Policy Proposal from Overstock.com

[Chuck Warren <chuck_warren2004@xxxxxxxxx>]

Comments by Overstock.com, regarding Policy Proposal for Release and Allocation 
Process for Single Letter, Second Letter Domain Names in Open and Restricted 
gTLDs
   
  Submitted to the PDP ? Dec 05 Public Comment Process and to the PDP ? Feb 06 
Policies for Contractual Conditions for existing gTLDs
   
  Submitted April 29, 2006
   
  Summary of comments 
  Overstock.com asks that the PDP processes now underway as PDP ? Dec 05 and 
PDP Feb 06 include policy recommendations on the release and allocation 
guidance of reserved names at the second level. There are several areas where 
lists of second level ?names? are reserved in the process of negotiating the 
registry contracts, and in some instances, the rationale to continue to reserve 
second level names no longer exists. In other instances, there is not 
consistent policy guidance from registry to registry.   As we understand the 
ICANN system today, the reserve name ?practice? includes several categories, 
including how geographic names are treated, the practice of reserving single 
letters, symbols, and numbers, and perhaps some additional areas. However, we 
are concerned with two areas where names are reserved at the second level. We 
believe that in these two cases ? geographic names and single letters ? policy 
guidance should be developed during the PDP processes now underway. 
 We acknowledge that the area of geographic names is complicated, since it 
involves the interests of governments, as well as questions related to the 
introduction of Internationalized Domain Names; therefore, we suggest that a 
separate policy development process be considered to address geographic name 
policy, after consultation with the Governmental Advisory Committee (GAC). 
   
  The second area ? the release of single letter, second letter names, such as 
?a?, ?c? and ?o? is much simpler to address and we propose an approach to this 
resolution, and to the rationale for releasing and allocating these names in 
the existing generic open and restricted gTLDs. Since some policy areas are 
delegated to the sponsors of ?sponsored? gTLDs, we would suggest that this 
policy area can be considered by the sponsoring entity, as long as they adhere 
to certain consistent policy guidelines that should be addressed by consensus 
policy.  However in the case of open and restricted gTLDs, such as .com; .net; 
.org; .info, and .biz, we recommend that the release and allocation of these 
names be governed by policy which releases the names for registration by a 
party with an established use/.right in the name, and through a process which 
creates a funding resource to contribute to ICANN?s stability. This 
recommendation is detailed below. 
   
  Overstock.com?s interest: 
  Overstock.com has an interest in the registration of one of the single letter 
names ? ?o?, since it acts under that name in its marketing of e-commerce goods 
and services. Because of its interest, it has invested considerable time in 
understanding the issues that initially existed, and the present situation 
regarding the availability of these single letter, second level letters. 
Earlier, the ICANN staff also undertook a good amount of research regarding 
whether there are any remaining technical reasons to continue to reserve the 
names. This information was initially shared in brief form with the GSNO 
council as a 
staff manager background report; and we believe that there is additional 
information which can be provided by the ICANN staff to further inform the 
policy process. We ask that the ICANN staff be invited to present all of the 
available information to the PDP process. In addition, Overstock.com has 
retained a technical expert to provide advice on the situation regarding the 
technical issues. 
   
  Overstock.com has an interest in registering ?o? since Overstock.com operates 
in its marketing and customer facing interactions via ?O?, as its identity. It 
has attempted to register ?o.com? and has been advised by ICANN staff that the 
reserve status of the single letter second letter names requires policy 
development from the GNSO Council. The use of the five existing second letters 
demonstrates that there is no longer a technical reason to continue to keep the 
single letter names on reserve status. However, to verify that, and to address 
any technical questions, Overstock.com has retained a technical expert. In 
addition, according to the ICANN staff manager background paper, ICANN staff 
also undertook such verification and determined that there are not reasons to 
continue these names as ?reserved? status. 
   
   
  The Policy Process Underway Today will set policy governing existing and 
further new gTLDS for some time to come:
   
  Given the nature of ICANN, it is important to acknowledge that the PDPs now 
underway will be the definitive policies for both new gTLDS and for the 
existing gTLDs. It is unlikely, given the additional steps of policy work still 
before the GNSO Council and the importance of the IDN policy work that there 
will be another set of gTLD ascii character policy development any time in the 
foreseeable future.  Thus, the policy guidance provided should address reserve 
names, which are part of the contractual terms of registry contracts. 
   
  There are presently two PDPs:  PDP-Dec05, new gTLDS Policy and PDP-Feb06, 
Policies for Contractual Conditions, Existing gTLDs Policy Development Process. 
Since the policies developed via these two policy processes will be the 
definitive policy governing both existing and forward going contracts with 
gTLDS registry providers, it is clear that the  treatment of reserved names 
should be addressed.  
   
  Through no fault of anyone, the reserving of names has been undertaken to 
date with little policy oversight, as been based on either existing practices, 
as with the treatment of the single letter, second letters, symbols, and 
numbers, or through adoption of other ?rules? that made sense at the time of 
their creation, such as the reliance on the ISO list of three letter country 
names.  In the area of the treatment of geographic names, the ICANN staff has 
established a de facto treatment in three registry agreements: .info; .travel 
and .jobs, but other registries have not had the same policy requirement 
written into their contracts. 
   
  To date, there hasn?t been a publication of the practices regarding reserving 
of names in a way that there could be consideration of policy and a provision 
for public comment on the practices relied on. That may have been appropriate 
until now, but with the creation of policy for new and existing gTLD 
agreements, the GNSO should provide guiding policy in the area of reserved 
names in the area of geographic names and in the release and allocation of 
second letter single letters. 
   
  Why address these issues at this time: 
   
  As stated earlier, the GNSO should address one of the issues and refer the 
second to the ICANN staff for the development of an Issues Report for further 
and later consideration, and to allow the inclusion of the implications for IDN 
introductions as well as ascii character gTLDs.
   
    
   Treatment of geographic names should be the topic of a requested Issues 
Report: Overstock.com is aware that there are concerns of governments about the 
treatment of geographic names and thus we recommend to the GNSO that they 
establish a process to better study and understand the concerns of governments 
and national authorities regarding the future treatment of such names in new 
gTLDs. This process should be a parallel process to the existing policy work 
since it also has implications for the introduction of internationalized domain 
names, and we therefore believe that this topic should be given to the ICANN 
staff as a request to develop a specific Issues Report. 
   
    
   Unreserving and allocating single letters:  The second level, single letters 
of the alphabet are on reserve for historical reasons, and that is the area 
that Overstock.com asks that specific release and allocation guidance be given 
in these two Policy Development Processes. Initially, there were concerns that 
the single letters might be needed for addressing scaling issues in the 
Internet. They, like symbols and numbers were reserved. Five names have, over 
time, ?leaked? into use, and they were registered through the ?normal? 
registration process are presently in use in various ways. The fee paid for 
their registration was a typical registration fee of a few dollars, and they 
are renewed in the same manner, with the same approach as any second level name 
available for registration. These names include ?z?, ?x? and ?I?, as examples. 
   
   
  Recognizing that there will be contention for the names calls for policy 
similar to the framework of Sunrise and UDRP like services:
   
  While  Overstock.com wants to clearly declare its personal interest in the 
second level registration of one of the names, Overstock.com also accepts that 
there may in the long run be another party that has a ?established right? that 
may override Overstock.com?s right and that a fair process, conducted in a 
neutral and transparent manner, will allow competition among parties who have 
established rights.  Ultimately, legal systems regarding rights may even make 
the final decision about who has the final right to use such a name, if for 
instance, trademark law provides the basis for a determination, as it does via 
the present registration system and the available UDRP for resolving conflicts. 
Thus, we propose that there be a high degree of reliance on the concepts which 
are presently used in the registration processes, such as relying on 
established rights for ?opening? the space up, similar to the ?sunrise? period 
for a new gTLD, and using a system based on the UDRP model
 for determining which entity might have stronger rights, in the event of 
multiple applicants for a single letter. 
   
  Benefit to ICANN and to the Community: 
   
  During the time that Overstock.com has been actively engaged at ICANN, we 
have learned a good deal about the issues that ICANN faces, including the 
concerns that exist about stability of funding, the need for a contingency 
fund/reserve fund; and the interest in the community to find ways to support 
increased participation in ICANN. 
   
  Overstock.com recognizes that some in the community and even perhaps some 
Councilors may question the value of releasing these letters, and ask why only 
a few registrants should benefit from being able to register and use these 
letters?  
   
  We have given serious thought to that question, and we believe that there is 
clear value to ICANN in releasing these names, in a manner which can benefit 
the full ICANN community, through contributing to the stability of ICANN?s 
funding.  
   
  We have also heard that there are concerns about the use of the names by 
?traffic aggregators?. We note that in the award of sponsored registries, ICANN 
had a process by which an applicant could define who the sponsoring entity was, 
and were certain practices of the sponsoring entity were described in the 
application. Application were posted for public comment. If the public comment 
process supports such an approach, a similar process can be established in the 
application process where the applicants are asked to describe the business 
that they operate which will use the ?single letter? as a name. This need not 
be onerous or too detailed, but can, IF the public comment process in the 
community supports this approach, result in some assurance that the single 
letter names are used by business, organizations or individuals for conducting 
legitimate practices. 
   
  Criteria and Processes to ensure an orderly transition of the names into full 
use:
   
  We propose that the letters be released in a manner which would have 
predetermined conditions that entities with a pre-existing relationship with 
the ?name? would have a sunrise period to submit an application to compete to 
register the ?name?. 
   
  This sunrise process can be based on earlier forms of the sunrise process 
where prospective registrants must demonstrate standing of a legitimate nature 
with the use of the name, through trademark or existing long standing use of 
the name in ecommerce, marketing, advertising, etc. Each ?name? will have a 
different set of applicants, and there should be a well defined set of criteria 
to demonstrate standing, so that the managers of the process would have limited 
discretional ability. Once at least one qualified applicant per letter is 
identified, a managed auction of the name should be held, by a qualified 
independent third party, the proceeds of the auction should pay for the cost of 
managing the process, including the auction and contribute to the creation of a 
reserve and contingency fund for ICANN. This reserve fund is a much needed, and 
long discussed topic within ICANN. The fund will do much to contribute to the 
longer term stability of ICANN, and relieve reliance on
 the funds contributed through the general registration processes, RIR and cc 
contributions for the creation of the reserve fund. This generally will mean 
that the budget demands upon the funds contributed through registrars and 
registries will primarily be focused on the annual budget and not be burdened 
by additional funding issues.
   
  In addition, a one time per name contribution, as a percentage of the payment 
from the auction could c0ntribute a limited but defined amount to any 
special/restricted funds which the Board and the community have agreed to, via 
the Strategic Planning process, such as financial support for increasing means 
of participation; DNS-SEC, or developing country participation mechanisms. 
Overstock.com does not propose to define the size of such contributions but 
notes that ICANN would be well served to establish an independent advisory 
group if restricted funds are created and utilized and suggest that such a 
model should be undertaken without influence or direct participation by those 
who are part of the auction process itself. 
   
  Finally, the managed auction can be conducted in a way that allows for the 
reality that some ?names? may not have applicants at this time, and could 
remain on reserve until they do generate applications. 
   
  Since the technical issues no longer exist, and there is no useful reason to 
continue reserve status for these names, Overstock.com asks that the policy 
development processes address the release of these single letters and suggests 
that the policy should clearly direct the staff to develop an allocation 
process, with the following guidelines:
   
  Names in the existing open and restricted gTLDS should be released with a 
sunrise period for the submission of ?statements of intent? to use the names in 
e-commerce/active web site usage.
   
  The staff should develop a managed auction allocation process which takes 
into account the right of bidders who have existing rights of use in the names, 
such as trademark registration, active and demonstrated long term use of the 
name or its equivalent in ecommerce, advertising, etc.
   
    
   The results of the managed auction should be set aside to build a reserve 
fund/contingency fund for ICANN. The terms of reserving the name for use should 
follow the existing practices of other generic names, e.g. for no more than 10 
years renewal period, and should be register able via the usual registrar 
process, at a fee similar to that in the marketplace, once the auction fee is 
paid to the ICANN special fund.  
   The results of the auction can also have a one time payment allocation to 
those special funds called restricted funds, which ICANN?s board may have 
authorized, such as for purposes of education or outreach to developing 
countries or DNSSEC. However, such payments should be drawn from the total 
auction fee and should not be a special fee which creates additional ?rights? 
to bid for the names.  
   Names should not be auctioned if there are no bidders who are prequalified 
as having legitimate rights to use the name, such as trademarks, etc.  
   Names can continue in reserve status until such time as a bidder self 
identifies that meets the qualifications to participate in such an auction.  
   Names should be ?used? actively in ecommerce, and the bidders should so 
state in their prequalification application. The purpose of the proposed use of 
the name will be posted in a transparent manner, just as the bids for gTLDS 
registries were posted, before the auction is held, and will be part of 
qualifying to participate in the auction. 
   
  Rationale for unique treatment of single letters versus other second level 
registrations. 
   
  The five single letter names that are presently in use were allocated in the 
same manner that all other second level names are ? through a simple 
registration request. The fees paid are in line what a typical registration of 
any name costs. The renewal period is governed by the existing policy of up to 
ten years. Some might suggest that another way to handle the release of the 
other single letters is merely to ?open? them to registration. Overstock.com 
considered that but notes that if that is the case, then the ensuing court 
trials will merely result in long standing and burdensome and costly litigation 
between parties over ?rights to use the name and will not bring any benefit to 
ICANN?s stability or to the community who fund ICANN. There would be a lot of 
expense but it would be drained off into the litigation and court costs.  There 
is no benefit to ICANN.
   
  The Single letters are in a unique status somewhat coincidently, due to five 
having been accidentally allocated, and the rationale for continuing their 
?reserve status? having ended, and the emergence of several companies who now 
operate with a single letter identity in a major part of their business. 
Overstock.com has talked with several companies with interest in using a single 
letter domain name, which matches their business identity, who are watching to 
see whether ICANN will allow their registration.   Overstock.com believes that 
ICANN can benefit from the approach of releasing and auctioning the names to 
entities with verified legitimate rights in the use of the name, and who submit 
verifiable documentation of the legitimate right, whether that is trademark or 
long standing use of the name in conducting of transactions or ecommerce.  
   
  We suggest that the PDP process now underway should include policy to govern 
their release and instructions to the ICANN staff to develop and publish for 
public comment a process for ?allocation? in a manner that creates a financial 
benefit to ICANN?s stability through the creation of reserve /contingency fund. 
   
  The reserved treatment is a contractual condition that should be addressed in 
a manner that it established policies for both new and existing gTLDs, although 
in the view of Overstock.com, the policy guidance governing sponsored gTLDs 
could largely be turned over to the sponsoring entity to manage, as long as 
there is consistency with policy guidelines established by the Council, and 
full transparency and publication of the policies that the sponsoring entity 
establishes. 
   
  We welcome questions or comments from other parties regarding our proposal, 
including of course, the GNSO Council?s relevant Task Forces.  
   
  Chuck Warren, for Overstock.com
  cwarren@xxxxxxxxxxxxx
  801-651-1555