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Industry Comments to the New ICANN gTLD Program and Process

  • To: <gtld-guide@xxxxxxxxx>
  • Subject: Industry Comments to the New ICANN gTLD Program and Process
  • From: "Marc-Anthony Signorino" <MSignorino@xxxxxxx>
  • Date: Mon, 15 Dec 2008 17:57:28 -0500

To:                   ICANN (gtld-guide@xxxxxxxxx
<file:///F:\ICANN\gtld-guide@xxxxxxxxx> )
Re:                   Industry Comments to the New GTLD Program and

Date:                December 15 , 2008

Dear Dr. Twomey and Mr. Dengate Thrush: 

The undersigned corporations, trade associations and business groups,
representing thousands of multi-national companies and millions of
employees and Internet users, submit these comments related to the Draft
Applicant Guidebook and the new generic Top Level Domain (gTLD) program.

Since the inception of the Internet, the global economy has thrived
thanks to the World Wide Web's ability to bring businesses and consumers
together to engage in eCommerce in a manner that is increasingly more
safe and secure.  The stability of the Internet as a global platform for
eCommerce is a core concern for businesses world-wide, and we look
forward to working with ICANN to ensure this stability, especially in
these times of great economic uncertainty.  We submit these comments to
you in light of this commitment.


Executive Summary


ICANN's decision to increase the number of gTLDs has brought a number of
issues to the attention of the international business community, and we
would like to take this opportunity to address them.  Most
significantly, our concerns lie in three significant areas: 

*       Protecting consumers across the new gTLDs;
*       Protecting brand-owners across the new gTLDs; and
*       The effect of the new gTLD program on ICANN and the Internet.


Our comments below highlight these three areas.  We suggest that before
ICANN proceeds with the new gTLD Program and Process, it should:

*       Undertake the full economic study of the domain name marketplace
mandated by the ICANN Board in 2007, as well as an extensive evaluation
of whether new gTLDs are needed in the first place given the record of
existing new gTLDs;
*       Establish criteria for success of new gTLDs in the proposed
first round - including Internationalized Domain Name (IDN) TLDs -
before moving forward;
*       Modify the roll-out of the new gTLD program to only sponsored
gTLDs and a limited number of IDN TLDs once the study has been completed
and criteria established; and
*       Limit further roll-out until sufficient safeguards are in place
to protect Internet users, businesses, and brand-owners alike from any
existing and expected acts of cyber-fraud. 

Until these issues and recommendations can be adequately addressed, we
respectfully request that ICANN delay the launch of the new gTLD


Protecting Consumer Across the New gTLDs


It can be said that the Internet exists for its users, as well as
because of its users.  Protecting them from harm is incredibly important
not only for their sake, but also for the sake of all who create
content, do business and facilitate the Internet's day-to-day operations
on the network.


Preventing Consumer Confusion   


ICANN has announced its intention to move forward with plans for
creating a considerable number of new generic TLDs, including IDNs. One
justification ICANN has noted for this is to introduce 'competition'
into the domain name system (DNS).   Currently, there are over 240 top
level registry strings (known as top level domains or TLDs) that include
generic names (gTLDs) such as .com, .net; .info; .biz; .mobi; as well as
country-code TLDs (ccTLDs), such as .us, .uk, .it, and .cn.  Today, in
these top level domains, over 175 million domain names already offer
significant choice and diversity to end registrants.  ICANN's proposed
approach to introducing further new TLDs could lead to the creation of
over 1,000 or more new gTLDs over the next three years.  This course of
action would significantly raise the risk of creating confusion in the
minds of consumers as to where on the Internet they can find a business
or their desired product.  By making it increasingly difficult for
consumers to enjoy their Internet experience, frustrated consumers would
be less likely to engage in eCommerce - in a time when many businesses
with online presences can ill afford reduced traffic.  


Protecting consumers against cyber-fraud


With the increased number of gTLDs, the opportunity for cyber-crime to
increase is significant.  By using domain names to exploit the trust
that consumers have in legitimate brands and trademarks, cyber-squatters
are able to harm consumers through creating confusion about which web
site is the legitimate brand-holders site that provide the goods or
services the user is seeking. Other serious problems exist when these
illegitimate sites are used for abusive purposes, such as sending
malware to infect a user's computers with viruses and software to steal
personal information, as well as through the sale of unwanted
counterfeit goods. 


The magnitude of the problem is shocking.  The overall number of domain
names under existing gTLDs has more than doubled since 2003, and the
growth of cyber-squatting has exceeded that pace.  According to
MarkMonitor's Brandjacking Index Report from Spring 2007,
cyber-squatting increased 248% in 2006.[1]  This is of significant
concern as cyber-squatting is a tool that criminals use in phishing
attacks against unsuspecting consumers.  A study released by Gartner,
Inc. in 2007 revealed that phishing attacks in the United States alone
cost Internet users over $3.2 billion. [2] The problem is growing, with
no signs of slowing down.  The survey found that 3.6 million adults lost
money in phishing attacks in the 12 months ending in August 2007, as
compared with 2.3 million the previous year.[3]  With the projected
number of new gTLDs created in the proposed program, the costs of fraud
to unsuspecting consumers will undoubtedly eclipse that figure.


ICANN's efforts must include consideration of the millions of Internet
users who use the World Wide Web to work, play and learn.  Strong
consumer protection starts with creating tools to thwart brand
infringement, so as to protect against such potential and probable
abuses in new gTLDs and in IDNs.


Protecting Brands Across the New gTLDs


There is great concern in the business community that ICANN has not
adopted adequate safeguards against systemic brand abuse in new gTLD
registrations (including both ASCII and non-ASCII (or IDN) TLDs) prior
to moving forward with the new gTLD Program.  The current system for
addressing brand abuse is the Uniform Domain Name Dispute Resolution
Policy (UDRP).  Currently, there are almost 250 TLDs available to
public, as well as to private and governmental institutions.  Trademark
owners are already compelled to engage in defensive registrations to
prevent phishing, fraud, and trademark infringement.  


As mentioned above, cyber-squatting is not only a problem that impacts
consumers and business.  The practice is estimated by the Coalition
Against Domain Name Abuse to cost brand owners worldwide over $1 Billion
dollars a year as a result of diverted traffic, the loss of hard-earned
trust and goodwill, and the increasing enforcement expense of protecting
consumers from Internet-based fraud.  Adding new gTLDs without adding
the proper tools to protect Internet users and brand owners will only
exacerbate and already out-of-control problem.


In sum, the ICANN proposal would vastly increase the costs associated
with defensive registrations and mark protection, which are already
extremely expensive for trademark owners, even where there are only a
finite number of TLDs.  We believe that, by adopting the following
recommendations, ICANN can strengthen the security and integrity of the
DNS while simultaneously protecting consumers and brand-owners.


The current and future quality of the WHOIS system


Continued access to an accurate WHOIS is essential to protect the
stability and security of the Internet, as well as to maintain
confidence of consumers in the integrity and safety of eCommerce.
Examples of essential characteristics of WHOIS:


*       Free, accurate, and publicly available access to WHOIS, to
quickly identify the registrant of abusive domain names, is critical to
the future of the gTLD program; 
*       Applicants committed to maintaining and enforcing WHOIS
requirements, including a centralized or "thick" WHOIS;  and
*       True applicant information in proxy registrations should be
escrowed until the application is verified against an IP Registry.  A
mechanism that allows access to the data under the defined conditions
should be developed and implemented in a uniform manner.


The application process for new gTLDs should require applicants to
genuinely commit to participate in an open and accurate WHOIS system.
Proxy and private registrations frustrate the efforts of trademark
owners to identify domain name registrants and should be strongly
discouraged, if not prohibited.  The growth of online fraud and, in
particular, phishing, necessitates stronger action at the registration
level to ensure that criminals can be quickly identified and stopped.
Even if applicants are not prohibited from anonymously registering
domains, at a minimum trademark owners must be able to identify
expeditiously the actual entity or individual responsible for
registering a domain name that conflicts with one of their marks.  




Lack of tools for brand owners to protect their brands and their


Currently, there are few options for brand owners, other than
self-policing, use of the U.S. Anti-Cyber-Squatting Act, and the Uniform
Domain Name Dispute Resolution Policy (UDRP) to protect their brands
over the Internet.  To promote the success of the proposed gTLD program,
new tools and safeguards could be created by ICANN.  Such mechanisms
should be in place before the new TLD application window opens, and all
registry applicants should be required to follow standardized processes.


One possibility includes a centralized registry of qualified names that
would act as a clearing house for "certified" brand-holders, based on
objective criteria. This no-cost "reserved list" would enable trademark
owners to make sure that they can put their own names "on hold" without
being forced to register in all these new places either during the
so-called "sunrise period," which would be hugely expensive, or after.
ICANN implicitly recognizes that additional costs that will be imposed
on trademark owners because it creates a Top-Level Reserved Names List
consisting exclusively of ICANN-related names.  We believe that ICANN
must offer the same solution to brand owners.


We note specifically that this list would not constitute a famous mark
list but would be open to any trademark owner who could meet certain
objective criteria.  For instance, the trademark owner would need to
establish that they own a national trademark registration in at least
one of the five ICANN geographic regions. The trademark owner must also
demonstrate through documentation that their marks have been the subject
of widespread cybersquatting as established by successful UDRP
proceedings or other proceedings brought in national courts of competent


Once these hurdles have been met by a trademark owner, their name would
be placed on the reserved list.  A prospective applicant who wishes to
register a name that is on the list would have their application
automatically flagged, at which point the applicant can bring an
expedited administrative proceeding to allow its name to move forward.
This proceeding would be administered by the arbitration and mediation
center of the World Intellectual Property Organization, which has
already been identified by ICANN as a potential dispute resolution
service provider (DRSP) and has established expertise in resolving
trademark and domain name disputes. 


In determining whether trademark rights are implicated, the use of
algorithms (based solely on visual similarity) in and of themselves, are
not a panacea for the protection of intellectual property rights.
Algorithms alone cannot be dispositive of string similarity.  There must
be manual reviews to ensure adequate protection of marks. Visual, aural
and semantic similarity should be emphasized in determining whether the
registration of various domain names may be implicated.  


Lastly, the UDRP process can be slow and cumbersome.  Trademark owners
may suffer harm before they can fully vindicate their rights in a UDRP
dispute.  Another tool that ICANN should consider are mandatory
notice/take-down procedures for infringing second-level names based on
established criteria in the new gTLDs, similar to the U.S. Digital
Millennium Copyright Act.


The cost of dispute resolution procedures


Currently, utilizing the UDRP for brand protection is costly and time
consuming; under the proposed gTLD Program, the UDRP as a remedy will be
impractical and cost prohibitive with the possibility of dozens to
hundreds of new gTLDs to police.


As far as brand protection in resolving string contention in the new
gTLD application process, auctions should be avoided and other improved
mechanisms for resolution should be developed.  If there are cases in
which an auction is necessary, bidders should be required to put into an
escrow account an amount large enough to deter fraudulent or defaulting
bidders.  Further, the utilization of auctions and resultant revenues to
ICANN need to be assessed regarding implications for affecting ICANN's
non-profit status.


As mentioned above, given the number of expected TLDs in the first-round
alone, the cost-potential for brand-holders to protect their brands is
daunting.  To help alleviate this burden in the UDRP process, prevailing
brand-holders in a dispute should not experience any fees or costs in
protecting their brand.  This could be accomplished by extending the
loser-pays approach of the dispute resolution process to cover all costs
and expenses, including attorney fees as well as filing fees paid to the
DRSP.  This will result in a more fair and equitable dispute resolution
process, with the added benefit of curbing registrations used for
harassment purposes.


Strengthening the dispute resolution system


To promote the success of ICANN's proposed gTLD Program, it is critical
that dispute resolution service providers' (DRSP) decisions should be
final and binding on ICANN, rather than be viewed as an "expert
determination" to be considered by ICANN as a factor in the evaluation
of the gTLD application.   Further, objections and responses should be
made public.  Lastly, objectors in dispute resolution proceedings should
not be forced to give up all their legal rights, specifically including
the right to seek redress in court.  


The Effect of the New gTLD Program on ICANN and the Internet


Concern over the need for new gTLDs


Given the unease over the unintended consequences for Internet users and
brand-holders alike, a significant question arises over whether or not
new gTLDs are needed in the first place.  ICANN's previous expansion of
gTLDs has largely failed to increase the number of registrants that
ostensibly justified the creation of new gTLDs.  The .COOP, .AERO,
.MUSEUM, and .JOBS gTLDs, for example, have no more than 10,000
registrations each.  As of this date, there has been no evidence to
suggest a compelling demand for the expansion of new TLDs.  Prior to
embarking on such a program as this, it would be advisable to study
whether or not competition in the domain-name marketplace, as ICANN
asserts, is actually lacking.  


To that point, the ICANN Board directed its President more than two
years ago to commission a comprehensive study on the economics of the
domain registration marketplace.[4]  However, this has not occurred.
Such a study would be invaluable for crafting a new gTLD launch in a way
that maximizes the competitive benefits.  We strongly recommend the
study should be started immediately and prior to moving forward with the
new gTLD Program.  If competition is found to be lacking, the next
logical step would be to assess potential causes of the lack of
competition, as well as address remedies and their impact on the
Internet community as a whole.




Assessing the success of the new gTLD Program


Given the scope and size of the current undertaking, there should be
significant delays in between application rounds to understand a number
of issues critical to the health of the DNS, such as:

*       Whether trademark owners will be able to vindicate their
intellectual property rights given the introduction of any new gTLDs;
*       Whether the costs associated    with brand management and mark
protection justify the benefits of the new gTLDs; and 
*       Whether the new gTLDs, in fact, do yield any tangible benefits
to the broader Internet community. 


The impact of new gTLD new revenue streams on ICANN's non-profit
corporation status


The proposed new gTLD Program stands to increase ICANN's coffers
significantly.  Prior to issuing its 2007 annual report, ICANN
maintained an $18 million balance.  As a result of its revenue streams
in 2007, ICANN now maintains a $35 million balance.  There are serious
concerns that ICANN is not fulfilling its charitable purposes under U.S.
law by building up large reserves, far beyond the "Basic Cost Recovery
Principle" set forth by ICANN ten years ago.[5]


Colleges and universities have recently been subject to increased
scrutiny by the IRS and Congress for effectively hoarding their
endowments at the expense of achieving the underlying missions that give
rise to their tax-exempt status.  To avoid any unwanted scrutiny, ICANN
should not use the additional revenues it will gain as a result of this
new gTLD system for any purpose other than the stated purposes in its
Charter and Bylaws.  


Industry strongly believes that with the new revenue streams created by
new gTLDs, ICANN should commit to expending additional resources to
ensure the security, stability and integrity of Internet commerce. Such
measures should include establishing mechanisms to ensure that trademark
holders have adequate and effective tools to protect their intellectual
property rights.




In viewing the new gTLD Program in light of the existing system,
observers have noted that ICANN may not have the ability to manage the
new gTLD application process.  In fact, adding numerous TLDs to the Root
System may actually produce the unwanted and unintended consequence of
creating instability and insecurity in the Internet infrastructure.  Our
comments above highlight the areas of greatest distress.  We look
forward to working with you, the ICANN Board of Directors and the ICANN
staff in strengthening the DNS, and if found to be necessary, helping to
explore ways to increase competition without creating the above noted
negative externalities.  


Given the above issues, we suggest that before ICANN proceeds with the
new gTLD Program and Process, it should follow these recommendations:


*       Undertake the full economic study of the domain name marketplace
mandated by the ICANN Board in 2007, as well as an extensive evaluation
of whether new gTLDs are needed in the first place given the record of
existing new gTLDs;
*       Establish criteria for success of new gTLDs in the proposed
first round - including Internationalized Domain Name TLDs - before
moving forward;
*       Modify the roll-out of the new gTLD program to only sponsored
gTLDs and a limited number of IDN TLDs, once the study has been
completed and criteria established; and
*       Limit further roll-out until sufficient safeguards are in place
to protect Internet users, businesses, and brand-owners alike from any
existing and expected acts of cyber-fraud. 


We respectfully request that the launch of the new gTLD program be
delayed until these issues and recommendations can be adequately






AeA (Formerly the American Electronics Association)

Aerospace Industries Association

American Advertising Federation

Applied Materials, Inc.

CA, Inc.

Corning Incorporated

Dow Corning

Eaton Corporation

Gates Corporation

Illinois Tool Works Inc.

Information Technology Association of America

ITT Corporation

Intellectual Property Owners Association

Karsten Manufacturing Corp. & PING



National Association of Manufacturers

National Marine Manufacturers Association


The French Oil Mill Machinery Company

Tooling and Manufacturing Association

Uniweld Products, Inc.

U.S. Chamber of Commerce


Yahoo! Inc.

Marc-Anthony Signorino | Director of Technology Policy | National
Association of Manufacturers 

1331 Pennsylvania Ave., NW | Suite 600 | Washington, DC 20004 
Direct 202.637.3072 | Mobile 202.494.1290 | Email msignorino@xxxxxxx
We are the millions of people who make things in America.



[1] MarkMonitor Brandjacking Index
, Spring 2007. (See also: 

[2] Gartner, Inc. (December 17, 2007). "Gartner Survey Shows Phishing
Attacks Escalated in 2007; More than $3 Billion Lost to These Attacks
<https://www.gartner.com/it/page.jsp?id=565125> ." Press Release.
Retrieved on 11 December 2008. (See also: 

[3] Ibid.

[4] See http://www.icann.org/en/minutes/minutes-18oct06.htm.    

[5] See 


Attachment: FINAL ICANN gTLD Coalition Letter Dec15 _2_.pdf
Description: FINAL ICANN gTLD Coalition Letter Dec15 _2_.pdf

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