New gTLDs Program – Comments on GAC Recommended Safeguards [ED-01.FID2408216]
[cid:image003.jpg@01CE50CF.9C8C5D20] May 14, 2013 To: ICANN (comments-gac-safeguard-advice-23apr13@xxxxxxxxx<mailto:comments-gac-safeguard-advice-23apr13@xxxxxxxxx>) From: National Cable & Telecommunications Association Re: New gTLDs Program – Comments on GAC Recommended Safeguards ________________________________________________________________________ The National Cable & Telecommunications Association (“NCTA”) submits the following comments on the additional safeguards for the new gTLDs that have been proposed by the Governmental Advisory Committee (“GAC”). Introductory Statement The National Cable & Telecommunications Association<http://www.ncta.com/> is the principal trade association representing the cable television industry in the United States. Its members include cable operators serving more than 90% of the nation’s cable television subscribers, more than 200 cable program networks, and suppliers of equipment and providers of services to the cable industry. NCTA’s program network members have invested literally billions of dollars to establish and promote some of the best-known and most trusted brands nationally and internationally in cable programming and broadband content. Moreover, the cable operator members of NCTA are the nation’s largest providers of high-speed Internet access. From 1996 to 2012, the cable industry invested over $200 billion in building out advanced hybrid fiber-coaxial cable (HFC) networks and other infrastructure. Numerous products resulting from the efforts and investments by members of the cable industry provide the means by which the new gTLDs will operate. Accordingly, NCTA’s members have a special expertise that enables them to appreciate many of the issues that will be presented by ICANN’s New gTLD Program (the “Program”). NCTA’s members also share the concerns of other trademark owners about the potential impact of the Program, as well as the potentially overwhelming efforts that will be required of them to police their marks in certain of the new gTLDs. If experience with the limited number of gTLDs in existence to date provides any indication of what can be expected when there are hundreds of unrestricted generic term new gTLDs, trademark owners will face the choice of either (a) expending significant resources and incurring substantial expenses to police their marks and take action against abusive registrations of second-level domains in the unrestricted generic term gTLDs or (b) permitting the use of these domain names, which could cause damage to the goodwill associated with their marks and to consumers who may be victimized by fraudulent activities conducted in association with these domain names. I. Background: The GAC Communique Regarding the New gTLD Applications. As stated by ICANN: ICANN’s Governmental Advisory Committee was formed to consider and provide advice on the activities of ICANN as they relate to concerns of governments, particularly matters where there may be an interaction between ICANN's policies and various laws and international agreements or where they may affect public policy issues. New gTLD Applicant Guidebook<http://www.google.com/url?sa=t&rct=j&q=&esrc=s&frm=1&source=web&cd=8&ved=0CGIQFjAH&url=http%3A%2F%2Fnewgtlds.icann.org%2Fen%2Fapplicants%2Fagb%2Fobjection-procedures-04jun12-en.pdf&ei=TT6MUdPqLavb4APLv4F4&usg=AFQjCNGB6JcZ-7T2idYz130LwTUWTjwQ6A&sig2=uo1BAwwBxKk69bgOxKpX9g&bvm=bv.46340616,d.dmg&cad=rjt> § 3.1 at p. 3-1 (May 30, 2011). Moreover, ICANN has specifically recognized that, in the course of the New gTLD application process: The GAC may provide public policy advice directly to the ICANN Board on any application. (emphasis added). New gTLD Applicant Guidebook<http://archive.icann.org/en/topics/new-gtlds/rfp-clean-30may11-en.pdf> § 22.214.171.124 at p 1-10. In turn, Module 3 of the Guidebook provides details on the procedures concerning GAC Advice on New gTLDs. Id. Specifically, Module 3 of the Guidebook states: The process for GAC Advice on New gTLDs is intended to address applications that are identified by governments to be problematic …” New gTLD Applicant Guidebook § 3.1 at p. 3-1. This statement is followed by two examples of the types of issues that the GAC Advice may address. There is no indication that this limited list is intended to be inclusive. Indeed, the use of “e.g.,” prior to the description of potentially problematic issues makes it clear that they are only offered as examples of the types of issues that the GAC Advice may address. In accordance with the foregoing, on April 11, 2013, at the recent ICANN meeting in Beijing, the GAC issued its Beijing Communique<mailto:comments-gac-safeguard-advice-23apr13@xxxxxxxxx> in which it provided its advice relating to the New gTLDs. The Applicant Guidebook provides that the gTLD applicants will have twenty-one (21) calendar days to respond to the GAC Advice, after which ICANN shall consider the GAC advice as soon as practicable. The Guidebook also authorizes ICANN to consult with independent experts. New gTLD Applicant Guidebook § 3.1 at p. 3-3. On April 18, 2013, ICANN published the Communique from the Governmental Advisory Committee on the new gTLD applications and provided the applicants with notice<http://newgtlds.icann.org/en/announcements-and-media/announcement-18apr13-en> of the Communique and of their opportunity to respond. Additionally, however, on April 23, 2013, ICANN announced a twenty-one (21) calendar day period for public comments<http://www.icann.org/en/news/announcements/announcement-23apr13-en.htm> on the GAC Advice, opening as of that date and closing on May 14, 2013. ICANN also gave advance notice of a period for replies<http://www.icann.org/en/news/public-comment/gac-safeguard-advice-23apr13-en.htm> to the comments, opening May 15, 2013, and closing on June 4, 2013. NCTA appreciates the opportunity to submit its comments on the recommendation for additional safeguards for all new gTLDs that is contained in the GAC Communique. II. The GAC Has Recommended Additional Safeguards for the New gTLDs. In addition to expressing objections or concerns regarding specific new gTLD applications, the GAC Communique includes recommendations on safeguards that should be required of each new gTLD, including: * WHOIS verification and checks; * requiring registrants to agree not to engage in abusive activity, such as phishing, distribution of malware and trademark or copyright infringement; * conducting periodic security checks on the domains in its gTLDs to determine if they are engaged in activity that may pose security checks, such as pharming, phishing and malware; * establishing a mechanism for complaints about inaccurate WHOIS information and about domain names being used to facilitate abusive activity or activity that may pose security checks; and * ensuring that there are “real and immediate consequences” for violations, including suspension of the domain name. III. NCTA Supports the GAC’s Recommendation for Additional Safeguards for the New gTLDs and Encourages the Board to Enter Into Consultation with the GAC For Purposes of Making Any Necessary Clarifications to the Proposal. It is well-established that millions of people have been victims of Internet fraud and that the instances of fraud grow nationally and internationally year after year. For example, the Internet Crime Complaint Center has reported that the dollar loss just from U.S. complaints received by it and referred to law enforcement or regulatory agencies grew from $54.0 million in 2002, to $183.1 million in 2005<http://www.ic3.gov/media/annualreport/2005_ic3report.pdf>, to $264.6 million in 2008<http://www.ic3.gov/media/annualreport/2009_IC3Report.pdf>, to $485.3 million in 2011<http://www.ic3.gov/media/annualreport/2011_IC3Report.pdf>. The types of fraudulent activities include identity theft, credit card fraud, e-mail scams, phishing, distribution of malware, sales of counterfeit merchandise, fraudulent auctions, domain name piracy, operation of botnets and various other deceptive and/or illegal practices. Concomitantly, it has been estimated that the bad faith registration of domain names that are confusingly similar to third party trademarks has cost trademark owners over $1 billion<http://www.cadna.org/en/issues/cadna-analysis/real-cost-of-cybersquatting> annually as a result of diverted traffic, lost goodwill and the costs of enforcement. Five parties or groups are involved when a domain name is registered for an abusive or illegal purpose: ICANN, the Registry, the Registrar, the Registrant and the public. Each of the first three profits financially and/or benefits in some other way from the use and/or registration of the domain name: * The Registrar collects a registration fee on which it makes substantial profits. To pick one recent example, the registrar Demand Media<http://www.dailyfinance.com/2013/05/07/demand-media-reports-first-quarter-2013-results/> reported that it earned an average of $9.94 on each of 13.3 million domain names and $10.22 on each of 14 million domain names, for the first three months of 2012 and 2013, respectively. In addition, it has “received more than two million expressions of interest for domains to be registered with new gTLDs.” * The Registry receives a share of the registration fee. For example, VeriSign, Inc.<http://www.icann.org/en/about/agreements/registries/com/agreement-01dec12-en.htm> receives up to $7.85 annually for each .com domain name registered by a registrar. * ICANN receives a payment for each domain name registration. For example, for the .com, .net, .org, .biz, .info, .name, .asia, .jobs, and .mobi top level domains, ICANN<http://www.namecheap.com/support/knowledgebase/article.aspx/1256/7/> is paid $.18 per year for each domain name that is registered or renewed. As a starting point for the revenue received by ICANN, there were approximately 121.1 million<http://www.verisigninc.com/en_US/why-verisign/research-trends/domain-name-industry-brief/index.xhtml?loc=en_US> registered .com and .net domain names in the fourth quarter of 2012 * The Registrant of a second level domain name that is confusingly similar to a registered mark is able to use the domain name as a tool for fraud, abuse or to earn pay-per-click revenue after attracting visitors who are misdirected by the selection of a domain name that is confusingly similar to a third party’s trademark. Moreover, under current law, registries and registrars have limited immunity from liability, even when they are specifically put on notice of abuses associated with domain names over which they have control. Even if they do not have actual knowledge of abuses, some believe they are free to engage in “willful blindness” of what is taking place in their domains. In addition, domain name registrants frequently cloak themselves from taking responsibility of their actions by providing incomplete or false domain name registration information or hiding behind “privacy” or “proxy” services. The number of cases where domain name registrants engaged in fraud or other abusive activity have been identified, served and forced to pay damages is miniscule compared to the level of abuses that occur and losses that are incurred. In contrast, the public, including consumers and trademark owners, has had to bear virtually all the costs that result from the use and registration of domain names for abusive or illegal purposes. For consumers, the costs include financial losses, emotional upset and an undermining of trust. For trademark owners, these costs include diverted website traffic, the amount spent on policing (including investigations, which are often frustrated by cloaked or falsified ownership information, as well as costs and legal fees associated with any eventual UDRP or other legal action) and ultimately the very real damage to the goodwill associated with their marks. Clearly, to date, the distribution of costs and benefits has been one-sided, which calls out for change. The additional recommended safeguards would be a welcome step towards a fairer sharing of risks and benefits. Furthermore, the costs of these changes appear to be minimal, particularly when compared to the revenues earned by ICANN, registries and registrars, as well as domain name registrants. Indeed, there would be no cost involved in requiring registrants to agree not to engage in abusive activity. The other safeguards appear to be technically feasible at a relatively low cost. Significantly, none of the additional safeguards proposed by the GAC would impose any liability on registries or registrars, the parties most likely to incur the costs of implementation. They would no longer, however, be able to turn a blind eye to the wrongdoing that occurs with the electronic tools that they provide. Finally, as contemplated by the New gTLD Applicant Guidebook, the GAC’s recommendations are entitled to great deference by the ICANN Board. The recommended additional safeguards should be the subject of further consultations so that the Board can, as may be necessary, clarify the language of the additional safeguards and, absent compelling reasons to the contrary, adopt the fully developed safeguards. Conclusion Recognizing that some clarification of the specific requirements is needed, NCTA supports all of the GAC’s recommended safeguards for the new gTLDs, including the proposals that: * registry operators must identify domain names with false or missing WHOIS information; * registrars must seek accurate and correct WHOIS information; * registry operators have mechanisms in place to receive complaints about fraudulent or illegal activities associated with domain names in their registries; and * registry operators impose “real and immediate consequences” on registrants providing inaccurate WHOIS information or engage in unlawful activity. As a practical matter, the requirement that such consequences shall, at a minimum, include suspension of the domain name may result in only suspensions being imposed. Even so, unlawful or fraudulent activities will be terminated much more quickly, at a much lower cost and without shifting the costs to the victims of domain name abuse. We hope that, at the end of its consultation with the GAC on the recommendations contained in the GAC Communique, the Board is able to adopt clear safeguards that are consistent with the GAC Principles Regarding New gTLDs. We believe it is possible for the Board to balance the desire to enhance safeguards for the public, including trademark owners, with the desire for a predictable process for new gTLD applicants. Respectfully submitted, /s/ Jill Luckett Senior Vice President, Program Network Policy National Cable & Telecommunications Association 25 Massachusetts Avenue, N.W. Suite 100 Washington, D.C. 20001-1431 www.ncta.com<http://www.ncta.com> May 14, 2013 Counsel: Mitchell H. Stabbe Edwards Wildman Palmer LLP 1255-23rd Street, N.W. Eighth Floor Washington, D.C. 20037 (202) 478-7378 (p) (866) 320-9766 (f) www.edwardswildman.com<http://www.edwardswildman.com> mstabbe@xxxxxxxxxxxxxxxxxx<mailto:mstabbe@xxxxxxxxxxxxxxxxxx> ________________________________  NCTA notes that certain of our members have applied to operate new .brand gTLDs. Closed top level domains that are brands may not pose the same risks to consumers that unrestricted generic term gTLDs do. _______________________ Edwards Wildman Palmer LLP has offices in Boston, Chicago, Hartford, Hong Kong, London, Los Angeles, Madison NJ, Miami, New York, Orange County, Providence, Stamford, Tokyo, Washington DC and West Palm Beach. For more information visit edwardswildman.com. CONFIDENTIALITY NOTICE This e-mail message from Edwards Wildman Palmer LLP, Edwards Wildman Palmer UK LLP and Edwards Wildman Palmer, a Hong Kong firm of solicitors, is intended only for the individual or entity to which it is addressed. This e-mail may contain information that is privileged, confidential and exempt from disclosure under applicable law. If you are not the intended recipient, you are hereby notified that any dissemination, distribution or copying of this communication is strictly prohibited. If you received this e-mail by accident, please notify the sender immediately and destroy this e-mail and all copies of it. We take steps to protect against viruses but advise you to carry out your own checks and precautions as we accept no liability for any which remain. We may monitor emails sent to and from our server(s) to ensure regulatory compliance to protect our clients and business. Edwards Wildman Palmer UK LLP is a limited liability partnership registered in England (registered number OC333092) and is authorised and regulated by the Solicitors Regulation Authority (SRA) and operates an SRA standard complaints procedure (http://www.edwardswildman.com/complaintsprocedure). A list of members' names and their professional qualifications may be inspected at our registered office, Dashwood, 69 Old Broad Street, London EC2M 1QS, UK, telephone +44 207 583 4055. Disclosure Under U.S. IRS Circular 230: Edwards Wildman Palmer LLP informs you that any tax advice contained in this communication, including any attachments, was not intended or written to be used, and cannot be used, for the purpose of avoiding federal tax related penalties or promoting, marketing or recommending to another party any transaction or matter addressed herein.
20065593_3-NCTA Comments on GAC Recommended Safeguards.DOC