Comments of the Internet Commerce Association

[Phil Corwin <pcorwin@xxxxxxxxxxxxxxxxxx>]

BUTERA & ANDREWS
Attorneys at Law
1301 Pennsylvania Avenue, N.W.
Washington, D.C. 20004-1701
202-347-6875
Philip S. Corwin, Partner
pcorwin@xxxxxxxxxxxxxxxxxx<mailto:pcorwin@xxxxxxxxxxxxxxxxxx>


By E-Mail

March 26, 2008

Board of Directors
Internet Corporation for Assigned Names and Numbers (ICANN)
4676 Admiralty Way, Suite 330
Marina del Rey, CA 90292-6601

Re: Registry Policies on Domain Tasting

Dear Members of the ICANN Board:

This comment letter is submitted by the Internet Commerce Association (ICA) in 
regard to two interrelated items:

 1.  The February 27, 2008 notice opening a comment period on proposals by 
Neustar (for .Biz) and Afilias (For .Info) to modify the terms of their add 
grace period (AGP) policy.
 2.  The March 6 Domain Name Tasting Motion posted for comment by the GNSO 
Council.

As both items propose an identical policy – limiting the number of monthly 
domain name deletions during the AGP for which a registrar could receive a full 
registration fee credit each month to 50 per month or 10% of that registrar’s 
net monthly domain name registrations, whichever is greater – we are filing a 
single combined comment letter applicable to both. We do note that the GNSO 
Council resolution would establish a process by which registrars could seek an 
exemption from the application of the restriction upon a documented showing of 
“extraordinary circumstances”, and that each gTLD registry operator would be 
required to report to ICANN all such registrars seeking an exemption and what 
action was taken in regard to such request.

ICA is a not-for-profit trade association representing the direct search 
industry. Its membership is composed of individuals and companies that invest 
in domain names (DNs) and develop and monetize the associated websites. ICA’s 
members collectively hold portfolios comprised of tens of millions of DNs. 
Domain name investors and developers are the new media and e-commerce companies 
of the twenty-first century, with the current asset value of the direct search 
industry standing in excess of $10 billion and with these assets generating at 
least $1-2 billion in annual advertising revenues and associated e-commerce 
transactions. ICA’s mission is to promote the benefits of the activities of 
professional domain name investors, owners and developers to the press, 
advertisers, and governmental authorities on a global basis; and to strive for 
fairness among regulators and in ICANN’s dispute resolution process as well as 
in the taxation and treatment of DN registrants under all relevant laws, 
regulations, and agreements in the U.S. and other nations. ICA provides a 
unified voice for a membership with common interests and a diverse collection 
of experience in the professional domain name ownership community. The 
community represented by ICA has risked large amounts of capital in order to 
develop domain names. Professional domain name registrants are a major source 
of the fees that support registrars, registries, and ICANN itself.

Background -- General ICA Position on Domain Name Tasting

As stated in our January 28, 2008 letter to the Board in regard to the GNSO’s 
Initial Report on Domain Tasting:

The ICA believes that abusive domain tasting is an unintended and insupportable 
misuse of the add/grace period and should be ended. Because the practice of 
domain tasting is an economic phenomenon based upon the fact that thousands of 
names can be registered for a short term at no cost we believe that the best 
means of curbing abusive tasting is to impose a price that is minimal for a 
single or small group of domain names but substantial for thousands of test 
registrations. The imposition of a nominal non-refundable registration fee by 
ICANN, perhaps enhanced by individual actions by TLD registries, should be 
tried and evaluated before taking the more radical step of totally eliminating 
the add/grace period.

This was not a new position for our Association. On March 15, 2007 we submitted 
a comment letter (http://forum.icann.org/lists/registryservice/msg00000.html) 
in support of the PIR proposal to impose an “Excess Deletion Fee”. As we stated 
at that time:


The ICA supports adoption of the Excess Deletions Fee proposed by the Public 
Interest Registry (PIR) for .org domain names. This new policy would impose a 
"restocking fee" of $.05 (5 cents) for registrations deleted during the five 
day add/drop grace period when the percentage of such deletions by any single 
registrar exceeds ninety percent of the initial registrations made within a 
calendar month.



The ICA recognizes that repetitive mass registration of domain names (DNs) for 
the purpose of determining their pay per click (PPC) advertising viability 
(know as "domain tasting") can lead to abuse of the five day grace period. In 
particular, the ICA opposes "domain kiting", in which particular DNs are 
registered and deleted for sequential five day periods within the registry's 
add/drop grace period, thereby allowing for de facto DN ownership absent its 
cost. We believe that the PIR proposal is a reasonable policy designed to 
address such abuse and clearly demonstrates that individual registries can 
readily take action to address the legitimate concerns that have been raised by 
the practice of excessive DN "tasting".

That proposal was subsequently adopted and, as subsequently noted by the 
relevant GNSO Report, has resulted in a reduction of domain name deletions on 
.Org of more than 90 percent and a complete cessation of tasting by the two 
organizations most involved in abusive tasting.

In September 2007 the ICA’s Board adopted a member Code of Conduct 
(http://www.internetcommerce.org/member_code_of_conduct). That Code addresses 
domain name tasting and related issues addressed in the subject GNSO Report as 
follows:


The Internet Commerce Association’s (ICA) Member Code of Conduct expresses the 
ICA’s recognition of the responsibilities of its members to the intellectual 
property, domain name, and at large Internet communities and will guide members 
in conducting their domain name investment and development activities with 
professionalism, respect and integrity.

All members of ICA are committed to addressing the issues facing the evolving 
domain name industry, which include:

Protection of Intellectual Property Rights:  A registrant shall follow accepted 
trademark law and respect the brands and trademarks of others. Members will not 
intentionally and in bad faith register and use a domain name that is identical 
or confusingly similar to a trademark or service mark.  Registrants shall 
respond promptly to legitimate disputes relating to alleged infringement of 
intellectual property rights.

Domain Name Tasting: Members should be supportive of changes in ICANN policy or 
self-driven registry initiatives that end abusive domain name tasting, 
including such market-based approaches as a restocking fee.  All activity 
related to domain name registration should respect all other areas of the Code 
of Conduct, most notably including protection of intellectual property rights.

Domain Name Kiting: A registrant has the responsibility to pay the registration 
cost of a domain name when used beyond the applicable Add/Grace period.  A 
registrant should not abuse the applicable Add/Grace period by serially 
deleting and re-registering a domain name with the intent of avoiding payment 
for such registration and use, a process commonly referred to as “domain 
kiting.”

Strict Adherence to Internet Fraud Laws: Members of the ICA are committed to 
adhering to all applicable laws that seek to curb and control Internet fraud 
and abuse.  Cybersquatting, the practice of registering and reserving an 
Internet domain name for the purpose of reselling it to the rightful owner at 
an inflated price, is condemned; as are practices such as phishing, which is 
the process of attempting to obtain the personal information of unsuspecting 
Internet users for illicit purposes.

Finally, during the November 1, 2007 Public Forum session at the ICANN Meeting 
held in Los Angeles, I delivered the following oral remarks on this subject 
(http://losangeles2007.icann.org/files/losangeles/LA-PublicForum2-1NOV07.txt):

>>PHILIP CORWIN:   Yes, good afternoon.  Philip Corwin, Counsel to the
Internet Commerce Association, representing domain name investors and
developers.

I would like to start by expressing the appreciation of our membership
to Dr. Cerf for his vision and dedication in helping to create and
guide the development of this very incredible and transformative
technology that we call the Internet.  And thank you, Vint.

Briefly, I will address four key issues for our members, but first is
domain name tasting.  Last month our year-old trade group adopted a
formal member code of conduct which opposes abusive domain name tasting
and calls for the eradication of domain name kiting.

We are pleased that the GNSO approved a PDP on this subject and called
on ICANN to consider immediate fee-based steps to eliminate abusive
tasting.  And we would go beyond that and call on the registries to
consider using the dot org action as a model for steps that they might
take to address tasting at their individual top-level domains.

Thus, in keeping with our Code of Conduct and our prior statements to ICANN on 
this matter, we enthusiastically support the expeditious adoption of economic 
measures by ICANN and individual gTLD registries to curb abusive domain name 
tasting by imposing a meaningful cost on misuse of the add/grace period.

Position on the Neustar and Afilias Proposals

Consistent with our prior positions on the issue of domain tasting, we support 
individual efforts by gTLD registries to curb abusive domain tasting and 
therefore have no objection to these proposals.

To some extent the separate gTLDs compete against one another and the 
marketplace will tend to curb the adoption of unreasonable policies. However, 
we are concerned that there appears to be a lack of empirical justification for 
the precise policies they seek to have approved. In this regard, we would note 
that the policy which we supported one year ago and that was subsequently 
implemented by PIR for .Org resulted in the near-cessation of all abusive 
tasting at that gTLD through the imposition of a nominal five cent fee on 
excess deletions, defined as more than ninety percent in a given month. By way 
of contrast the present proposals would permit these gTLD registries to retain 
the entire registration fee for deletions in excess of ten percent per month. 
We believe that the ICANN Board should inquire as to the method by which this 
proposed policy was arrived at and determine whether it is reasonable and fair 
to registrants prior to modification of the relevant registry contracts to 
accommodate it.

Position on the Draft GNSO Domain Name Tasting Motion

At this time we oppose adoption of any final GNSO Motion relevant to domain 
name tasting because such action would be premature. In addition, we cannot 
support action by the ICANN Board to impose a single anti-tasting policy on all 
gTLD registry operators that provide for an AGP because such a “one size fits 
all” policy discourages registry experimentation and incorrectly presumes that 
the conditions at each registry are essentially identical and that a single 
approach to curb tasting will have the same effect across all registries.

Adoption of a GNSO Motion on domain tasting is premature for two reasons:

1.      Public comments and constituency impact statements regarding the 
February 8, 2008 GNSO Draft Final Report on Domain Tasting are still being 
considered by the Council for further incorporation into a further draft that 
is being readied for Council consideration at its scheduled meeting of April 
17, 2008. Given that the Council has yet to issue a Final Report on Domain 
Tasting and that the ICANN community has not yet had an opportunity to review 
and evaluate that Final Report it is clearly premature for the GNSO to adopt a 
Domain Name Tasting Motion that urges action by the ICANN Board.

2.      At its meeting last month in New Delhi the ICANN Board indicated that 
it was actively considering adoption within the ICANN budget for the coming 
year of a change in policy that would impose its 20 cent registration fee on 
all names registered with any gTLD, including those names deleted during the 
AGP. It is widely anticipated that the Board will adopt this proposal at the 
June 2008 meeting in Paris and. We believe that such adoption would largely 
eradicate abusive tasting across all gTLDs and that no further action should be 
taken by the Board on this subject until this non-refundable fee has been 
implemented within the ICANN budget and its effect evaluated after a meaningful 
interval.

In addition, Board imposition of a uniform “excess deletion” approach towards 
curbing abusive tasting at all gTLDs would prevent experimentation by the 
individual registries to find the approach best suited to their particular 
conditions. For example, while the PIR approach has been highly effective at 
.Org a different approach might well be required of VeriSign to curb abusive 
tasting at .Com. Further, the only means by which a gTLD registry operator in 
disagreement with the imposition of such a “one size fits all” policy could 
avoid its imposition would be to terminate its AGP entirely. While that result 
has been publicly advocated by some trademark interests we believe it would be 
extreme and against the interests of the average registrant.

Conclusion

The ICA appreciates the opportunity to comment on the subject proposals and 
Motion. We look forward to reviewing the GNSO’s Final Report on Domain Tasting 
when it is made available this Spring.
Sincerely,
Philip S. Corwin
Counsel to the Internet Commerce Association