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EOI comment

  • To: "eoi-new-gtlds@xxxxxxxxx" <eoi-new-gtlds@xxxxxxxxx>
  • Subject: EOI comment
  • From: Nathan Freeman <natefreeman@xxxxxxxxx>
  • Date: Tue, 1 Dec 2009 01:51:36 -0500

As one who has only recently discovered ICANN's sustained effort to create
gTLDs I would like to participate in the public comment period regarding
EOIs.  At this time I have no stake in a gTLD venture, however I believe my
comments may help provide a useful, outside perspective in the public
comment period.

Before I begin, I would like to reference Micheal Palage's excellent
commentary, "New gTLD Expressions of Interest:  Proceed with
reviewing many public comments, it is clear that Mr. Palage has identified a
disturbing trend of opinion that supports high fees and front running of
gTLD applications by those with vested interests in specific strings.  In my
opinion, ICANN should consider the likelihood of spoiling gTLD development
before it gets off the ground.  While it is true
that successful entrepreneurs seek early positions in new business
opportunities, the effect of front running applications will create the
appearance of, frankly, a sham operation, particularly by major players in
various industries currently unaware of gTLD development.  The assumption
that only prospective EOI participants represent, "serious
the range of private businesses, precludes the reality that gTLD
development is widely known and understood by serious players.

A specific example is the potential front running of the .Music string.
 Should ICANN offer first round application opportunities exclusively to EOI
participants, it is very likely that a variety of major players would bring
litigation against ICANN for unfair practices.  Major players that would vie
for .Music, should they be aware of gTLD developments, might include major
labels, retailers and artist organizations.  Sony, Warner Bros., Columbia,
RCA, Apple/iTunes, ASCAP and a host of other parties with certain interest
in the .Music string would likely conclude that the gTLD market to be
illegitimate due to front running schemes.

With these initial thoughts in mind I would like to offer the following

1.  How do we ensure that participation in the EOI accurately represents the
level of interest?

In order to ensure the EOI accurately represents the level of interest,
ICANN would have to conduct traditional market research and outreach various
industries and interest groups.  A small pool of EOI participants will
create skewed results and only reflect the level of interest of gTLDs by
parties following the work of ICANN in particular.

2.  Should only those who participate in the EOI be eligible to participate
in the first round when the program officially launches?

No.  As stated above, front running by EOI participants would make the gTLD
market illegitimate in the eyes of excluded applicants.

3.  Should a deposit be required for participation in the EOI?

I would like to reiterate Michael Palage's comments Section III., Framework
for Discussion, in his commentary, "New gTLD Expressions of Interest:
 Proceed with Caution."  I agree full heartedly in his observation that a
five or six-figure EOI fee would exclude parties that do not focus on TLDs
as a part of their core business, those averse to risk of speculation on a
preliminary basis as well as those from international and small market
economies that have fewer resources and the added burden of lower currency
values than the currency required for application.  Mr. Palage also provides
the history of EOI fees such that arbitrary requirements of $25,000,
$50,000, $135,000, etc, would represent a radical departure in the level of
fees from precedence of prior EOIs.  Excessive fees will limit the pool of
EOI participants which would, as stated above, skew the accuracy indicating
level of interest in gTLDs.  Conversely, a nominal fee of $100 to $250 would
allow the opportunity for vibrant, creative speculation by start up
companies and entrepreneurs who may wish to test the waters before jumping
in.  A nominal fee would be similar to a state application to register a
corporation, non-profit, LLC or trade name as the foundation for serious

4.  If there is a fee, under what circumstances should there be refund?

If there is a fee, it should be nominal and non-refundable.

5.  What information should be collected from EOI participants?

   - 5.1  What subset of applicant questions found in the Applicant
   Guidebook at
   be answered?
   - Questions 1, 6 and 13.  Keep it simple.

   - 5.2  Including applied-for strings?
   - Yes.
   - 5.3  Should information be made public?
   - Yes.  This would reduce unnecessary competition caused by blind
   applications.  If the information is made public, applicants can assess the
   possibilities of creative name variants or other marketing/branding
   strategies and avoid wasted time and effort in competition with another
   applicant that has greater resources or other advantages that would be
   futile to challenge.  Public information would reduce unnecessary auctions.

6.  Must the responder commit to go live within a certain time of

No.  It will be in the applicant's interest to go live as soon as possible
anyway so there is no need to constrict the timeline to go live.  The
variety of applicants will each face unique obstacles as an organic process
of a start up or rebranding venture.  Requiring a designated timeline does
not allow for unforeseen or necessary activities among unique ventures, such
as a need to recapitalize from a start up to mezzanine funding.  Considering
the risk, work and fees required for successful delegation of a gTLD, ICANN
should be able to presume that the applicant has a vested interest to go
live as soon as possible.  Besides, what would be the purpose of a
structured timeline?  ICANN cannot force a rapid roll out of gTLDs.  The
ventures in various zones will self-create organically and the market will
weed and grow the crop.

7.  What are the implications for potential changes to the Applicant
Guidebook after the EOI participation period closes?

Changes to the Applicant Guidebook would create further delay.  Stepping
back for a moment, it may be a good idea to review the intended purpose of
 the EOI proposal.  Is the intent to discover the level of interest in the
formation of gTLDs or is it to hone the AG?  Obviously, the EOI process may
unveil issues that might require changes in the AG.  However, it may be a
mistake to anticipate changes in the AG.  This may lead to mission creep and
an organizational subtext that the AG should be further revised as if this
was an original purpose of the EOI proposal.

8.  What are the potential risks associated with the EOI?

As suggested above, one potential risk of an EOI that allows front running
opportunities is the likelihood of litigation against ICANN and the party or
parties that secure an unfair advantage in the application process.  Another
risk is the delay to market extending past recent and current timelines for
the application period.  Applicants and service providers recognize gTLDs as
a long term investment, yet a series of delays can create uncertainty and
anxiety among investors which could then trickle down to dwindling resources
among applicants and service providers.

As a concluding thought, I would like to point out that the phrase,
"overarching issues," often used in the gTLD discussions should be clarified
as much as possible or at least referenced with an appropriate link.  Having
only recently discovered ICANN's development of gTLDs, I am uncertain as to
what overarching issues may impact the AG, application timeline, viability
of the gTLD marketplace or potential applicants.  Clarification on the
overarching issues would certainly provide vital information to applicants
and possibly diminish unnecessary uncertainty.

Thank you for your consideration of these comments.  I look forward to
overall success in the emerging gTLD marketplace.

Nate Freeman
109 VT RTE 12A
Northfield, VT 05663
(802) 485-4428

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