IntroductionThis Critique of the JVTeam’s proposal is a statement on behalf of
the competing Affinity Internet, Inc/ bizTRAC team.
We maintain that the JVTeam
application for the .biz TLD is incomplete and unworkable and should therefore be
rejected. Further if the application is approved we see the results as being, for
the reasons stated below, just as if another unrestricted “.com” was created with
all the cyberhoarding, cybersquatting and domain name speculation problems which
that implies.
Specifically the application has the following problems and omissions:
(1) The
JVTeam Application is Incomplete – No Charter is Included
(2) A “loose” Charter
would be very difficult to use as the basis for determining arbitration disputes.
(3) A
“tight” Charter would not meet desirable objectives.
(4) It would be very difficult
for a potential complainant to know whether a given site did or did not infringe
the Charter. Therefore many registrations violating the Charter would remain unchallenged.
(5) This
means that the Charter would have no “teeth”. This, together with the low cost of
registration, would encourage frivolous registrations. This would turn the new TLD
into another “.com.”
(6) A loose Charter would be “an invitation to litigation”
by those who can afford it.
(7) This is a proposal for an “unsponsored restricted
TLD”. As such, the proposal has no mechanism for reflecting the interests of the
effected constituencies.
(8) It is doubtful whether the JVTeam has created a viable
business plan.
These points are explained in detail below.
JVTeam’s Approach
JVTeam
use the basic premise that UDRP should be extended to cover instances where an individual
registers an SLD but where the registration does not conform to the “Charter” for
that TLD. Their idea is that improper registrations will then be deterred by
the possibility of arbitration and that if such registrations do occur they can be
reversed through the arbitration process.
The UDRP has been shown to have many
benefits (and we also support an extended version of this policy) for trademark disputes.
We believe, however, that their application is incomplete and, that if they were
to complete it, the un-workability of their approach would become apparent. We assert
this for the following reasons:
(1) The JVTeam Application is Incomplete – No Charter
is Included
JVTeam has put together a detailed “Description of TLD Policies” of
close to 50 pages. However nowhere within that document are their polices truly given.
They state that a complainant will be able to challenge a registration through the
arbitration process if the registration “failed to meet the criteria set forth in
the applicable Rules Of Eligibility For Restricted TLD (the applicable “TLD Charter”)”.
However, nowhere do they give details of what this Charter will actually contain.
The Charter IS effectively the rules of management of the TLD and should therefore
be the heart of a proposal for a restricted TLD . Differences in the Charter would
very markedly affect the workings and the value of the proposed TLD. As the Charter
is not presented we therefore assert that the application is materially incomplete.
Prior to posting this analysis we requested (on this notice board) that JVTeam
should present the proposed Charter for this TLD and received no response. We conjecture
that the JVTeam did not explicitly present a Charter, or respond to our request,
because of the intrinsic difficulties of this approach and the fact that any proposed
form of Charter could be easily challenged. Specifically:
(2) A “loose” Charter
would be very difficult to use as the basis for determining arbitration disputes.
In
their application the JVTeam makes only two statements which hint as to what the
Charter might contain:
(i) “The TLD shall be restricted to any individual, organization,
or entity that desires to advertise their business and/or conduct commercial activities
on the Internet.”
(ii) The registrant will be required to state that “the name
is reasonably related to the registrant’s business, and that the domain name will
be used for commercial purposes only”
These statements are contradictory as the
first one talks about “desire”, which seems to imply that it would be O.K. to register
a domain before I have a business up and running. The second statement would seem
to imply that the registrant needs to be already engaged in business. In either case,
if the Charter were indeed to be worded in these “loose” terms it would be almost
impossible for an arbitrator to determine the merits of any given case. If I were
to buy “flowers.biz” I could legitimately claim that I “desire” to set up an on-line
flower service. Just because I don’t get round to it (and the site remains inactive)
by the time a complainant challenges my registration, doesn’t mean that my desire
wasn’t genuine. Even if I offered to sell the name to a potential buyer (which has
been used in some arbitration cases as evidence of bad faith) I would be hard to
show that I did not initially “desire” to really establish a business.
If the second
statement “reasonably related etc” is used as the basis of the Charter then this
would make it impossible for a business just in the idea stage to register a name.
This could of course be changed to “reasonably related to the registrants intended
business etc”. However the problems would then be the same as with statement (i).
In any case even the “reasonably related” criteria as stated would be very difficult
to decide fairly in most arbitration cases.
A prospective complainant would
therefore be faced with an impossible task, when deciding whether to pursue arbitration
proceedings, of trying to determine if a certain domain is or is not “reasonably
related to the business” of another company which might be privately held and might
be in another country or even on another continent.
The point is that where is
relatively easy to determine whether there was bad faith in a trademark infringement
case (and even this is not always easy) it is impossible to effectively determine
whether someone intended or desired at the time of registration to use a given registration
“for business purposes”, such desires or intentions are not therefore the appropriate
subject for an arbitration dispute.
(3) A “tight” Charter would not meet
desirable objectives.
There are many forms of tightly controlled Charter for which
arbitration could be used. For example it would be possible to specify a Charter
that required that a web site name could only be the same as the name of an existing
registered trademark, or of an existing business with a certain level of revenues,
and so on. Using this type “tight” Charter it would be relatively easy to determine
whether a given registration did or did not infringe the rules. However this type
of tight charter would not allow for the participation of start-up business. In many
cases being able to “lock in” an appropriate name is a vital step in setting up a
new business on the web and a Charter restricted to existing businesses would therefore
fail to provide an important element necessary for a new domain.
(4) It would
be very difficult for a potential complainant to know whether a given site did or
did not infringe the Charter. Therefore many registrations violating the Charter
would remain unchallenged.
It is relatively easy to determine whether someone has
infringed my trademark or is using a site in bad faith to try to capture some for
my business. However, it is close to impossible in many cases to determine (without
hiring a private investigator) whether a given SLD is closely “related to the registrant’s
business”. It is completely impossible to determine whether the registrant “desires”
to engage in a business activity related to that name.
Even if a “tight” Charter
were specified it would be impossible for a complainant to know, without considerable
investigation, whether the registrant of a given site did or did note meet the specified
criteria at the time of registration.
For these reasons in many cases a potential
complainant would chose to avoid the costs of investigation and arbitration and many
(if not most) registrations violating the Charter would be likely to go unchallenged
(5)
This means that the Charter would have no “teeth”. This, together with the low cost
of registration, would encourage frivolous registrations. This would turn the new
TLD into another “.com.”
As the application cost under the JVTeam Proposal
is likely to be less than $30 per year and it would be very difficult to prove Charter
Infringement, many people will register names either with the intention of speculating
and selling them, or with vague or uncertain plans to set up a business at a future
date. In other words the problems of cyber hoarding and domain name speculation are
likely to be as bad as they are for the .com space where far less than 30% of names
registered are being actively used.
(6) A loose Charter would be “an invitation
to litigation” by those who can afford it.
Arbitration is not costless. Although
the proceedings themselves are relatively cheap, in a “loose” Charter environment
there would be a big advantage to hiring legal services to challenge or defend a
given registration. This would give large companies with deep pockets trying to win
or defend a name a big advantage over small businesses.
(7) This is a proposal
for an “unsponsored restricted TLD”. As such, the proposal has no mechanism for reflecting
the interests of the effected constituencies.
In the “New TLD Application Instructions”
ICANN clearly states that “because restricted TLDs require definition and implementation
of policies concerning naming restrictions, which are most appropriately addressed
by subsets of the global Internet community, proposals for restricted TLDs should
ordinarily provide for a sponsoring organization”.
The need for a sponsoring organization
is clear in the case of a .biz TLD. Several constituencies will have an interest
in the policies used to run the TLD. Among others these are: the business community,
the registrar community, the intellectual property community, the consumer community
and so on. It may take several iterations before a set of policies is developed which
adequately reflects the concerns and interests of these groups. In addition, it should
be possible to modify policies on an ongoing basis to meet the needs of these constituencies.
The sponsoring organization provides a mechanism whereby the views and requirements
of those that are served by the TLD may be transformed into policy.
The JVTeam
proposal has no sponsoring organization and therefore has no mechanism by which this
can be achieved.
(8) It is doubtful whether the JVTeam has created a viable business
plan.
JVTeam’s plan for the .biz registry specifies that their operation will
lose money for the first four years. They project losses of approximately $20MM in
the fourth year of operations under their expected scenario. It is impossible to
predict what other registries will be created or how technology will change over
this period and it is certainly impossible to say with certainty that there will
still be a place for a .biz registry at the levels of demand projected 8 or 10 years
from now. It may therefore be difficult for JVTeam to maintain commitment to this
project in the long term if the revenues don’t turn around, as they foresee, after
year 4 or if it becomes apparent before that time that they will not do so.