consistent with programs already
supported by the bottom up strategic planning/operational plan/budget
process of ICANN in order to avoid any assertions of collusion, or
appearance of bias in any manner during the allocation process.  Consistent
with comments of those who have participated in the development of the
Reserved Names Working Group, and who have commented on the allocation
process, it is imperative to have a transparent, arms length procedure that
can be fully trusted by all parties.  


I note that the Summary of Public Comments, prepared by ICANN staff,
published 23 December and supported by an ICANN Synthesis on Single
Character Domain Names at the Second Level, published 27 February 2008,
summaries 36 comments, which were gathered over a 60 day period.  These
comments supported moving forward with allocating single letter second
character names. It should be noted that comments did not deal directly with
allocation of digits, but seemed to focus more on single letters.  This is
not surprising, since the origin of interest in allocating these reserved
names came after Overstock drew attention to the interests of some parties,
with identified and pre existing interests in such names, in examining how
to establish an allocation process.


The community supports that the second level, single letter names [2] be
allocated in a manner consistent with the comments received during the
public comment processes. The most recent public comment process focused
only on the allocation framework.  Minimal public comments have been
received related to the allocation framework; in fact, there were a total of
10 comments received, as of 12-7-08, with the majority of comments coming
from 'sponsored' gTLD parties who are affiliated with two registries who are
proposing a different approach for their sponsored gTLD. 


My comments in this document support the "Framework" proposed with some
enhancements as noted below:  The "Framework" should include the following
core elements:  


1)     Utilization of an allocation process that is market based

2)      Fees should be 'market based' but take into account that revenue
resulting from allocation should be  allocated to ICANN to benefit the DNS
for the benefit of the broader ICANN stakeholder community, including via
the  establishment of restricted funds to provide and support participation
by parties from developing countries in ICANN's security and  stability
processes; support of the stability of the DNS itself, and contribute to the
stability of ICANN itself through making a significant contribution to
ICANN's reserve fund.

3)      The framework allocation process must recognize pre- existing
'rights' in second level names (e.g., include a form of a sunrise or
clearing of existing rights, if any), before the allocation process is
initiated so that those who participate in any 'allocation /auction' for
such names are able to use the names, and not subjected to UDRP proceedings,
or further litigation between applicants over the right to use the name in
ecommerce [3]). Without this qualification, the funds that can benefit the
ICANN community will be tied up in costly and time consuming legal battles
where other parties, but not the ICANN community will benefit. 

4)    Domain name applicants in the 'allocation/auction' process should pay
a fee that is unique to this category of domain name with an understanding
and clear statement by ICANN in the allocation processes that these
proceedings are not prejudicial to the registration fees of any other second
level names or strings in gTLDs.  


Security of the Internet's DNS is a key priority to a company like
Overstock.com, who does 100 % of its business 'online'.  The  benefits to
the broader ICANN community  and  the contribution that these  unique funds
can make to assisting ICANN to contribute uniquely to endeavors to deepen
and  support the participation  of parties from developing countries in
ICANN's processes, and in  various efforts to increase further the security
of the  DNS should be a priority.  ICANN is facing many changes, and many
challenges to deepen and broaden participation in its activities. The  kinds
of informational resources;  participation/outreach  support, and the
contribution to the  ICANN reserve fund that Overstock.com envisioned in its
previous proposals were an  effort to  acknowledge the importance of ICANN
itself, through its activities and programs, enhancing the  way that it
interacts with the emerging users  of the Internet, and  the users  from
developing countries. 


ICANN is preparing  to launch a course of action that will lead to the
application process for numerous new gTLDs, the initial introduction of fast
track IDNs; and then addressing  how  to move forward on further
introduction of internationalized  domain  names, enhancing how all parties
interact with  ICANN through vastly increased and improved translation of
materials and meetings; addressing its  role in  the  transition  to IPv6;
dealing  with the  importance of transitioning toward further independence,
and in all cases, trying to  deepen and broaden participation, in particular
from stakeholders from countries  and regions where  the Internet  is less
developed.  All of these policy initiatives and the broader transition of
ICANN toward further independence require further outreach and participation
by parties from around the world who are affected by ICANN's decisions. 


As noted in the ICANN Operational Plan, there needs to be a strengthened
ICANN by investing further resources in the Reserve Fund of the
organization.  Adequate reserve fund/contingency financial resources are, in
fact, in the eyes of many in the business community, a critical element of
security and stability of any organization. The benefits  from pursuing the
release and allocation of the single  letters  at the second  level in  a
principled manner,  allocating such names consistent with the existing
principle of recognizing existing and pre established  rights to use such
strings,  with  the results of the funds from allocation processes  going
to ICANN to contribute to both program, and  to some degree also, to
existing  budget needs will  also fulfill a  core  objective also reflected
in the Operating Plan - establishing  alternate sources of  revenue.  


I join others in the ICANN community in believing that the Board should, in
establishing the  mechanism to receive the proceed from the  allocation
process, provide for safeguards  over the use  of the  funds, ensuing
accountability, and remaining  fully  consistent  with the  Strategic
Plan/Operating Plan/budgeting process so  that  the  community would have
confidence that there is  not  mission  creep in  any way.  

In  order  to  ensure that these funds are available to  ICANN, and  not
tied  up in unnecessary litigation, it is imperative that the Board  approve
an enhanced approach to the Allocation Framework to recognize existing
rights from those parties who can establish such, through the inclusion of a
sunrise process; and to ensure  that  the  proceeds of funds that are
derived from  the  allocation process are provided via mechanisms that  are
directed via ICANN's sponsorship of programmers and activities that benefit
the  broad ICANN stakeholder community.  By continuing to rely upon ICANN's
existing bottom up planning processes, the community can be assured of
transparency and accountability in the development of further programmatic
initiatives.  However, should the Board decide to establish an additional
mechanism, such as a group of independent advisors for administrative
oversight of such funds that are not directly 'on budget' that need not
create a delay in instituting the allocation process? 


I urge the Board to move forward immediately with initiating the managed
allocation process so  that  parties with preexisting uses of the  single
letters, and other interested parties who are willing  to demonstrate that
they intend to fully use  the  names in legitimate forms of e commerce or
for other established and documented purposes are  able to  move ahead, and
that  the funds generated by  the unique allocation process  for  single
letter second level characters can make a significant contribution  to
ICANN's global  community. 


Submitted by Chuck Warren

13 July 2008 



[1] Although some parties have recently 'rushed to register' trademarks in
single letters, ICANN has previous experience with such actions, and in
earlier 'sunrise' processes, recognition was given to the  length of time of
a trademark registration, or established prior documented uses. Criteria can
be developed and applied neutrally and transparently to establish a form of
'pre qualification' for those strings where pre existing rights are claimed.

[2] We are not commenting on the allocation of single digits; it is possible
that the ICANN Board could decide to treat letters differently than digits,
due to the limited number of comments received related specifically to
single digits. 

[3]  During the launch of .biz and .info, .travel, .eu, and  .asia, it was
recognized that unless existing rights of trademark holders were recognized
and taken into account, any allocations would merely be tied  up in endless
litigation, legal disputes, or 

UDRP proceedings.  Overstock has proposed that  ICANN  require a form of
sunrise or identification of pre existing rights  in order to quality to bid
on these names in order to ensure that when a string is allocated, it can be
legitimately be used.  


Failure to recognize pre existing rights will put the allocation of names at
risk to speculators who will immediately turn to the secondary market to
auction the names; lower the value of the names to the legitimate
candidates. In earlier submissions, Overstock proposed a form of managed
auction'; with pre qualification of candidates in those cases where existing
trademarks that are based on use of the name in the marketplace exist.
Since some parties have recently engaged in pursuing trademarks, but have
not established bonafide use over a defined period of time of such strings,
there will be other situations where a sunrise period may not be needed.
Since some names will not have preexisting candidates, Overstock's earlier
proposal would  be consistent  with, in those cases, ICANN utilizing a
different auction process.  


Attachment: overstock.com single letter comments 07.13.08.doc
Description: MS-Word document

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