ICA Files Comments on Version 3 of New gTLD Draft Applicant Guidebook

Sunday, November 22nd, was the filing deadline for comments on the third version of the Draft Applicant Guidebook (DAG) for new gTLDs, so ICA and many others dutifully submitted further input on this latest iteration of the proposed rules of this new game. IT seems that the opening date for acceptance of applications for new gTLDs recedes further rather than draws closer with each new version of the DAG. Indeed,  ICANN staff received a quite hostile response from would be applicants at the recent Seoul meeting when it was announced that no new date would even be projected and that the process would launch on the unspecified day when ICANN’s Board decided that all the overarching issues had been satisfactorily resolved. Informed speculation was that applications need not be ready until third quarter of 2010, causing those frustrated by the process to propose an Expressions of Interest (EOI) pre-application process that they hope will bring the start date closer, sooner – but that suggestion itself appears somewhat controversial as it would involve submission of a large upfront deposit in return for which a potential applicant could lock up a “string” for the first application round.

From domainers’ perspective, V3 is an incomplete work in progress, as the key matter of new trademark protections remains unresolved and the GNSO will not submit its consensus views on what they should be (if it can find consensus) to ICANN’s Board until mid-December. Notwithstanding the paucity of new material in this version of the DAG relevant to our key issues, ICA did file a short comment letter that expresses our thanks to ICANN’s Board for agreeing that the proposed Uniform Rapid Suspension (URS) for new gTLDs is a significant policy initiative that deserves GNSO review, and that notes that we are involved in the current consensus-building process. We also note approvingly that the latest version of the proposed Registry Agreement contains a new proviso that goes a long way toward prohibiting differential pricing powers that would permit a registry to “tax” a domain’s economic success. Finally, we urge ICANN to hold off on the launch of new gTLDs until it has further expert input on the recent Root Scaling Study which suggested that trying to introduce too much change at once to the DNS could cause it to crash, which would not be a good thing at all.

With real progress having been made on differential pricing, and with a process underway that will hopefully result in a far more circumscribed and balanced version of the URS, we see this process moving in a positive direction. We will therefore remain fully engaged in it, but so far as we’re concerned the jury will remain out on new gTLDs until we see the final form of the rights protections that will accompany them.

Here’s the text of ICA letter for those who want more detail —

By E-Mail to 3gtld-guide@icann.org    
November 22, 2009    

Board of Directors
Internet Corporation for Assigned Names and Numbers (ICANN)
4676 Admiralty Way, Suite 330
Marina del Rey, CA 90292-6601

Re: Third Version of New gTLD Draft Applicant Guidebook

Dear Members of the ICANN Board:

This comment letter is submitted by the Internet Commerce Association (ICA) in regard to ICANN’s October 4th notice establishing a new period for public comments on Version Three of ICANN’s Draft Applicant Guidebook for new generic Top Level Domains (gTLDs).

ICA is a not-for-profit trade association representing the direct search industry. Its membership is composed of domain name registrants that invest in domain names (DNs) and develop the associated websites, as well as the companies that serve them. Professional domain name registrants are a major source of the fees that support registrars, registries, and ICANN itself. The ICA is an International Member of ICANN’s Commercial and Business Constituency and presently has more than 120 members located in the United States and thirteen other nations.

ICA previously commented in a detailed December 15, 2008 letter regarding Version One of the Draft Applicant Guidebook (DAG); that letter may be found at http://forum.icann.org/lists/gtld-guide/msg00164.html . We submitted additional commentary on the second version, which is available at http://forum.icann.org/lists/2gtld-guide/msg00089.html . This letter incorporates and builds upon these previous statements of ICA position and is limited to those primary areas of prior concern for which third version modifications require additional comment and clarification.

Executive Summary

•    ICA appreciates the recognition by ICANN’s Board that the URS and other proposed rights protection mechanisms are important policy issues that require further GNSO input. The STI-RT is making good progress toward recommendations for balanced consensus policies and the Board should make reasonable accommodation for adequate time for completion of its work.

•    We commend new language in the Registry Agreement that goes a substantial distance toward preventing differential pricing that could permit a registry to tax the success of domain developers.

•    No final date for the acceptance of new gTLD applications should be set until the Board fully assimilates further expert input regarding the recent Root Scaling Study which suggested that full implementation of DNSSEC must precede introduction of new TLDs to preserve Internet stability.

Discussion

Acceptable Rights Protection Methods (RPMs) at the Second Level

The establishment of rights protection methods for new gTLDs that go beyond the Uniform Dispute Resolution Policy (UDRP) has been the leading area of ICA’s concerns, given their potential to severely prejudice the legitimate rights of domain registrants. We have been particularly vocal in our protests that the Uniform Rapid Suspension (URS) policy advocated by the Implementation Recommendation Team (IRT) was biased against, and lacked essential protections for, registrants. We were therefore pleased that on October 12th letter from Chairman Thrush and President Beckstrom informed the Generic Names Supporting Organization (GNSO) that it was being invited to provide input “on whether certain rights protection mechanisms for second level strings recommended by the staff based on public input are consistent with the GNSO’s proposed policy on the introduction of new gTLDs and are the appropriate and effective option for achieving the GNSO’s stated principles and objectives”. The subjects to be covered by this invitation include the URS, and this solicitation of input from ICANN’s policy-making body is in concert with ICA’s consistent view that the URS was a substantial new policy initiative that required GNSO review.

During the recent Seoul ICANN meeting the GNSO established a Specific Trademark Issues-Recommendation Team (STI-RT) to seek to develop consensus positions on key issues raised by the URS and other RPMs. ICA has been constructively engaged in its work as an alternate delegate from the Business Constituency.

The URS issues that are being addressed and are of substantial importance to registrants include:

•    Establishing a carefully circumscribed purpose for the URS so that it does not substantially displace the UDRP

•    Meaningful and timely appeals process

•    Adequate sanctions to deter and punish complainant abuse

•    Adequate notice period for alerting registrants

•    Establishing regular reviews of the functioning of the  URS, as was recommended by ICA in our oral remarks at the Seoul Public Forum

There are two additional issues receiving STI-RT consideration on which ICA wants to make public comment at this time:

•    As regards whether the rights protection methods should be mandatory or optional, we are in general concert with the consensus developing within the STI-RT that mandatory provisions are acceptable overall if acceptable in their particulars. As we do not yet know what the particulars of a final URS will be we can not state a position on whether it is acceptable. But we believe that the “optional” nature of the staff recommendation is largely illusory, as any new gTLD applicant electing to forego the URS or other recommended RPMs would not only forego a critical point toward the evaluative scoring of its application but could also be inviting higher legal liability. In any event, a URS that is not acceptable in its particulars cannot be made acceptable by an “optional” status.

•    Although the STI-RT is still addressing the issue of whether a winning complainant in a URS should be able, for a fee and after some elapsed time period, be able to seek and acquire transfer of the offending domain, our general view is that such follow-up transfers should not be permitted. The URS has been presented as a narrow supplement to the UDRP that will allow for fast and less expensive suspension of a clearly infringing domain, and allowing it to morph into a means by which domain transfers can be effected would invite abuse of the process as a back door means of affecting domain acquisition. In short, we believe that complainants who seek the transfer of a domain should be required to initiate a normal UDRP procedure. Further, in this regard, we are quite concerned that at a time when the STI-RT is seeking to achieve balanced consensus on the URS, nearly simultaneous announcements have come from the World Intellectual Property Organization (WIPO) and the Czech Arbitration Court (CAC) that they intend to implement a “fast track” UDRP option in the first quarter of 2010. We are further concerned by WIPO’s claim that it can implement such a UDRP alternative as a mere amendment to its Supplemental Rules and absent any approval from ICANN. The proposed fast track UDRP appears substantially similar to the URS in purpose but, while affording a domain transfer, would lack the many balancing and safeguard criteria being debated by the STI-RT. We will be providing separate input to ICANN on this matter but did wish to note its relationship to the URS and the ongoing work of the STI-RT.

The STI-RT is making commendable progress toward consensus on these matters, notwithstanding the exceedingly short time frame – only two months – that the GNSO was provided to deliver a consensus position to the Board. Given that there is general dissatisfaction across the entire complainant to registrant spectrum with the “staff assimilation” version of the URS, we would hope that the Board will, if necessary, provide the GNSO with a limited extension of time to develop and deliver consensus recommendations.

Prohibition of Differential Pricing

ICA has consistently urged that the New gTLD Registry Agreement (RA) specifically prohibit the practice of “differential pricing” of domain renewals, as this could allow registries to operate as private sector taxing authorities. Registries should receive adequate profit for the technical service they provide, but they should not be permitted to take unfair advantage of the success of enterprises developed at particular domains.

We are therefore pleased that revised Section 2.10 of the latest RA contains the following provision: “Registry Operator shall offer all domain registration renewals at the same price, unless the registrant agrees to a higher price at the time of the initial registration of the domain name following clear and conspicuous disclosure of such renewal price by Registry Operator.” This addition effectively forecloses the ability of a registry operator to assume that tax authority role based upon a domain’s post-registration economic performance. While we remain concerned that a registry could charge a higher annual renewal fee to the registrant of a premium generic or brand domain than for a non-premium domain, for provision of the same technical service, it is nonetheless a significant step in the right direction. However, the provision should be further clarified so that the term “initial registration of the domain name” clearly refers to the first time the domain is registered by any registrant, and does not encompass any subsequent change in domain ownership due to a sale or the domain being acquired on a drop catch. In other words, the pricing rule that accompanied a particular domain at its inception should carry over to any subsequent acquirer regardless of how they obtained it.

Pace and Prioritization of New gTLD Introductions

ICA has consistently counseled caution in the consideration of new gTLD introductions. The August 31st Root Scaling Study added fresh grounds for due care, given its findings that “the system is capable of managing the risks associated with adding either (a) DNSSEC or (b) new TLDs, IDNs, and IPv6 addresses over a period of 12-24 months—but not both… If a choice must be made, DNSSEC should come first.” We understand that ICANN has asked its internal security and stability advisory groups to further analyze the Study and to make additional recommendations to the Board.
No final date for the acceptance of applications for new gTLDs should be set until the Board has had an adequate opportunity to fully consider that further expert input. Maintaining the security and stability of the Internet and existing TLDs must be job number one for ICANN, and new gTLDs should be introduced only at such time that such action can be taken without unreasonable risk of a DNS crash.

Conclusion

We hope that ICANN will find our additional comments useful as it continues to revise the Draft Applicant Guidebook. We are pleased that the DAG is evolving in a manner that is more respectful of registrant rights. However, our final position on the launch of new gTLDs, and the willingness of domain investors and developers to invest in them, must await final resolution of the critical questions concerning RPMs at the second level.

Thank you for your consideration of our views in this matter.

Sincerely,
Philip S. Corwin
Counsel, Internet Commerce Association