Comments on New gTLDS

[mheltzer@xxxxxxxx]

Comments from: Michael Heltzer
        Title: Secretary
 Organization: Intellectual Property Constituency


  1.  After reading the Initial Report, are there any other selection criteria
  which may be helpful for a new top level domain application round?

The IPC is generally satisfied with the selection criteria listed in the
initial report, especially the requirement that applicants (1) comply with
ICANN consensus policies, (2) offer a clearly differentiated domain name space
with mechanisms in place to ensure compliance with the purpose of a chartered
or sponsored TLD and to address domain name registration violations, and (3)
show that they have the financial and operational resources to execute their
plans.  As we noted previously, market differentiation will create a taxonomic
or directory-style domain name structure, ensuring that certainty and
confidence are part of the user experience and that registrants will find a
unique name space where they want to be and in which they can easily be
located.   While the IPC believes the list of selection criteria is complete,
it urges ICANN to ensure that its review of applications continues to be
vigorous such that applicants are held to a high standard of establishing that
they meet the selection criteria.


  2.  Thinking about the issue of application fees for any new top level domain
  application, is there merit in graduated application fees to assist
  applicants?

The IPC does not object per se to the use of a graduated fee structure; but is
skeptical that the positive effect of a reduced application fee (i.e., more
competition among applicants) will outweigh the negative impact of an
underfunded applicant?s inability to meet the selection criteria set forth
above.  As a result, we strongly recommend that any graduated fee structure be
viable and significant enough to ensure compliance with the selection criteria
set forth above, as well as eliminate bad-faith actors who might seek to pay a
minimal entry fee and then conduct unscrupulous activities (e.g.,
cybersquatting, which would be aided through a registry?s access to the root).


  3.  Taking into account the experiences from the 2000 and 2004 round of new
  top level domains, do you have further comments to make about streamlining
  the application process?

The IPC is open to considering the streamlining of the application process, but
will withhold final comment until presented with a specific proposal.  We urge
caution, however, in presenting any proposal that would eliminate those aspects
of the gTLD application process that provide for the security and stability of
the DNS.  Included in this concept are not only technical matters, but those
aspects of the Internet DNS and registry operation that are designed to
safeguard users and the general public, including, for example, the examination
of proposals to protect intellectual property.


  4.  Thinking about ICANN's responsibility to ensure competition in registry
  services operation, do you have any additional comments about how to
  encourage applications which would serve needs which are not met by the
  existing top level domains?

The IPC does not believe that ICANN needs to encourage applications that would
serve needs not met by the existing top level domains.  Instead, we believe
that the market-driven approach we suggest in response to Question 1, along
with the popularity of the Internet, has and will continue to motivate
applicants to approach ICANN.  Without such marketplace support, the motivation
for registering any such new TLD will be primarily for defensive purposes (as
has largely been the case with .info and .biz), which provides no value to
consumers and which unnecessarily drains ICANN?s already limited resources.


  5.  Looking closely at the technical selection criteria section of the
  Report, are there any further comments which would assist with identifying
  appropriate base line technical criteria for new applications?

The IPC has no additional comments in response to this question.


  6.  Do you have any further comment to make on the use of the first come
  first served system for processing applications and then whether auctions or
  lotteries are appropriate ways of resolving competition between applications?

As stated in our January response, ?Based on experience with the ?land rush?
effect in domain name registration, it is apparent that first-come first-served
simply does not work when many valid applications are received at the same
time.?  Instead, we endorse the use of comparative evaluation methods to
allocate new gTLDs.

We strongly advise against the use of auctions or lotteries to resolve
competition between applicants. As we explained previously, ?The selection of a
new gTLD is an important decision with far-reaching consequences.  Swiftness in
the process is not a particularly critical criterion for success.  ICANN should
not leave the allocation process to chance.?  We refer the GNSO to our comments
made earlier on the problems associated with auctions and lotteries:

? How to control for dominance?  If slots are auctioned among bidders who met
the selection process, the playing field would be tilted toward the
best-financed prospective registries and would disadvantage prospective
registries that met the financial selection criteria but did not have the
deepest pockets.

? How to control for bias?  Similarly, if the gTLDs were proposed by the first
potential registry and then bid on by others, the latter bidders would be
handicapped regarding preparedness and their ability to calculate an
appropriate bid ? in essence, they would be betting against the ?house.? 

? Does the auction process add value?  An auction model has no inherent ability
to add value, and leaves ICANN open to criticisms regarding profiteering.
 
? Could an auction become a lottery?   Auctions have the potential, depending
on how they are structured and what is auctioned, to become lotteries, and
lotteries are highly regulated - if not entirely prohibited - in many
countries.

? Would ?market hype? distort the market?  If prospective bidders grossly
overbid due to hype, this could undermine the winners? finances, create
unrealistic expectations regarding return on investment, and ultimately hamper
the ability to operate and succeed with the new gTLD.


  7.  Do you have any further views on the kinds of new TLDs that might be
  encouraged? Specifically, do members of the community expect the existing
  differentiation between sponsored, generic, chartered and open TLDs to
  remain?
  

As previously noted, the IPC encourages new TLDs that are focused on
communities that can be defined in absolute terms, and specifically tailored to
a discrete and identifiable group of Internet users.  These types of TLDs have
traditionally been referred to as ?sponsored.?  Whatever they are called, their
rules and regulations, particularly for eligibility, must be clearly defined
and strictly enforced.  In addition, ICANN must regularly monitor and evaluate
the enforcement activities of the registries to ensure that the sponsored TLD
does not de facto become an otherwise ?open? TLD.