RE: [bc-gnso] Assessing the "Domain Name Exchange" service proposed by VeriSign

["Michael D. Palage" <michael@xxxxxxxxxx>]

Hello All,

 

I am not a big fan of this proposal. While there may be some market for it,
I have a concern that there is the potential for more harm than good. That
being said, this registry service request has been submitted in accordance
with the Funnel Request set forth in the registry agreement and which gives
ICANN a very limited number of grounds to deny a request (i) could raise
significant Security or Stability issues or (ii) could raise significant
competition issues.. Again, while I personally do not like this service, I
do not see how either of these criteria are met, and I do not believe these
criteria could be objectively met by the GNSO Council passing a resolution
saying so.  Therefore, it is mostly likely that ICANN staff will approve
this request within the 15 day time frame.  If there are no proposed
contractual modifications, no Board action would be required.

 

Listed below are some questions which I have asked of VeriSign and the
answers that they have provided. I think Steve and the other BC leaders
should reach out to VeriSign and see if they would be willing to provide a
briefing on this service to the stakeholder group. Perhaps there may be some
implement options that VeriSign would be willing to consider to address our
concerns.

 

Best regards,

 

Michael Palage

 

<BEGIN QUESTIONS>

 

Question1:  Is the exchange fee paid each time a name is exchanged after
waiting the 30 days, or is the exchange fee paid once and unlimited changes
are permitted for one year provided that the 30 day calendar lock down
period is honored. The reason I am asking is that I am trying to reconcile
the following language in the funnel request ""The registrar's account
balance will be debited the exchange fee at the time of the initial exchange
occurring within a one year term based upon initial registration date."

 

The exchange fee is charged upon initial exchange, subsequent exchanges
during the exchange term are not charged an exchange fee. In the Business
Description section of the Domain Exchange RSEP we provide the business
rules, and I've highlighted two rules which address Michael's statement
around "unlimited changes", just for clarity.

 

VeriSign will offer the Domain Name Exchange Service to all .ICANN
accredited -registrars in good standing for the .net top

level domain. In order to complete a Domain Name Exchange:

? Registrars shall process the transaction through their connections to the
Shared Registration System ("SRS") via the

Extensible Provisioning Protocol ("EPP").

? Registrars will provide the registry with the necessary data to process
the exchange, including the outgoing domain name

and the incoming domain name. This transaction will be processed as a
modification or update to an existing registration

? The registry will validate that the exchange meets the following criteria:

o Registrar must be the registrar-of-record for the outgoing domain name;

o The outgoing and incoming domain name must be within the same Top Level
Domain;

o The outgoing domain name must have been registered for a minimum of 30
calendar days;

o The outgoing domain has not been exchanged within the previous 30 calendar
days; and

o The incoming domain name must be available.

? When an exchange transaction has passed validation, the registry will
execute the exchange by updating the registry

database:

o The registry will modify the domain name for the specified registration by
deleting the outgoing registration and inserting the

incoming domain name;

o The outgoing domain name will have a pending delete status and be returned
to the available pool following expiration of

the pending delete period;

o The incoming domain name will "inherit" all attributes of the registration
including create date, expiration date, name

servers, and statuses. Therefore, there is no Add Grace Period for incoming
domain name; and

o The incoming domain name will only be eligible for subsequent exchange
after 30 calendar days.

? The registry will return a successful response through the EPP Interface.

? The registrar's account balance will be debited the exchange fee at the
time of the initial exchange occurring within a one

year term based upon initial registration date.

? The registry will propagate the change in DNS and Whois.

 

 

Question 2: VeriSign has touted the use of its WhoWas verification as a
mechanism to help identify potential abuse. Will VRSN be charging for this
WhoWas feature or will it be free?

 

As stated in the Who Was Registry Service proposal there will be a nominal
fee in order to offset the implementation, maintenance and operational costs
of providing the service.

 

Question 3: VeriSign says that it will publish "a report that lists the
domain names exchanged as part of a registration." Will there be a fee for
accessing these reports, and how will they be provided and to whom will they
be provided.

 

Domain Exchange reports like all activity reports will be provided to the
registrar of record at no cost, and made available over existing FTP and web
interfaces.

 

<END QUESTIONS>

 

 

 

From: owner-bc-gnso@xxxxxxxxx [mailto:owner-bc-gnso@xxxxxxxxx] On Behalf Of
Susan Kawaguchi
Sent: Thursday, April 08, 2010 6:43 PM
To: icann@xxxxxxxxxxxxxx; 'bc - GNSO list'
Subject: RE: [bc-gnso] Assessing the "Domain Name Exchange" service proposed
by VeriSign

 

It would be good to get clarification on several issues from Verisign.  Do
you think they would talk to the BC about their proposal? 

 

Susan Kawaguchi

Domain Name Manager


Facebook Inc. 

1601 S. California Avenue 

Palo Alto, CA 

Phone - 650 485-6064

Cell - 650 387 3904

 

NOTICE: This email (including any attachments) may contain information that
is private, confidential, or protected by attorney-client or other
privilege. Unless you are the intended recipient, you may not use, copy, or
retransmit the email or its contents."

 

From: owner-bc-gnso@xxxxxxxxx [mailto:owner-bc-gnso@xxxxxxxxx] On Behalf Of
Mike Rodenbaugh
Sent: Thursday, April 08, 2010 3:23 PM
To: 'bc - GNSO list'
Subject: RE: [bc-gnso] Assessing the "Domain Name Exchange" service proposed
by VeriSign

 

Ooops, my post was missing an important "NOT" in second sentence, now
inserted.

 

From: owner-bc-gnso@xxxxxxxxx [mailto:owner-bc-gnso@xxxxxxxxx] On Behalf Of
Mike Rodenbaugh
Sent: Thursday, April 08, 2010 2:50 PM
To: 'bc - GNSO list'
Subject: RE: [bc-gnso] Assessing the "Domain Name Exchange" service proposed
by VeriSign

 

Thanks both Steve and Sarah for the thoughtful posts.  I agree this proposal
needs further consideration and public comment, and should NOT be
'rubber-stamped' by ICANN, like most RSEP proposals.  It certainly has the
potential to unravel a lot of the progress made with the AGP Limits policy.
Another mitigation step could be to limit the percentage of any registrar's
domains that can be exchanged, similar to the AGP Limits policy.

 

We could make a motion for the next GNSO Council meeting on 4/21, to see if
the Council would ask Staff to conduct further consideration.  The deadline
for such a motion is 4/13.  I suspect it would have broad support from the
NCSG, and probably none from the CSG, but it might still pass depending upon
attendance at the meeting, and in any event ought to serve the purpose.  

 

Individual member and constituency comments should also be submitted to
ICANN directly.  Do we have BC consensus at least on the following?

 

[DRAFT]

 

The BC requests that Staff make the preliminary determination, with respect
to Versign's RSEP proposal for "domain exchange" services in the .net TLD,
that this proposal requires further study because it could raise significant
issues with security and stability and/or competition.  Specifically, the
proposal may permit resumption of commercial "domain tasting" activities
which have been curbed by the AGP Limits policy, and therefore appropriate
limitations on the proposed registry service must be considered.

 

Mike Rodenbaugh

RODENBAUGH LAW

tel/fax:  +1 (415) 738-8087

http://rodenbaugh.com <http://rodenbaugh.com/> 

 

From: owner-bc-gnso@xxxxxxxxx [mailto:owner-bc-gnso@xxxxxxxxx] On Behalf Of
Deutsch, Sarah B
Sent: Thursday, April 08, 2010 2:19 PM
To: Steve DelBianco; bc - GNSO list
Subject: RE: [bc-gnso] Assessing the "Domain Name Exchange" service proposed
by VeriSign

 

Steve,

 

Thanks for giving all of us more background on the proposed Verisign
service.  My view is that because this proposal could pass through very
quickly with little ICANN input and has very serious potential consequences
for businesses and brand owners, we should quickly reach out to ICANN staff
and tell them that there are enough concerns that the process must be slowed
down and studied carefully.

 

The concerns I've raised have nothing to do with someone registering generic
names.  Whether we call it "tasting" or something else, the fact remains
that this service allows someone for the price of a single domain name, to
register at least 12 different domain names a year.   So, if you spent $8 to
register 100 domain names under the exchange service, you could wind up
registering nearly 10,000 different domain names.  On its face, this seems
to be a recipe for mischief and abuse.

 

When we had full blown domain name tasting under the AGP for free, the
number of infringements skyrocketed, but even today, brand owners face
thousands of instances of new infringements because cybersquatters are still
willing to pay a relatively low registration fee for the high quality names
that drive traffic.  The recent report on cybersquatting out of Harvard
shows that even vigilant companies like Verizon still face many hundreds of
typosquatting incidents -- all from infringers who are willing to pay a fee
for our trademarked names.   The report estimates that the top 100,000
websites containing cybersquatted domains collectively receive at least 68.2
million daily visitors.  If these cybersquatted sites were considered as a
single website, they would be ranked by Alexa as the 10th most popular
website in the world.  So it is reasonable to be concerned that a service
which allows one to register multiple domain names for a single price will
only add to this problem.

 

I appreciate that Verisign believes it has taken some steps to make their
service more "transparent," but I don't believe transparency is the same as
fixing your business model to prevent infringements in the first place.  A
few questions, comments and ideas:

 

1) A "free" reporting service on exchanged names is better than no reporting
service -- but it appears that the burden, administrative costs and
enforcement costs shifts to business and brand holders, who on a daily or
even hourly basis, must check this reporting service for possible
infringements.  What will Verisign do when the brand holder writes to them
and demands they stop selling the name?  My guess is that they would not be
accountable for taking this name out of circulation and the trademark owner
would be sending numerous cease and desist letters, filing more UDRP actions
and filing more lawsuits.

 

2) Your mention of the WHOWAS service does not say whether this will be
provided for free or at a cost.  In any case, the same concerns about
pushing the burden on trademark owners remains.  Also, what steps does
Verisign intend to take to ensure the accuracy of the information provided
in its WHOIS, WHOAS and its reporting service associated with this service?
Will it permit applicants to "exchange" names through a proxy service?

 

3) Will there be a cap on the number of domain names someone could register
under the exchange service?

 

If Verisign is serious about limiting harms to brand owners, why not: 

 

1) Limit the service to generic names only?  Why not allow trademark owners
to provide Verisign with a list of their registered trademarks that should
not be permitted to be sold under the exchange service and allow them to opt
names out of this service?  

 

2) Why not build in protections for the trademark owner up front when
offering the service?  For example, when an applicant searches for the
availability of a name, the trademarked names provided by owners who opt out
would pop up with a warning telling the applicant that the name is a
trademark owned by a third party, warning them about the penalties
associated with cybersquatting and requiring them to declare that they have
a legal right to use such name.

 

3) Why not beef up requirements for accurate WHOIS contact information and
prohibit exhanging names through a proxy?

 

Obviously, the issues are all quite complicated as are the potential fixes,
so more reason that this proposal be slowed down and studied carefully with
all affected stakeholders.


Thanks,


Sarah

 



Sarah B. Deutsch 
Vice President & Associate General Counsel 
Verizon Communications 
Phone: 703-351-3044 
Fax: 703-351-3670 

 

 

  _____  

From: owner-bc-gnso@xxxxxxxxx [mailto:owner-bc-gnso@xxxxxxxxx] On Behalf Of
Steve DelBianco
Sent: Thursday, April 08, 2010 11:05 AM
To: bc - GNSO list
Subject: [bc-gnso] Assessing the "Domain Name Exchange" service proposed by
VeriSign

BC Members:

On April 5, VeriSign (operator of .com, .net, and .name) proposed a new
registry service called "Domain Name Exchange."  VeriSign's proposal and QA&
is posted at
http://www.icann.org/en/registries/rsep/verisign-dnex-05apr10-en.pdf
Here's how VeriSign describes the service:

Based on ongoing discussions with registrars who represent diverse business
models and market segments, VeriSign has developed the concept for the
Domain Name Exchange Service to allow a registrar to repurpose a domain name
registration that has significant time remaining until expiration.   Today
when a registrant terminates a package of services from a registrar after,
for example, an introductory 1 or 3 month period, the registrar is forced to
recoup the investment in the associated domain via monetization or the
secondary market. The domain exchange will allow a registrar to offer
another registrant a package that sits on top of that same registration
using a new domain.
The Domain Name Exchange Service is an optional service that is designed to
provide registrars and registrants with an effective and efficient way to
manage domain name registration terms for domain names that are no longer
needed.

For many website hosting service providers, the registration of a domain
name is a secondary service.  For example, the European registrar 
1and1 offers web hosting with "free domains included" ( http://1and1.eu ) in
order to attract new clients to establish their online presence.  Domain
Exchange lets 1&1 re-use the registration if a client wants to drop the
website and domain after just a few months.   Registrars would pay around
1.5x the cost of a regular annual registration in order to get the Exchange
option, and they could exchange once per month.  Perhaps there will be
significant demand for this service from registrars who have lots of
turnover with hosting clients.

Domain Exchange is being proposed only for .net domains, but VeriSign may
propose it for .com at some point.  And that's where several BC officers are
already raising concerns that Domain Exchange could be a new form of "domain
tasting" that would lead to even more cyber-squatting and typo-squatting.  

"Domain tasting" is a loaded term in ICANN circles.  "Tasting" is how
domainers test a domain name to learn whether type-in traffic generates
enough advertising revenue to cover costs of registering the domain.    The
names typically tasted were generic words and phrases (like
SpringCleaning.com or SpringFashions.com) that some users might guess at by
entering the URL ( instead of going thru a page-ranked search engine). 
Domainers make money on these domain names by "parking" a page with ads for
related products and services. 

The parked pages that result from tasted names are objectionable in the way
that highway billboards are objectionable, but there's nothing illegal about
monetizing domain traffic with advertising.  Moreover, several BC members
are domainers who monetize traffic this way, and other BC members providing
online advertising services to support the trade. 

But nothing infuriates BC members and Internet users more than tasting or
parking domains that involve trademarked terms or typographical variants
designed to deceive users.  Cybersquatting and typosquatting could increase
if a new service makes it easier to discover domain names that mislead users
into thinking they have landed on a page belonging to a known business or
organization they intended to reach.

Domainers discovered they could taste traffic for 5 days for zero cost by
using the Add Grace Period (AGP) that has always been offered by registrars
and registries.   That led to rampant tasting in domains like .com.   The
ICANN community, incl many in the BC, pushed ICANN to end the practice of
free tasting thru abuse of the AGP privilege.  Using the policy development
process, ICANN effectively eliminated free AGP tasting in 2009
(http://www.icann.org/en/tlds/agp-policy-17dec08-en.htm )

Question is, will a new Domain Exchange service increase the incidence of
trademark and typographical squatting?  I asked my friends at VeriSign (a
NetChoice member) about this concern, and here's what I learned: 

Domain Exchange is not going to replace the free and unchecked tasting that
was done with AGP before 2009.  First, a domain 'taster' has to actually buy
a 1-year registration to be able to use domain exchange at 11 monthly
intervals. That's cheaper than buying a dozen registrations, but its not
free.  Second, it would take a year just to 'taste' a dozen names for ad
traffic.   

Still, VeriSign acknowledges that some parties may see Domain Exchange as a
way to "taste" and then register names that infringe on trademarks.  So
VeriSign is offering additional IP protection tools described in their
proposal, such as limitations on exchanges, free reporting on exchanged
names,  and the WhoWas service (a permanent record of historical Whois).  

VeriSign is open to suggestions from the BC (and IPC) about other tools that
would minimize use of Domain Exchange for TM infringement or other illegal
purposes.  They're also prepared to answer questions in a direct dialogue
with our members if that's easier and quicker than using the public comment
process described below.

So let's begin internal discussions on BC List, with an intent to send
concerns and questions to staff, to VeriSign, and eventually in ICANN public
comments.


Finally, a word about the ICANN process for review and approval of new
registry services: 


ICANN evaluates new registry services thru its Registry Service Evaluation
Process (RSEP).  ICANN staff has 15-days to make a "preliminary
determination" whether this Registry Service requires further consideration
by ICANN because it could raise significant issues with Security & Stability
or competition.  There's no official comment period during these 15 days,
but BC members can always explain concerns to staff.  See RSEP at
http://www.icann.org/en/registries/rsep/rsep.html

If ICANN determines that the service might raise significant Stability or
Security issues, it goes to the Registry Services Technical Evaluation Panel
and simultaneously invites public comment on the proposal (2nd chance to
comment).  This panel has 45 days to do a written report regarding the
proposed service effect on Security or Stability.

ICANN's Board then posts the report for public comment (3rd chance to
comment), and the Board has 30 days to reach a decision. "In the event the
ICANN Board reasonably determines that the proposed Registry Service creates
a reasonable risk of a meaningful adverse effect on Stability or Security,
Registry Operator will not offer the proposed Registry Service."

So there are 2 or 3 chances to comment over a period of 45 days (or 90 days
if the panel raises S&S concerns).