Comments of Noncommercial Stakeholder Group members on ‘Closed generic’ TLD applications
As members of the Noncommercial Stakeholders Group (NCSG), we wish to express
our support for a free, competitive, diverse and innovative domain name system.
For that reason, we oppose any attempt by ICANN to become the world’s arbiter
of what constitutes a “generic word,” and we also oppose ICANN’s suggestion
that it arrogate to itself the right to decide whether applicants for generic
terms in the TLD space may operate in a “closed” or “open” manner.
As NCSG stakeholders, our position is driven neither by paying clients nor by
an interest in the success of specific applications. It is based on a
principled commitment to the ‘permissionless innovation’ that has made the
Internet a source of creativity and growth. Our aim is to maximize the options
available to DNS users and to minimize top-down controls. We support the
freedom of individuals and organizations to register domains and use them
legally in any way they see fit. We support experimentation with new ideas
about what a TLD can do. We see no reason to impose ex ante restrictions on
specific business models or methods of managing the name space under a TLD.
As long-term participants in the new gTLD policy development process, we
believe that closed generic applications were anticipated and allowed by the
policies. We suspect that most of the opposition to closed generics comes from
business interests who have discovered that they are competing with the likes
of Google and Amazon for attractive generic TLD strings, and want to eliminate
competitors from string contention. We also note that many registrars have an
economic interest in forcing owners of potentially popular generic strings to
open them to mass registration by registrars.
Nevertheless, some neutral observers and legitimate advocates of free
expression and consumer rights have expressed concerns about the implications
of closed generics. We believe that most of their fears are groundless, and
devote the rest of our comments to answering their concerns.
1. Closed vs. open generic TLDs is just a business model choice
There are hundreds of applications for generic words at the top level, such as
.BOOK, .MUSIC, .CLOUD, .ACCOUNTANT, .ARAB or .ART. Some of the applicants for
these domains have chosen to make direct use of the name space under the TLD
for their own sites rather than offering them for broad general use. Amazon,
for example, would probably make .BOOK an extension of its online bookstore
rather than part of a large-scale domain name registration business; Google
would probably make .SEARCH an extension of its own search engine business.
By proposing a managed or vertically integrated generic, Amazon and the others
are simply choosing a business model. They propose to use their gTLD not for
the sale of sub-domains but to support a set of goods or services external to
the domain name industry. We see nothing inherently wrong with this. Indeed,
the main purpose of the new TLD program was to promote innovation and
alternative business models.
In the past, most TLD registries’ business model was to sell millions of domain
name registrations to anyone on a first-come, first-served basis. That
horizontally separated model has served millions of consumers well. Our members
support and often patronize this business model. But there is no reason it must
be the only model. In an environment of thousands of new TLDs, some registries
might want to create a specific image or environment inside a particular TLD.
They might want to control registrations to maintain a reputation, or use them
to support other lines of business, or even give away second-level domains to
customers of their main business. The public benefits from having these
options; ICANN should not pre-empt them.
2. Registration and restricted use of generic terms is already a common practice
Closed generics are no different in principle from Barnes and Noble registering
BOOKS.COM, C/Net news registering NEWS.COM or the Scripps companies registering
FOOD.COM. In all those cases, a company registered a common, generic word in
one of the world’s largest and most widely known global TLDs and used it to
promote their own goods and services. This has not led to any notable issues
related to consumer choice, market power, or attempts to prevent anyone from
using the words ‘books,’ ‘news’ or ‘food’ in public discourse. Applicants for
generic TLDs have proposed basically the same model using a top level name. We
see no relevant difference between the second level and the top level of the
DNS in this case.
Even if we restrict our attention to the top level, there is no relevant
difference between a .BOOKS top level domain and the .MUSEUM top level domain,
which ICANN has already approved. MUSEUM is a generic word, and the
International Council of Museums restricts who can register in that domain.
.MUSEUM is thus a “closed generic”. We also think there is a resemblance
between closed generics and community applications such as .ART or .ARAB. Those
applications are also based on generic terms and several applicants have
proposed to restrict registration eligibility in order to promote content and
reputations supportive of their self-defined communities. We strongly support
their right to do so, should they win the delegation.
In terms of their impact on users and the availability of names, closed
generics are no different from “brand” TLDs when the brand name corresponds to
a generic word. E.g., the domains .APPLE, .DELTA and .BOOTS are generic terms,
yet are also trademarked within certain industry sectors. Giving the TLD .APPLE
to Apple Computer necessarily prevents some apple growers, apple lovers or
people whose last name is Apple from registering a domain under .APPLE. Is this
shocking or a major policy problem? Apparently no one thinks so. But if it is
not a problem when brand owners do it, why does it become a problem when Amazon
registers .BOOK, Google applies for .CLOUD or Toyota applies for .AUTO?
3. Competition and market power
Opponents of closed generics claim that acquisition of these terms by firms
will limit competition in the markets signified by the generic word. It is
argued that registration of the string .BOOK, for example, will give its owner
an insurmountable competitive advantage in the market for book sales. Competing
booksellers, it is claimed, will be severely disadvantaged if they cannot
register under that TLD.
We find these claims to be hysterical and completely unpersuasive. Winning and
controlling the market for books (or anything else) takes a lot more than the
control of a TLD that refers to books. Buyers base their online commerce
decisions on quality of product, reputation or experience with the vendor, and
the content and features of the site, not just the TLD. While a clear and
simple domain label related to one’s trade is certainly helpful in promoting an
online bookstore, no serious antitrust economist would argue that the mere
possession of the .BOOK domain automatically gives its holder market power over
the sale of books. Just ask Barnes and Noble, the current holder of BOOKS.COM,
which is losing market share in the retail book market to the holder of the
AMAZON.COM domain. The semantics of Amazon’s domain have nothing to do with
books, yet Amazon is winning the competition because of its better e-book
fulfillment infrastructure, pricing, selection and other factors.
This example proves that there is no automatic linkage between possession of a
generic domain and domination of the market signified by that domain. It also
proves that viable competition for the market signified by the generic term can
come from firms that possess domain names with no semantic relationship to the
generic term for the industry. There is not even any evidence that the presence
of a generic word in the top level has a competitive advantage over possession
of the generic name in the second level.
All commercial markets can be associated with a generic descriptor (in hundreds
of languages). If ICANN really believes that generic TLDs create market power
and that it is ICANN’s responsibility to mitigate competitive advantages that
might come from their assignment, it would have to make competition
policy-related decisions about thousands of industries in thousands of
different geographic markets. We think this is far outside ICANN’s competence
and mission. We suggest that ICANN leave judgments about market power and
anti-competitive behavior to legally recognized authorities operating under
well-established antitrust laws.
4. Consumer choice
While closed generic TLDs foreclose the option of registering a name under a
generic term, they can also improve the options available to consumers in
markets other than domain name registration services. For example, suppose a
company offering hotel booking services obtains the .HOTEL domain and restricts
it to its own booking services. This means that thousands of individual hotel
web sites cannot register under the .HOTEL domain. But consumers might prefer
an integrated service under a single, clearly identified, trusted domain to a
random grab-bag of thousands of independently operated web sites under the
.HOTEL domain. Such integration and intermediation might actually improve
competition among hotels, as well.
The existence of closed generics does not prevent anyone from continuing to
patronize traditional open registries and registrars if they wish to, and it
appears from the large number of applications that there will be plenty of
those to choose from. For consumers, closed generics represent an additional
option in the marketplace, a different type of platform, not a restriction of
their choice.
5. Free expression issues
Noncommercial stakeholders have consistently tried to apply principles of free
expression to domain name policy. In this long-running battle, we have
resolutely maintained that domain names are a form of expression that fall
under the legal protections afforded spoken and written expression, and we have
steadfastly opposed efforts to extend the scope of trademark protection beyond
its legal boundaries in ways that limit criticism, discussion, and product
comparison.
Giving a registry vertically integrated control over the use of names in its
domain is not a restriction of the general public’s rights so much as it is an
extension of the registry operator’s right of free association and free speech.
When ICANN declares that it can impose an ‘open’ business model on TLD
registries, a business model that elevates mass sales of individual
registrations above all other values, it is harming the cause of free
expression by preventing TLD owners from using the domain to project a
consistent message and feature the kind of content and services they want to
feature. By forcing a generic name to be open to other registrations, they are
forcing a registry into associations it might prefer to avoid.
As free expression advocates, we are deeply concerned about the long term
implications of giving ICANN the authority to decide what is and is not a
generic term and how their use should be regulated. We believe that it moves
ICANN towards content regulation. The last thing ICANN needs in this
politically and culturally contentious world is to insert itself into battles
over the meaning and significance of non-trademarked words.
We are also disturbed by the favoritism shown to trademark holders, which gives
them an unquestioned right to control the content and management of a closed
generic associated with a trademark, but denies that right to anyone else using
a generic term.
One of the most unfair and misguided accusations made against generic TLDs is
that they would give the TLD registrant “ownership” of a generic word. This is
just false. Registering a generic-word domain does not and should not vest the
registrant with any exclusive rights outside the domain name system.
Registering .COFFEE in the top level, for example, cannot stop anyone from
uttering, printing, writing or otherwise making use of the word “coffee”. It
also does not prevent someone from registering the word in the second level of
open TLDs, or registering the term in other languages or scripts, or
registering different strings with similar meanings, such as CAFÉ. The
registrant simply gets exclusive use of the unique string COFFEE in the top
level of the domain name space administered by ICANN.
The DNS is a vastly extensible resource, so there are plenty of domains to
accommodate diverse names in the top, second and third levels of the DNS. By
regulating the right of domain name registrants to operate closed generics,
ICANN would actually limit free expression by imposing collective obligations
and top-down regulations on domain owners.
Conclusion
In closing, we reiterate our responses to the two questions ICANN posed in its
request for comments. ICANN asked:
* Are there objective criteria for determining whether a string is generic?
* Are there specific circumstances under which a particular TLD operator
should be permitted to adopt "open" or "closed" registration policies?
The answer to the first question is No. By venturing into the dangerous
business of classifying words for regulatory purposes ICANN would be creating a
new form of centralized, global content regulation that would pose long-term
threats to freedom of expression. We would prefer to keep ICANN out of that
territory altogether.
The answer to the second question is that ICANN should not be dictating
business models. The choice of a business model should be left to registries
subject to the discipline of the market. There should be no intervention until
and unless there is a well-documented problem related to monopoly power, such
as occurred with .COM in the late 1990s. In cases where problems can be proven,
competition authorities in the US or EU or other jurisdictions are in the best
position to act lawfully and with expertise. ICANN's only significant
obligation should be to ensure that sufficient open gTLDs exist to provide
choice for registrants and competition amongst registries and registrars of
open gTLDs. It should not be requiring specific instances of gTLDs to be
completely open, partially open or closed.
Signed (partial list, as of March 4)
Dr. Milton Mueller, NCSG Executive Committee, Professor, Syracuse University
Robin Gross, Chair, NCSG, IP Justice Director
Avri Doria, NCSG member and independent research consultant
Prof Andrew A. Adams, NCSG member and Professor of Information Ethics, Meiji
University
Nicolas Adam, NCSG member and Ph.D student
Brenden Kuerbis, NCSG member and postdoctoral researcher
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