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ICANN's New gTLD Double Standard?

Over the last two days I have sat in a room and watched a rather interesting dynamic unfold between the ICANN Board and its Government Advisory Committee (GAC). While I remain optimistic of there being a responsible closure to the new gTLD implementation process within the next six months, an apparent double standard being used by the ICANN Board could be a potential stumbling block. Specifically I refer to the repeated need for applicants to have "predictability and certainty" in connection with the new gTLD process. As someone that has worked with numerous registry operators in both the 2000 and 2004 rounds, I fully agree that increased predictability and certainty would make for a better process. However, listening to ICANN Chairman Peter Dengate Thrush over the past two days there appears to be some on the ICANN Board that believe that potential applicants have a right to predictability and certainty: pay your $185,000; answer fifty questions; and you are in the root.

Now the apparent double standard in ICANN's logic came to the forefront during today's session. In responding to the consensus request of governments that potential applicants "provide information on the expected benefits of the proposed gTLD, as well as information and proposed operating terms to eliminate or minimize costs to registrants and consumers," Peter Dengate Thrush provided the following response:

"[T]he reality is that applicants are not going to actually give us any useful information about their intentions. We can't keep it confidential. What they would probably give us is business plans, and we all know how useful they are after 18 months after operations start."

It is difficult to reconcile a potential right in predictability and certainty for applicants, while these very same applicants are not able to give any predictability and certainty to either ICANN, the GAC, or as Bill Dee from the European Union thoughtfully reminded us the "billion of internet users who do not attend ICANN meetings and who do not participate in ICANN processes and most of whom do not know that ICANN exists." The further irony in ICANN's apparent double standard is their admission based upon their own expert analysis that "the quantitative predictions of net benefit were speculative to predict."

Having worked with new and existing registry operators (both gTLD and ccTLD) I can tell you there is no predictability and certainty in the domain name ecosystem. In fact it has been my life experience that the only two guarantees in life are death and taxes. Therefore until the ICANN Board accepts the fact that this new gTLD process is not a binary black box solution that will operate with 100% predictability and certainty, it is difficult to see how the Board can engage in good faith negotiations with the GAC to address their very valid concerns. All stakeholders in this new gTLD process need to accept the fact that there is an inherent degree of unpredictability and uncertainty that exists throughout the entire new gTLD process, and that all parties need to work together to minimize these risks on ALL sides of the equations.

Unfortunately time is running out and the future viability of the private sector led model hangs in the balance. As stated in my last article, "the ICANN private sector led model is still dependent upon the broad support of governments. If governments should walk away from the ICANN model, there is a real and distinct possibility of ICANN becoming a ward of the state."

By Michael D. Palage, Intellectual Property Attorney and IT Consultant

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Comments

Writing is on the wall By George Kirikos  –  Mar 02, 2011 6:18 am PDT

It's time for ICANN to see the writing on the wall, and abandon their current approach. I'm against new TLDs. However, if one was going to go down that path, there are certainly far better approaches that could benefit the public interest, rather than the self-serving one that ICANN is pushing. In particular:

Option #1: Have the public propose new TLDs (e.g. .shop, .store, etc.), and ones that have a broad consensus of support would then have a public tender process, for fixed periods of operation. e.g. 5 years. Afilias might bid $2/domain per year for the contract, Neustar might bid $1.75/domain per year, and VeriSign might bid $2.25/domain per year. In that example, Neustar would win since their bid was superior. After 5 years, there would be another open tender. The gTLDs would always be owned and operated for the public benefit, and there'd in particular be no "presumptive renewal" for registry operators. There'd be no change to "vertical integration" rules.

Option #2: If you wanted to let private entities control TLDs, then the Ascended TLDs approach I proposed is a far more elegant solution, since it protects existing registrants rights via the concept of "easements." Basically (read the full proposal I linked to), com/net/org registrants would be able to "ascend" to the root. Since any major brand owner already owns their relevant com/net/org, they'd be able to ascend (if they acquired the relevant easements), or easily block others from ascending.

Option #3: If you simply want a flat name space (which I don't think is a good idea), simply make the dot-com zone ascend directly to the root, excluding the TLDs that already exist (the exclusion would only affect a few hundred dot-com registrants).

These kinds of policy alternatives should have been studied, and compared for benefits to the public (i.e. the goal should be to maximize public benefits). However, this was not done! In the comments analysis of the economic studies, they wrote:

The Phase II Report did not analyze all possible policy alternatives.

(from page 4, with note of how the authors failed to consider efficient allocation mechanisms on page 3) By the way, these same economists said on page 8

The Phase II Report did not reach conclusions on the desirability or
undesirability of moving forward with new gTLDs, nor was it intended
to do so.

which is itself enough to repudiate the Board's position that new TLDs should go forward.

"the ICANN private sector led model is still dependent upon the broad support of governments" By John Berryhill  –  Mar 02, 2011 7:16 am PDT

...and the authority of the ICANN root is still dependent on the consensus of private network operators to use it.

Michael,Why are we still talking about details By Constantine Roussos  –  Mar 02, 2011 10:27 am PDT

Michael,

Why are we still talking about details and the obvious.

"Having worked with new and existing registry operators (both gTLD and ccTLD) I can tell you there is no predictability and certainty in the domain name ecosystem."

Of course there is no certainty and predictability. New TLDs are about openness, new business models, innovation, competition and consumer choice. This is the reason why new TLDs will bring a host of benefits to the Internet.

Some will succeed and some will not. What is better: Having numerous TLDs that will be ultra-successful or having none? Based on the 80-20 rule, I am predicting 1 out of 5 new TLDs will do a stellar job. This is no different than VCs investing in 10 startups or the music industry investing in 10 bands hoping 1 will break through and making enough money back to pay for the failures. The marketplace will determine the winners and the losers. The losers will be taken care of. Operating new TLDs from the registry perspective is not that expensive, especially if you are a large registry.

We have completely lost the real focus on new TLDs in regards to innovation, competition and increased choice. Fact is the consumer wins every time. Does the general public know about .museum, .coop, .aero or .travel exist? 99.9% have no idea. Welcome to the world of new TLDs. Only the most innovative will rise to the top. The rest will just be exchanging ownership hands and be lost in obscurity.

Mike please give me one business sector that has 100% certainty and predictability. You can not argue on innovation, competition and creating a difference that matters then say that new TLDs must be certain, predictable and the same. There is a lack of alignment in those statements.

In regards to governments, just as big corporate trademark lawyers, their opinion has been heard over and over again. As recent events have shown globally, there needs to be a fine line between government control of the Internet. Too much government control does not usually lead to benefits to consumers or the people those governments serve. The governments running the country could certainly abuse that power for their own self gain. Governments are very similar to corporations. They need to be elected and they have to please their constituents/shareholders to be re-elected. This means, their actions go contrary to the competing party they are going against in elections.

New TLDs should not be about government control or 100% predictability/certainty. Seems we are losing focus on the primary purpose of the introduction of new TLDs: innovation, competition and consumer choice. Let us not lose track of that. There are no guarantees in life or business Mike.

New TLDs should be about a breath of fresh air and a host of new opportunities with the consumer in control.

Constantine Roussos
.music

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