New gTLDs Program – Comments on GAC Recommended Safeguards [ED-01.FID2408216]

["Stabbe, Mitchell" <MStabbe@xxxxxxxxxxxxxxxxxx>]

[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.[1]
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>
 § 1.1.2.7 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>


________________________________

[1] 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.

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Attachment: 20065593_3-NCTA Comments on GAC Recommended Safeguards.DOC
Description: 20065593_3-NCTA Comments on GAC Recommended Safeguards.DOC