COMMENTS from CHUCK WARREN regarding Overstock.com/ SC SDL Allocation Framework
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 changes. 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 ICANN. 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 Footnotes: [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 |