DotConnectAfrica Trust (DCA Trust), the contending applicant that submitted an independent bid for the .Africa new generic Top-Level Domain name, recently submitted another fulsome response to the ICANN Board of Directors to defend the GAC Objection Advice that was issued against its .Africa new gTLD application by the Governmental Advisory Committee (GAC) body within ICANN.

It may be recalled that DCA Trust previously submitted a response to the GAC Early Warning in November 2012, and was therefore adequately prepared to articulate another detailed defense and response to the GAC Objection Advice that came out of the ICANN GAC Meeting in Beijing, China.

DCA Trust submitted its response to the GAC Advice within the mandatory 21-day window that any application that has received a GAC Policy Advice is given to respond as per new gTLD Program Guidebook stipulations. The response by DCA Trust was submitted ahead of the general deadline that expired on May 10, 2013. DCA Trust will publish its response document for general circulation after its details are posted publicly by ICANN.

In its response to the ICANN Board, DCA Trust disagreed with the GAC Objection Advice, and noted that its .Africa new application has not received any other Formal Objection on the basis of the four (4) main objection criteria allowed under the new gTLD Program. During the Objection Filing period that expired on March 13, 2013, DCA successfully defended itself against the threat of Community Objection that was issued by the Independent Objector for the ICANN new gTLD Program.

DCA Trust remains confident that the well-argued and compelling response that it has submitted enabled it to further substantiate its case to the ICANN Board of Directors. The new gTLD Applicant's Guidebook provisions suggest that the ICANN Board is not necessarily expected as a rule to follow any GAC Policy Advice that it may receive. This line is also supported by the 'Core Principles' of the ICANN GAC.

DCA Trust therefore remains highly optimistic that the processing of its application by ICANN will continue, and that the ICANN Board would allow DCA Trust's .Africa application to proceed towards Initial Evaluation and Contention Resolution, and that the GAC Objection Advice will not be implemented by the ICANN Board on this occasion.

Notwithstanding, DCA Trust in its response reiterated its strong belief that the only conceivable way forward is for the existing contention situation regarding the .Africa string to be resolved through a process of mutual negotiation and settlement between contending successfully evaluated parties as encouraged by ICANN based on new gTLD Program Guidebook stipulations.

As an independent new gTLD applicant that is participating in the program based on multi-stakeholder principles, DCA Trust would like to reassure its esteemed supporters that the organization shall continue to follow due process mechanisms to ensure that its .Africa new gTLD application remains viable and in contention for the Africa name string until final resolution.

In the interim, DCA Trust intends to continue seeking accountability to ensure that its public grievances and the issues of illegality that it has already highlighted would be given due credence and properly investigated by the authorities.

DCA Trust would like to thank all its supporters for the unstinting moral encouragement and goodwill that it has continued to receive from different sections of the ICANN Global Community.

The GAC Communiqué recommends that ICANN implement a range of regulations (which the GAC calls "safeguards") for all new generic top-level domains (gTLDs) covering areas ranging from malware to piracy to trademark and copyright infringement. The GAC proposes specific safeguards for regulated and professional sectors covering areas as diverse as privacy and security, consumer protection, fair lending and organic farming. Finally, the GAC proposes a "public interest" requirement for approval of new "exclusive registry access" gTLDs.

The GAC's recommendations raise complex issues of ICANN's mission and governance and how they relate to the laws of the jurisdictions in which the registries operate. Without getting into the details of the specific recommendations, the expansion of ICANN's role implicit in the GAC's recommendations is inconsistent with ICANN's policy of opening entry into the domain space. Opening entry into the domain name space is intended to bring the benefits of competition and greater innovation to the market for TLDs. A major benefit of a competitive market is that there is generally no need for regulation of product attributes, as the GAC is proposing. Indeed, regulation of such a market will be counterproductive to the interests of consumers.

In a competitive gTLD market, registries can be expected to provide the services their customers demand. Registries that provide those services will flourish, and those who do not will not survive. Importantly, a competitive gTLD market allows for a range of services corresponding to different preferences and needs. The type of regulation the GAC is recommending will raise costs to registries and impede the development of innovative new TLD services, ultimately harming consumers. The value of gTLDs as economic assets and the benefits of the new gTLD program will be diminished.

Included in the GAC Communiqué is the recommendation that exclusive access or closed registries for generic terms should be in the "public interest." A public interest standard is vague and difficult to define and therefore is susceptible to being applied in an arbitrary manner. As I indicated in March 6, 2013, comments to ICANN on the subject, a major benefit of the new gTLD program, in addition to providing competition to incumbents, is the ability of the entrants to develop new business models, products, and services. Valuable innovations are likely to be blocked if ICANN attaches a public interest requirement to exclusive access registries.

There may be instances where regulation is warranted. For example, the protection of intellectual property in domain names has become a major issue, particularly in connection with the introduction of new gTLDs. ICANN's trademark clearing house is an attempt to address that issue. There may be other areas where regulation is warranted, but it is unclear whether ICANN is the appropriate venue.

If ICANN wants to be more of a regulatory agency, it should adopt good regulatory policy practices. Specifically, ICANN should demonstrate that there is a significant market failure that is addressed by the proposed regulation (or safeguard), that the benefits of the regulation are likely to be greater than the costs, and that the proposal is the most cost-effective one available.

It is preferable, however, for ICANN to minimize its regulatory role. ICANN should hew closely to the technical functions involved in administering the Domain Name System — i.e., coordinating the allocation of IP addresses, managing the DNS root, and ensuring the stability of the DNS. This has historically been ICANN's essential mission and should continue to be so.

Written by Tom Lenard, President, Technology Policy Institute

Governments and direct influence

I know that I should explain here what ICANN and the GAC is, but this article is only of interest if you already have some background.

Over the past few years the role of the GAC, Government Advisory Committee, within ICANN, Internet Corporation for Assigned Names and Numbers, seems to have changed. Having started as an advisory board, giving an advice to the ICANN board, which can be ignored or only taken to heed in parts, GAC operates more forceful. From advice to orders it seems.

As ICANN is multi stakeholder all the way and, as most internet related organs work, bottom up and through consensus only. Perhaps the most stifling form of democracy, but democracy it is. Show up or participate remotely and your voice is heard.

In this environment governments are seeking attention for their needs and concerns over the internet. Shouldn't they ask themselves: Is this the correct place to have direct influence?

Why are governments concerned?

The internet as we know it was created outside the view and influence of governments and by the time of the commercial boom, let's say, since 1998, most western countries had liberalised the telecommunication markets. If anything was regulated it was the old telephony and access fees, not the internet.

With the rise of commercial opportunities also other opportunities arose for criminal actors, hacktivists, activists, free speech advocates, state actors, etc. The results of these opportunities concern governments (of all sorts, for different reasons) as all sorts of national interest from public safety to economic are at stake. By the time governments seriously started to look around for enforcement matters and regulations they faced a global challenge. Hence the drive to have more say on internet related policy discussions. Hence more interest in ICANN, ITU, IGF, etc., but mostly ICANN it seems. But again is ICANN the right places to have direct influence?

GAC and ICANN

What also surprises me, is that governments put all this effort into ICANN. In the end this organisation handles only one aspect of what makes the internet work. Is this because it is the best organised one? There are so much more topics and equally important ones, where there seems less involvement. The RIRs, technical internet bodies, CERT meetings, etc., are less government attended. So again is ICANN the right place to have influence?

National laws

If a government wants real influence it has to write law that is binding within its own country. It would be advisable that (several) governments coordinate on laws and regulations, e.g. the E.U., perhaps even beyond. The three times a year GAC meeting could be great for coordination. Why go national?

The internet is only as stateless as the first cable coming on/into land somewhere. Everything behind that is within a nation state. This is where influence starts or could start should a government wish to have influence.

Let's say that a government wants a ruling on:

1) a validation of (a domain name registration by) registrars and registries and resellers. It can lobby with ICANN and hope for self-regulation or it can write it in the national law;

2) abused IP addresses revocation. It can lobby with the RIRs (Regional Internet Registries) or write a regulation into national law;

3) revocation of abused domain names? Idem;

4) National organisations implementing best practices developed at the IETF, it can lobby there or oblige national organisations, e.g. ISPs, to respond and implement within six months through national law;

5) etc., etc., etc.

A national regulation, whether directly enforced or through mandatory self-regulation, would be much more effective from a government's perspective than lobbying within multi-stakeholder groups and hope for the best. Does this mean governments have to leave these groups?

A new role

I'm not claiming that governments should leave ICANN. I'm not even propagating regulatory regimes here. To the contrary, but I do think the present effort could be bettered. Governments should use ICANN meetings, and all others around the internet, to understand which topics are important, what issues are at stake, inform themselves as good as possible from all sides by asking all the right questions and to have a true understand of it all. From this understanding they can build their policies, using all that acquired information.

Policy that on the one hand aids the development of the internet and the economy while on the other assists in making it more secure. There is a fine line to walk here, but a line governments need to walk to be most effective on both sides. And, without the aid of industry it will never come about.

Conclusion

So, governments, lay down your ears and give your advice, but then go home and act on it in the best way possible. Preferably coordinated.

Written by Wout de Natris, Consultant international cooperation cyber crime + trainer spam enforcement

Although this article was first published just a few days ago, on May 8th, there have been several important intervening developments.

First, on May 10th ICANN released a News Alert on "NGPC Progress on GAC Advice" that provides a timetable for how the New gTLD program Committee will deal with the GAC Communique.ⁱⁱⁱ Of particular note is that, as the last action in an initial phase consisting of "actions for soliciting input from Applicants and from the Community', the NGPC will begin to "Review and consider Applicant responses to GAC Advice and Public Comments on how Board should respond to GAC Advice re: Safeguards" on June 20th. This will be followed by a second phase consisting of "actions for responding to each advice given by the GAC", including development of "a GAC scorecard similar to the one used during the GAC and the Board meetings in Brussels on 28 February and 1 March 2011".

In regard to how this may affect the timeline for introduction of new gTLDs, the Alert notes, "Part 2 of the Plan is not yet finalized and, with respect to some of the advice, cannot be finalized until after the review of the Public Comments due to be completed on 20 June." Thus it is impossible to know at this point in time how much delay ICANN's response to the GAC Communique may create for the introduction of new gTLDs, especially for those subject to the additional or further targeted safeguards for stings related to regulated industries and professions — although the outlook seems to generally adhere to the projections made in the article. I would guesstimate that some strings affected solely by the GAC's basic safeguards could launch in the third quarter of 2013, while those encompassed by the additional safeguards probably face delay until the last quarter of the year at a minimum. The next meeting of the NGPC takes place on May 18th in Amsterdam, where "Resolution(s) on GAC Advice" is on the agendaⁱⁱ; any such Resolutions are more likely to be procedural than substantive — with substantive reaction, much less implementation, waiting until after GAC interaction with the Board at the mid-July ICANN meeting in Durban.

Of course, regardless of how ICANN deals with the Communique, no new gTLDs can launch until the standard Registry Agreement (RA) is made final and adopted by the Board (and it may require yet further amendment to implement GAC safeguards and other advice) — and the same steps are completed for the revised Registrar Accreditation Agreement (RAA) if, as seems likely, only registrars adopting the revised RAA will be permitted to provide domain registration services for new gTLDs.

Second, on May 10th ICANN also released a video interview — "GAC Chair Heather Dryden on the Beijing Communiqué and New gTLD Advice"ⁱⁱⁱ — in which Chairwoman Dryden makes some significant assertions:

• The safeguard advice was not an attempt to impose new obligations on registry operators but about pre-existing obligations and applicable law, and should therefore be viewed as implementation rather than new policy.
• The GAC is not suggesting a new global regulatory regime but measures that are consistent with ICANN's existing role. Responding to questions posed by Brad White, ICANN's Director of Global Media Relations, Ms. Dryden explained:
• It's really not intended to impose a new global regulatory regime. It is intended to be consistent with ICANN's existing role and serve as a reminder to those that have applied of what is really involved with implementing if they are successful a string globally as well as really wanting to emphasize that some of those strings raise particular sensitivities for governments
• The GAC believes there must be a good reason to permit exclusive registrations at a generic gTLD and encourages community discussion of the proper "public interest' standard.
• The GAC does not view the Communique as 11th hour advice but as a more detailed reiteration of general advice on gTLD string categorization that was not taken. The Communique is utilization of a standard ICANN mechanism consistent with the GAC's primary role of advising on public policy aspects of ICANN actions.
• On the overarching political considerations that will color ICANN's response to the Communique — If ICANN were to ignore the GAC advice many governments would question the usefulness of the GAC and their continued participation in and support of ICANN. Ms. Dryden stated:

  WHITE: Suppose the [ICANN] board in the end says "thank you very much for the advice, we've looked at it, but we're moving on" and basically ignores a lot of that advice?

  DRYDEN: I think it would be a very immediate reaction, questioning the value of participating in the Governmental Advisory Committee. If it is going to be the place for governments to come and raise their concern and influence the decision making that occurs at ICANN then we have to be able to demonstrate that the advice generated is fully taken into account or to the maximum extent appropriate taken in and in this way governments understand that the GAC is useful mechanism for them.
  ...
  WHITE: What you seem to be saying is there is concern about whether or not some governments might pull out from that multi-stakeholder model?

  DRYDEN: Right, right why would they come? How would they justify coming to the GAC meetings? Why would they support this model if in fact it's there aren't channels available to them and appropriate to their role and perspective as a government?

• The GAC's priorities for the July ICANN meeting in Durban are the fourteen strings specifically identified as requiring further consideration, as well as implementation of the proposed safeguards. Ms. Dryden explained:
  There may well also be aspects of safeguard advice that we would discuss further with the board or with the community or would need to, particularly the implementation aspects of some of the new safeguards that the GAC identified.

Chairwoman Dryden also concedes that the GAC advice may have been misunderstood because it was developed behind closed doors and therefore deprived members of the ICANN community of an opportunity to better understand the GAC's concerns and reasoning, and she appears to pledge that the GAC will operate with greater transparency in the future.

In addition to providing useful background on the GAC's thinking, the interview also reiterates that if ICANN fails to provide adequate response to the Communique it risks disengagement from the ICANN model by GAC member nations. In addition to providing an opportunity for demonstrating effective self-regulation, reasonable implementation of the safeguards can also head off more onerous top-down legislative and regulatory approaches. Imagine, for example, if in the absence of a meaningful response by ICANN to the GAC the European Community (EC) were to adopt legislation that incorporates the safeguards as a prerequisite for the sale of new gTLD domains by registrars operating in the Community as well as for the transaction of online business with EC consumers by their registrants?

Finally, initial public comments on the safeguards have started to be posted.iv Predictably, some support various elements while others urge rejection on the grounds that the Communique consists of tardy and ill-defined changes in policy that are at odds with the multi-stakeholder model.

Notwithstanding some negative comments and related press treatment, the overarching politics of the situation will almost surely result in a very serious ICANN process for considering the proposed safeguards and other components of the Communique, and seeking to implement them in a manner that is effective but does not impose undue or inappropriate burdens on contracted parties while maintaining ICANN's role as technical manager of the DNS in a manner that respects and enforces existing public policy but does not usurp roles that belong to legislators and regulators. New gTLD applicants, other members of the ICANN community, and interested third parties have an opportunity to influence ICANN's further consideration and implementation of the GAC advice over the next several months.

* * *

NEW TOP-LEVEL DOMAINS

(Synopsis) The Governmental Advisory Committee communique and responsive requests for comments provide an opportunity for everyone involved with the Internet Corporation for Assigned Names and Numbers and every interest affected by the new TLD program to submit final input on its proposed framework for the launch of new TLDs, the author writes. The added steps will likely cause delays and impose new duties, but will also provide a blueprint for ICANN and registry operators to work cooperatively with the global public sector in decades to come.

* * *

On the afternoon of April 11, 2013, the last day of ICANN's 46th Public Meeting in Beijing, China, its Governmental Advisory Committee (GAC) issued a long and detailed communique with significant implications for the approximately 1,400 unique applications submitted to ICANN's new TLDs program — and, based upon its implementation response, for ICANN itself.

The communique — the end product of a week of intense work undertaken by more than 100 participants from governments attending and engaging in the Beijing meeting — was foreshadowed by a March 31 GAC announcement¹ that GAC meetings in Beijing would focus on "controversial or sensitive strings and applications," with sessions organized on "safeguard advice on the basis of categories of strings" and "GAC advice/objections on specific applications."

While the GAC has reverted to holding closed door meetings — excessively in our view, within an ICANN organization dedicated to transparency and accountability — during the days before the ICANN meeting and its initial days, the GAC did reach out. The GAC met with many parties, including the GNSO Council charged with TLD policy matters, the Commercial Stakeholder Group, the ICANN Board of Directors, and others.

The GAC was striving to deliver its input before the Beijing meeting concluded. The communique arrived in the middle of the Beijing Public Forum, where individuals directly address the ICANN Board on relevant topics.

The communique elicited immediate outcry from some that its proposals constituted major changes in the rules of the new TLD game after the game had begun, would cause undue delay, fostered internet censorship — and that it should be subject to public comment. But it received support from others who believe that the GAC is best positioned to address public interest issues implicated by ICANN activities. Further, many of the issues addressed by the GAC were not clearly evident until after the sheer volume and relevant specifics of new TLD applications had been fully digested.

ICANN's Unprecedented Move

In a somewhat unprecedented move, ICANN acquiesced to the call for public comments and is even requesting two separate types.

First, on April 19, new TLD applicants were advised that they were being provided with 21 days, until May 10, to respond to the GAC advice.²

That notice, as well as the official "GAC Advice Response Form for Applicants," takes a wide open approach. The notice provides no guidance on how feedback should be structured, such as whether applicants should critique the advice, outline how they intend to comply with it, or both. The attached form asks only for the applicant's name, ID number, and applied for string — followed by "Response:" and a blank space to fill.

Shortly thereafter, on April 23, ICANN published a general notice of request for public comment from any interested party on "New TLD Board Committee Consideration of GAC Safeguard Advice," with an initial comment deadline of May 14 and a subsequent reply period closing on June 4.³

The explanation of the general public comment invitation provides this background:
On 11 April 2013, the Governmental Advisory Committee issued its Beijing Communique´ in which it provided advice on New TLDs. The Board New gTLD Committee, acting on behalf of the full Board, will now consider how to address the GAC Advice. To help inform this process, the Committee has directed staff to solicit comment on how it should address one element of the advice: safeguards applicable to broad categories of New gTLD strings. Accordingly, ICANN seeks public input on how the Board New gTLD Committee should address section IV.1.b and Annex I of the GAC Beijing Communique´.

As can be seen, the scope of comment being solicited from the general public is circumscribed, with requested input limited to the portions of the communique proposing "safeguards" — although many commenters will likely ignore that restriction and address other portions as well.

Again, ICANN has provided no further refinement of the request for comment, giving no indication as to what feedback would be most useful to the Board's new TLD program committee. This unique and noteworthy approach may well result in feedback being received from parties not normally engaged with or active within the ICANN community.

Those most directly affected by the GAC advice, new TLD applicants, may well choose to participate in both their exclusive comment forum as well as this general one — especially as the reply period for the latter extends to nearly four weeks past their own May 10 cutoff date — if they are willing to make their responses public.

Potential Implications

Before getting into the specifics of the GAC safeguard advice, the following are some guesses about the implications and effects that will flow from it.

Timing of New TLD Introductions

From now until the end of the July 14-18 ICANN meeting in Durban, South Africa, the ICANN community will consider and react to the GAC Advice.

The time from Durban until the final meeting of 2013, November 17-21 in Buenos Aires, Argentina, will likely be the period of ultimate determination as to how much of it will be accepted by ICANN's Board, followed by implementation on the part of both ICANN and applicants.

ICANN's new TLD program committee, composed of non-conflicted Board members, has scheduled discussion of a "Plan for responding to the GAC advice issued in Beijing" as the only agenda item for its May 8 meeting.⁴ But substantive reaction is likely to await receipt and consideration of applicant and public feedback as well as staff analysis of both the communique and the comments.

As the GAC wants all new TLD safeguards to be subject to "contractual oversight" by ICANN it is highly probable that additional amendments to the proposed new TLD Registry Agreement (RA) will need to be drafted and put out for public comment prior to final adoption, adding some additional delay to the rollout of new TLDs.

Registry Operator Responsibilities

Acceptance of even portions of the GAC advice will likely impose duties on registry operators to update and strengthen their terms of service.

Registries will also need to submit or update Public Interest Commitments Specifications (PICS), and assume registrant monitoring and coordination duties with regulators and industry bodies that they probably did not envision or price into their business model.

Requirements that registries immediately suspend domains in certain circumstances could re-ignite "domain censorship" due process concerns that last flared during the PIPA/SOPA internet blackout.

Role of Governments at ICANN

ICANN's and key stakeholders' reactions to the GAC communique may well determine whether governments remain engaged in and embracing of the ICANN multistakeholder model — or begin to drift away.

Internet governance options exist outside of ICANN that are generally less favorable to and welcoming of contracted parties, business, and civil society. A multi-governmental shift away from ICANN would connote negative long-term implications for its existence. It could also eventually subject the DNS to a maze of disparate national laws and policies or the more worrisome specter of intergovernmental oversight far more intrusive than GAC advice.

ICANN, with the acquiescence of its multistakeholder community, will ultimately adopt a majority of the GAC recommendations in some form as doing so is in its long-term institutional interest.

Overall, the receipt of the GAC communique and ICANN's solicitation of applicant and public comments on it marks an inflection point for the organization, and the manner in which it assimilates the advice and the responsive feedback will define its working relationships with governments through the end of the decade, and perhaps beyond.

In their video interview at the conclusion of the Beijing meeting, Board Chairman Steve Crocker stated that the communique raised "interesting issues that have to be dealt with, and we'll be quite thorough about it." CEO Fadi Chehade committed that action would be taken only following consideration of public comment from the "entire community" along with staff analysis.

As it is not at all customary to subject GAC advice to direct public comment, this will be politically sensitive, complicated, and highly detailed work invoking multiple judgment calls.

New TLD Advice on Which ICANN Has Not Requested General Public Comment

The April 18 notice to new TLD applicants solicits feedback on every aspect of the GAC communique, with applicant responses to be published and provided to the full ICANN Board.

However, it is not clear whether individual applicant responses will be made public. Should any applicant respond to the GAC by seeking to file a PICS — which raises the collateral question of whether ICANN will waive the previously expired deadline for PICS submissions — those filings are made public at the updated application status page of the new TLDs website.

GAC advice affecting new TLD strings on which applicant feedback is being explicitly solicited, but general public response is not, includes:

Targeted Advice

Targeted advice against proceeding further on a specific application for .africa and one for .gcc, as well as on applications for .islam and .halal; and advice not to proceed beyond initial evaluation for two Chinese Internationalized Domain Name (IDN) strings (.shenzhen and .guangzhou) as well as the applications for .persiangulf, .amazon (and related IDNs in Japanese and Chinese), .patagonia, .date, .spa, .yun, .thai, .zulu, .wine, and .vin.

Written Briefing

The GAC's request for "a written briefing about the ability of an applicant to change the string applied for in order to address concerns raised by a GAC Member and to identify a mutually acceptable solution."

Such a briefing should also be made publicly available, as this is a critical issue for applicants and the general public because it relates to the central question of whether and the extent to which an applicant can amend its application to comply with a relevant GAC safeguard if it is adopted by ICANN.

Community Support

The GAC's view on community support for applications, in which it advises "that in those cases where a community, which is clearly impacted by a set of new TLD applications in contention, has expressed a collective and clear opinion on those applications, such opinion should be duly taken into account, together with all other relevant information."

That seems elementary, yet it fails to resolve ongoing disputes about whether or not certain strings legitimately fall into the "community" category, as well as who can legitimately claim to speak for the impacted community.

Singulars Versus Plurals

The GAC's belief that "singular and plural versions of the string as a TLD could lead to potential consumer confusion" and the consequent advice that the Board should "Reconsider its decision to allow singular and plural versions of the same strings."

This is a reaction to the February 26 decision of ICANN's string similarity panel that singulars and plurals of the same term did not create a probability of visual similarity confusion, a conclusion that many have categorized as clueless, as well as something that is likely to receive general public comment notwithstanding it falling outside the "safeguard' category.

At the Board-GAC interaction in Beijing, the Board advised the GAC that it would not second guess the Panel's conclusion and that "the ball is now in your [the GAC's] court."

The GAC has now forcefully tossed the ball back to the Board. Some ICANN constituencies have already weighed in with the view that singular and plural versions of a string should be placed in the same contention set.

IGO Protections

Reiteration of prior advice that "appropriate preventative initial protection for the IGO [Intergovernmental Organizations] names and acronyms on the provided list be in place before any new TLDs would launch."

The RAA

Advice that "the 2013 Registrar Accreditation Agreement should be finalized before any new TLD contracts are approved' with the notation that "The GAC also strongly supports the amendment to the new TLD registry agreement that would require new TLD registry operators to use only those registrars that have signed the 2013 RAA."⁵

IOC/Red Cross Protections

Strong advice that ICANN should "amend the provisions in the new TLD Registry Agreement pertaining to the [International Olympic Committee/Red Cross-Red Crescent] IOC/RCRC names to confirm that the protections will be made permanent prior to the delegation of any new TLDs.

PICs

A request for "more information on the Public Interest Commitments Specifications [PICS] on the basis of the questions listed in annex II."

These GAC-posed questions may become critical matters to be addressed, especially for applicants seeking strings in categories raising heightened GAC concerns as well as for third parties concerned by those applications. The questions raised in Annex II are addressed later in this article.

Annex I – The GAC's Proposed Safeguards

Annex 1 of the communique addresses "Safeguards on New TLDs" with introductory advice that "The GAC considers that Safeguards should apply to broad categories of strings. For clarity, this means any application for a relevant string in the current or future rounds, in all languages applied for."

The GAC is clearly stating that its advice should be interpreted and implemented broadly, not narrowly. This introduction further advises that all the proposed safeguards should "be implemented in a manner that is fully respectful of human rights and fundamental freedoms," "respect all substantive and procedural laws under the applicable jurisdictions," and "be operated in an open manner consistent with general principles of openness and nondiscrimination."

None of that seems particularly objectionable, but even this hortatory language raises such interpretative questions as to what are the "applicable jurisdictions" for a particular string — and how should operation in an open manner be squared with later admonitions relating to strings related to regulated industries and professions where domain registrations are to be circumscribed?

Safeguards Applicable to All New TLDs

The first detailed section of the advice proposes that six specific safeguards be applicable to all TLDs and "be subject to contractual oversight" by ICANN.

At a minimum, to the extent that ICANN accepts any of this it will then need to review the existing new TLD Registry Agreement (RA) — already the subject of some controversy, especially in regard to whether ICANN should have some unilateral right to amend it — and determine whether further amendments are needed to incorporate any parts of the GAC advice that are adopted.

As ICANN is not a governmental body and all of its powers over registries and registrars are derived via contractual enforcement, this is no small matter.

On April 29, ICANN published the Proposed Final New TLD Registry Agreement for public comment, open through June 11.⁶ Yet, except in the highly unlikely event that ICANN rejects all of the GAC's safeguards proposals, adoption of any of them would seem to inevitably require further amendment of the RA to spell out related, contractually enforceable registry obligations — with such further amendment triggering yet another period of public comment.

Further, as the following analysis illustrates, the question for ICANN's Board is not just whether to accept a particular safeguard but how to implement it in a manner that is effective yet reasonable. Determining the right balance will take time.

Six Basic Safeguards

The GAC's proposed six basic safeguards are:

1. WHOIS Verification and Checks

Registry operators are to conduct statistically significant checks at least twice a year on false, inaccurate, and incomplete WHOIS registrant identification data, and notify registrars of inaccurate or incomplete data.

This appears to impose proactive oversight and enforcement duties that registry operators were probably not contemplating. It also implicates matters addressed by the just-released-for-comment final Registrar Accreditation Agreement, as well as ongoing discussions focused on increasing WHOIS registrant data accuracy. All of these approaches must ultimately be reconciled and coordinated.

2. Mitigating Abusive Activity

Registrant terms of use must "include prohibitions against the distribution of malware, operation of botnets, phishing, piracy, trademark or copyright infringement, fraudulent or deceptive practices, counterfeiting or otherwise engaging in activity contrary to applicable law."

No one can be in favor of such activities, but that begs the questions of whether this imposes some affirmative oversight duty on registry operators, and what steps they should take to monitor compliance with and enforce such prohibitions. Also, in some instances the issue of whether a violation has occurred may not be discernible absent other adjudicative processes.

Trademark infringement, for example, is already the subject of the UDRP and national laws. It will also be addressed by the two new rights protection mechanisms — the trademark clearinghouse and uniform rapid suspension system in new TLDs — but all these mechanisms require some judicial or expert determination of where infringement has actually occurred.

Digital copyright infringement is an evolving and muddled area of the law in which courts in the same nation have reached sharply divergent opinions on similar fact patterns. While some "piracy' may be evident from a cursory review of a website, other alleged instances invoke unsettled legal issues. Ultimately, the question is whether registry operators should wait on law enforcement authorities or adjudicative processes to verify legally actionable harm, or take their own initiatives to identify and halt it.

3. Security Checks

In a bow to law enforcement concerns, registry operators are to periodically conduct technical analyses of whether domains are being used to perpetrate security threats "such as pharming, phishing, malware, and botnets," all the while "respecting privacy and confidentiality." Such information is already available from various industry groups, with existing registry operators typically engaged in these initiatives. In addition, the new TLD registry application process already includes security checks.

Nonetheless, this could require registries to take on proactive, quasi-police cybersecurity inquiries. More disturbingly, where security risks posing "an actual risk of harm" are identified, registry operators must notify the relevant registrar. If the registrar fails to "take immediate action" then the registry operator must "suspend the domain name until the matter is resolved."

This recommendation is almost sure to be controversial, as domain suspensions are widely viewed as equivalent to internet censorship. The notion that private parties will do this on their own accord, absent any due process requirements, and with no additional definition as to how or by whom the matter will ultimately be resolved, raises significant questions concerning registrant rights.

4. Documentation

Registry operators are to maintain statistical reports on inaccurate WHOIS records or security threats and provide them to ICANN on request. This advice does not seem particularly burdensome or controversial.

5. Making and Handling Complaints

Registry operators must have a mechanism for other parties to submit complaints about domains with inaccurate WHOIS information or domains being used to facilitate bad acts. This safeguard, motivated by growing concerns in regard to cybercrime, fraud, and abuse, is not particularly burdensome, either.

But questions remain unanswered: What is the registry operator's duty to further investigate such complaints, and what action should be taken if it finds them well-founded? Will ICANN's compliance staff have an intermediary role in this area?

6. Consequences

Registry operators must, "consistent with applicable law" — to the extent it exists or is clear — "ensure that there are real and immediate consequences for "domains with false WHOIS violations or being used in breach of "applicable law," and "these consequences should include suspension of the domain name."

Domain suspension, as was seen during the PIPA/SOPA debate, is viewed by many as synonymous with internet censorship, and the requirement that registry operators assume policing oversight powers may well generate substantial controversy. The requirement may also trigger discussion of the existence and adequacy of due process protections and a defined appeals process for affected registrants.

In sum, the six basic safeguards call for various oversight and investigative responsibilities that many registry operators may not have contemplated when they constructed their business plans.
Their implementation also may imbue registry operators with certain additional domain enforcement powers that in turn raise related due process questions.

To some extent, these recommendations may be an attempt by fiscally-strapped governments to place the costs of policing and subduing negative externalities resulting from new TLDs back onto registry operators, minimizing the need for potential allocation of substantial new public sector resources focused on law enforcement and cybersecurity.

Additional Safeguards for Particular Categories of New TLDs

Beyond those six basic safeguards recommended for all new TLDs, the GAC prescribes additional safeguards for strings related to regulated or professional sectors for which end users generally anticipate targeted protections.

The communique states:

Strings that are linked to regulated or professional sectors should operate in a way that is consistent with applicable laws. These strings are likely to invoke a level of implied trust from consumers, and carry higher levels of risk associated with consumer harm.

The dozen sectors identified by the GAC for application of these additional safeguards, accompanied in the communique by a non-exhaustive list of TLD applications asserted to fall within them, are:

children,
environmental,
health and fitness,
financial,
gambling,
charity,
education,
intellectual property,
professional services,
corporate identifiers,
generic geographic terms, and
inherently governmental functions.

One may certainly question why certain TLD applications made the GAC's nonexclusive list or have been placed in particular categories.

For example, .free, .gratis, .discount and .sale are all placed in the intellectual property category even though they might attract domains with no relationship to goods and services of a primarily IP nature. And .law is given its own separate listing rather than being placed in the professional services category along with .abogado, .attorney, .lawyer and .legal.

But, for the present purpose of this analysis, all the specifically listed applications are potentially subject to the additional safeguards depending on follow-up ICANN action. Other applicants with any possible relationship to the identified sectors should presume that they may be similarly affected before this process concludes. Those applicants, along with parties with concerns about or opposed to specific strings, should thoroughly review this advice.

Proposed Additional Safeguards for Regulated, Professional Sectors

The additional safeguards proposed for regulated and professional sectors — accompanied by some observations — are:

1. Applicable Use Policies.

Registry operators will include in their acceptable use policies a requirement that registrants comply with all applicable laws, including those that relate to privacy, data collection, consumer protection, fair lending, debt collection, organic farming, disclosure of data, and financial disclosures.

It seems axiomatic that registry operators must be in compliance with applicable laws of all types.

However, the questions raised again by such general use policies is to what extent a registry operator will be expected to proactively police and directly enforce them, and what are the applicable laws for a particular domain registrant?

What is a registry operator expected to do, for example, if a registrant is accused of operating in violation of a particular nation's laws and the registrant responds that under applicable principles for determining jurisdiction it is not subject to those laws? These are roles and decisions that have traditionally been delegated to law enforcers, regulators, and judicial forums, not to private parties lacking adjudicative expertise under contract to a nonprofit corporation.

2. Notifications.

Registry operators will require registrars at the time of registration to notify registrants of this requirement.

This is a relatively straightforward requirement to implement, although it will require registrars to identify and separate out affected TLDs and provide additional disclosures at or in close proximity to the time of domain registration.

It also highlights the fact that it is registrars, not the registry operators of new TLDs, who have direct contact and contractual relations with registrants. To the extent that registrars of particular TLDs are tasked with going beyond offering a simple domain purchase interface to registrants, and must provide and obtain acceptance of particular disclosures — much less ascertain that registrants satisfy relevant registration eligibility criteria — this will both complicate the domain registration process and generate costs that must be reflected in compensation arrangements with the registry operator as well as in the prices charged to registrants.

The only exception to the registrar standing as a separate intermediary between the registry operator and the registrant will be those instances in which the registry operator has directly affiliated with a registrar, now that ICANN has relaxed the former prohibition against such relationships — although, even then, for all but ".brand" or whatever other "closed generic" TLDs are permitted, there will likely be many unaffiliated registrars offering identical domain registration and renewal services for the TLD.

3. Security for Sensitive Data.

Registry operators will require that registrants who collect and maintain sensitive health and financial data implement reasonable and appropriate security measures commensurate with the offering of those services, as defined by applicable law and recognized industry standards.

While clearly having direct bearing on registrants at strings falling within the health and fitness and financial categories, this safeguard may also implicate others — as an example, at such professional services strings as .accountant(s), .doctor, and .realtor, where registrants will likely collect and maintain confidential health and financial data.

Again, the more difficult issues are what are the "reasonable and appropriate security measures" that registrants should implement to safeguard such data, what monitoring and enforcement duties are expected of registry operators to assure compliance, and what constitutes the "applicable law and recognized industry standards' that should be looked to in establishing relevant security measures?

The proper standards for protection and disclosure of sensitive digital data remain one of the most hotly debated matters of 21st century cyberlaw and policy, with sharp disagreements between governments and with and within affected industries — yet registry operators are being asked to require the implementation of responsive security measures by their registrants.

4. Working Relationships.

Establish a working relationship with the relevant regulatory, or industry self-regulatory, bodies, including developing a strategy to mitigate as much as possible the risks of fraudulent, and other illegal, activities.

For registry operators of TLDs falling within the listed sectors this would require an ongoing, perpetual establishment of a "working relationship" — but with whom? As one example, with what financial regulatory authorities and industry self-regulatory bodies located in which nations must the operator of .retirement establish a working relationship?

Is it to be based upon the nations to which .retirement registrants direct their activities, or must it involve global outreach so that any potential future registrant and its customers will be accommodated by an already existent working relationship? And what would comprise an effective strategy to mitigate potential fraud or other illegal activities by registrants — would this require proactive engagement, monitoring, and enforcement by registry operators, who may well be asked by regulators to establish such frontline risk mitigation activities?

Overall, this safeguard must be read in conjunction with the others, with the expectation that regulators will likely seek proactive registry operator involvement in the development and implementation of risk mitigation strategies.

Further, registry operators must take into account that a TLD is a global DNS resource. A registrant eligibility policy or regulatory engagement approach too narrowly focused on a specific nation(s) or region may well and rightly be criticized by potential registrants, consumer groups, and other public and private sector entities.

5. Single Point of Contact.

Registrants must be required by the registry operators to notify them of a single up-to-date point of contact for the notification of complaints or reports of registration abuse, as well as the contact details of the relevant regulatory, or industry self-regulatory, bodies in their main place of business.

Single points of contact are already standard practice for ISPs and web hosting companies. This safeguard again places a duty upon registry operators to obtain information from registrants with whom they otherwise likely have no direct dealings or contractual relationship. While the actual information that must be obtained — the unitary contact point for urgent notifications of reported abuse at a website — is relatively simple, the question again arises regarding whether the registry operator has a duty to validate this data on an initial or continuing basis.

Further, since this safeguard relies on the registrant to designate the contact details for what it claims to be its relevant regulatory and industry self-regulatory bodies in its main place of business, is there any duty for the registry operator to investigate whether the registrant has accurately done so? And does "main place of business" just cover the jurisdiction in which the registrant is domiciled — or all the additional jurisdictions in which it conducts or may seek to conduct substantial volumes of business with customers (e.g., a Bahamas-based .insurance registrant soliciting and conducting business in the U.S., E.U., and certain Latin American nations)?

Miscellaneous 'Gripe Site Registry Advice

In related GAC advice, applicants for the .fail, .gripe, .sucks, and .wtf TLDs are singled out to "develop clear policies and processes to minimize the risk of cyber bullying/harassment."

Such "criticism" TLDs could be particularly susceptible to such abuses — though they already exist today, often centered in "closed garden" social media platforms.

Further Targeted Safeguards

In addition to the six basic safeguards and the five additional ones for regulated and professional sectors, the GAC has also proscribed three additional safeguards for at least seven of the twelve sectors listed above — financial, gambling, professional services, environmental, health and fitness, corporate identifiers, and charity.

These additional safeguards are aimed at "market sectors which have clear and/or regulated entry requirements in multiple jurisdictions," and are applicable to some of the strings in the listed sectors — although the GAC provides no guidance as to which strings might be exempt and on the basis of what criteria exemptions might be granted or denied.

These further targeted safeguards consist of:

1. Added Checks

At the time of registration, the registry operator must verify and validate the registrants' authorizations, charters, licenses, and/or other related credentials for participation in that sector.

This verification and validation duty is placed on the registry operator, rather than the registrar who interfaces with the registrant at the time of registration. While the registry operator night prefer to delegate such responsibilities to registrars with which it has established business relationships, doing so as a thousand-plus diverse TLDs launch could prove infeasible.

Thus, there are questions of how such a process would be coordinated and the status of a registrant's registration until such time as the verification/validation duty is completed. It clearly places significant new responsibilities on registry operators — although one that is already managed by many ccTLD operators — that will entail the use of in-house or outside compliance counsel and staff.

2. Consultations With Regulators

In case of doubt with regard to the authenticity of licenses or credentials, registry operators should consult with relevant national supervisory authorities, or their equivalents.

This would require each registry operator to develop policies relating to how authenticity of credentials will be evaluated, as well as establish relationships with relevant supervisory authorities in all nations in which registrants may be domiciled or otherwise have significant jurisdictional contacts.

Again, this creates additional significant new compliance responsibilities likely to require increased staffing by both registries and ICANN.

3. Post-Registration Checks

The registry operator must conduct periodic post-registration checks to ensure registrants' validity and compliance with the above requirements in order to ensure they continue to conform to appropriate regulations and licensing requirements and generally conduct their activities in the interests of the consumers they serve.

This would place a continuing, post-registration duty on registry operators to not just confirm the regulatory compliance and licensing validity of registrants but to make a subjective judgment on whether they are conducting their activities in consumers' interests.

This raises the issue of whether it is reasonable and appropriate to place such subjective judgment responsibilities on what are primarily providers of technical DNS services. On the other hand, TLDs aiming to serve specialized communities associated with regulatory and licensing requirements may wish to accept this GAC advice and address it via responsive PICs as well as cooperative engagement with ICANN compliance staff to develop reasonable yet effective enforcement mechanisms.

Restricted Registration Policies — Limited or Exclusive Strings

In addition to the above proposed safeguards, the GAC provided advice regarding restricted or exclusive access to strings.

First, as "an exception to the general rule that the TLD domain name space is operated in an open manner registration may be restricted," with such restrictions being particularly applicable for strings subject to the extra safeguards for regulated and professional sectors — especially including those with entry requirements.

However, the GAC advice proposes that such registration restrictions be administered by registry operators "in a transparent way that does not give an undue preference to any registrars or registrants, including itself, and shall not subject registrars or registrants to an undue disadvantage."

In other words, registrant entry can be restricted, but the restrictions must be geared to the relevant risks associated with the TLD. The restrictions must also be transparent and neutral under the subjective standard of not providing an "undue preference [or] disadvantage."

What this means in practice will likely be a subject of some debate, and certainly provides an opening for any party who believes that a TLD's proposed registration restrictions seek to advance goals other than legal/regulatory compliance and consumer protection — such as granting an undue competitive advantage to a subset of potential registrants, or seeking to advance policy goals within the TLD program that more properly should fall to legislators or regulators.

The second and final bit of GAC advice in annex I addresses the controversial subject of "closed generic" TLDs, for which ICANN recently conducted a public comment period which attracted one of the largest numbers of comments in recent years.⁷

That extensive public feedback has so far resulted in no formally announced ICANN policy or position. Amazon, Google, and other business applicants from both the United States and abroad have applied for generic word domains in which they hold no trademark rights yet for which they have proposed to be the sole registrant.

Critics of "closed generic' TLDs have charged that they are fundamentally incompatible with the new TLD program's stated goal of fostering innovation and competition. Google, for one, has responded to such criticism by proposing significant alterations for four of its most controversial applications.

On this hot button subject, the GAC simply states, "For strings representing generic terms, exclusive registry access should serve a public interest goal." That statement is followed by a non-exhaustive list of strings identified by the GAC as constituting generic terms.

Registry Operator Code of Conduct

It appears that this is one bit of GAC advice that ICANN may have already taken into account.

The revised RA released by ICANN on April 29 proposes to strike the phrase "that are reasonably necessary for the management, operations and purpose of the TLD" from Section 1b of Specification 9, otherwise known as the "REGISTRY OPERATOR CODE OF CONDUCT" (COC). The proposed changes would replace the provision with authorization for the registry operator to allocate up to 100 domain names for its own exclusive use.

That deleted phrase constituted the prior parameters of the exception to the general rule that a registry operator will not register domain names in its own right — and some closed generics applicants had argued that the word "purpose" permitted avoidance of seeking a sole registrant exemption under Section 6 of the COC.

Presuming that deletion carries through the public comment and Board approval process for the revised RA, it would seem that closed generic applicants may now have no way to avoid seeking a formal exemption from ICANN.

ICANN staff provided no comprehensive explanation of the intended purpose of these proposed amendments to the evolving contractual documents, so there may well be parties who interpret this alteration differently.

The exemption language of Section 6 remains unchanged in the revised RA, and allows ICANN to grant an exemption in its "reasonable discretion" if a registry operator demonstrates to ICANN's reasonable satisfaction that:

• all domain name registrations in the TLD are registered to, and maintained by, registry operator for its own exclusive use,
• registry operator does not sell, distribute or transfer control or use of any registrations in the TLD to any third party that is not an affiliate of registry operator, and
• application of the code of conduct to the TLD is not necessary to protect the public interest.

Thus, the GAC's admonition that closed generics must "serve a public interest goal" dovetails well with the Section 6 requirement that ICANN must determine that permitting closed generic operation is not adverse to the public interest — if all TLDs that propose to have the registry operator as sole registrant are indeed required to affirmatively seek an exemption.

The matter is not fully settled, as ICANN must still determine general principles to decide when application of the code of conduct is not necessary to protect the public interest. ICANN must then apply those principles on a case-by-case basis for those proposed closed registries that can still muster a convincing rationale for exemption.

It is quite possible that ICANN might find a public purpose in protecting trademarks at the top level of the DNS for non-generic, trademarked term ".brand" TLD applications.

The revised RA contains multiple, extensive additional revisions beyond the code of conduct changes that may also be highly controversial.

For example, on May 1 VeriSign Inc. filed an aggressive comment letter on the registry agreement,⁸ complaining that:

ICANN has broadened its unilateral amendment rights even further under a new and never before disclosed Section 7.7 which permits ICANN to make changes to the registry agreement on subjects that even the consensus policies are explicitly prohibited from considering — and beyond ... Under its bylaws, ICANN is to serve the Internet community based on bottom-up, transparent decision making. Sections 7.6 and 7.7 are the antithesis of lCANN's core values. They should not become part of registry agreements.

The Governmental Advisory Committee and Commerce Dept. should rein in any such unprecedented expansion of ICANN's powers. In the Affirmation of Commitments, the DOC affirms its commitment to a private sector led, bottom-up policy development process. Sections 7.6-7.7 seek the opposite.

As one example of what VeriSign purports ICANN could do unilaterally, "without governmental oversight and over the objections of registry operators," the letter states that:

ICANN unilaterally determines that no new TLDs should be operated in a closed manner and amends the agreement to require all TLDs to be open, endangering established registry business model.

However, as discussed, governments represented on the GAC have already given consensus advice that closed registries must further public interest goals — and many parties who filed public comments on "closed generics" wanted ICANN to ban them outright.

Regardless of the final provisions of the RA relevant to closed generics, the GAC's position is now clear — a string in which the registry operator is the only permissible registrant must serve a public interest goal. As for the overall RA, the new TLD program cannot go forward until all remaining disputes are resolved and it is made final, as there must be a standard contract document for registry operators to sign before their new TLDs can go forward.

Annex II – The GAC's PICs Questions

As noted earlier in this article, in the main body of the communique the GAC requests additional information on eight PICs-related questions contained in Annex II.

These questions relate to such matters as:

• Third-party and governmental intervention and objections;
• Availability of a PICs amendment process;
• Registry and public awareness of their commitments;
• Remedies for failure of a registry operator to submit PICs;
• Enforceability of PICs, whether by contract compliance or additional means; and
• ICANN criteria for acting on the recommendations of the PICs Dispute Resolution Provider (DRP).
• Remediation methods for registration policies resulting in harm.

While PICs were originally put on the table as an optional means for applicants to demonstrate their commitment to and recognition of responsibility to operate a particular TLD in a beneficial and non-abusive manner, many applicants did not file them because the self-imposed obligations result in no offsetting application award benefit.

The new TLD program rules encourage applicants for the same string in contention sets to resolve matters among themselves. Failing that, contention sets will be settled by auction where the highest bid settles matters irrespective of PICs or other qualitative applicant commitments.

Now the GAC communique may well be pushing PICs toward the status of mandatory and enforceable guarantees. Indeed, a few months ago the United States suggested that all TLD applicants should submit PICs — especially for categories of strings for which the GAC has requested additional safeguards.

If that is the case, then ICANN will eventually need to reopen the PICs submission window. Once filed, PICs are made available for public inspection — although not direct public comment — at the new TLD current application status page.⁹

Enforcement of Accepted GAC Advice

ICANN's Board consideration of the GAC communique is now clearly underway. The process raises threshold questions of whether and how various categories of GAC recommendations will be accepted, as well as multiple subsidiary issues of consideration of public comments, modification and implementation.

While we don't yet know which of the GAC advice will be accepted by ICANN, or with what modifications or implementation details, the realpolitik's of the current situation appear to dictate that a substantial number will find themselves into the final requirements for the first round of new TLDs.

That raises the question of how the safeguards and other accepted elements of GAC advice can be implemented in a manner that is "subject to contractual oversight by ICANN."

The standard approach would be to amend the RA so that the requirements for all similarly situated registry operators are uniform. But that could well require substantial additional delay in the new TLD program — first to draft concrete expressions of broad and subjective requirements and devise appropriate enforcement criteria, and then to republish the amended RA for further public comment.

The apparent controversy being generated by the April 29 RA revision drives home the possibility of extended delay.

The alternative approach would be to reopen the PICs window and require all applicants to submit initial or revised PICs that address the GAC's safeguards and other accepted advice.

But that would place an enormous review and feedback/revision burden on ICANN staff, as well as result in significantly disparate approaches and commitments from applicants seeking to operate in the same sector categories.

If a standard approach to consumer protection and harm mitigation are the main goals then a uniform approach through RA modification would seem the best route to assuring consistent implementation of safeguards.

Realpolitik 101: Substantial Portions of the GAC Communique Will Be Accepted and Implemented

Critics of the Beijing GAC communique may well assert that it comes two years too late, imposes inappropriate and vague burdens on registry operators that negatively impact their business models, gives governments an inappropriately enhanced role in ICANN's multistakeholder process, offloads governmental responsibilities onto the private sector, and will cause further delay in the new TLD program, among other complaints.

While there is some justification for those assertions, they are also beside the point.

ICANN is a unique and inherently fragile entity — a standalone nonprofit corporation imbued with authority to manage the addressing system of the most powerful global telecommunications network ever devised, dealing with issues that routinely intrude on legal and policy decisions normally the province of national governments or multinational organizations.

While freed of formal U.S. oversight in 2009, ICANN lacks the mass and velocity to escape governmental oversight of some type. Further, with ICANN no longer under the clear protective wing of a superpower, it must forge a rapprochement with the multi-governmental GAC to assure long-term viability.
Despite its CEO's articulation of "the multi-equal stakeholder model," in ICANN world, as in Orwell's Animal Farm, some stakeholders are more equal than others.

The Beijing communique can be regarded as the completion of a four-year governmental journey within ICANN since the termination of formal U.S. oversight and its replacement by the Affirmation of Commitments (AOC). There should be no surprise that it took so long — governments are by nature reactive and risk-averse entities, and the scale of the TLD program and the unexpected issues that developed added to the response time.

GAC members arrived early in Beijing and labored long hours over the course of an entire week to produce the communique. In a way, that commitment of time and effort, and the delivery and content of the document, signaled a broad multi-governmental embrace of the ICANN model and of the new TLD program. Imagine if, instead of proposing safeguards, the GAC had announced that the perceived threats to consumer protection, intellectual property, online competition and innovation, DNS stability and security, and other potential negatives generated by the program simply outweighed the potential benefits — and that therefore it should be halted. ICANN and applicants would now be in a crisis state if that had occurred.

If ICANN were now to reject the bulk of the GAC safeguards and other recommendations there might be no immediate dire consequences. What there likely would be is a collective decision by many governments that ICANN involvement is not worth the time and expense, and a drifting away of government involvement.

If, on the other hand, ICANN now adopts, with reasonable modifications, the bulk of the GAC advice it will provide the feedback that participating governments need to justify continued engagement — as well as to defend ICANN's model within other forums.

Continued Threats From ITU

The threat to ICANN's role and existence is far from dissipated — the International Telecommunication Union (ITU) will hold its World Telecommunication Policy Forum (WTPF) in Geneva this month, and the UN Internet Governance Forum is preparing for its next meeting in Bali, Indonesia. ICANN must continue to befriend governments, not alienate them.

A general embrace of the GAC communique can help ensure ICANN's long-term support from governments and thereby its survival — and, as for most organizations, self-preservation is a high priority. The survival of ICANN, whatever its flaws, is also better for business, civil society, and other constituencies than ICANN's replacement by a DNS manager in which governments have control rather than just substantial influence.

The GAC communique and responsive requests for comments provide an opportunity for everyone involved in ICANN and every interest affected by the new TLD program to submit final input on its proposed framework for the launch of new TLDs. Yes, it will likely cause some delay; and yes, it will impose unanticipated duties and responsibilities on all registry operators, particularly those seeking to operate strings related to sensitive sectors. But it also provides a blueprint for the means by which ICANN and registry operators can work cooperatively with the global public sector in decades to come.

ⁱ http://www.icann.org/en/news/announcements/announcement-2-10may13-en.htm

ⁱⁱ http://www.icann.org/en/groups/board/documents/agenda-new-gtld-18may13-en.htm

ⁱⁱⁱ http://www.icann.org/en/news/press/kits/video-gac-advice-10may13-en.htm

^iv http://forum.icann.org/lists/comments-gac-safeguard-advice-23apr13/

¹ https://gacweb.icann.org/display/gacweb/Governmental+Advisory+Committee

² http://newgtlds.icann.org/en/announcements-and-media/announcement-18apr13-en

³ http://www.icann.org/en/news/public-comment/gac-safeguard-advice-23apr13-en.htm

⁴ http://www.icann.org/en/groups/board/documents/agenda-new-gtld-08may13-en.htm

⁵ The Proposed Final 2013 RAA was issued for public comment on April 22, with the initial and reply comment periods ending on June 4 — see http://www.icann.org/en/news/public-comment/proposed-raa-22apr13-en.htm

⁶ http://www.icann.org/en/news/public-comment/base-agreement-29apr13-en.htm

⁷ http://forum.icann.org/lists/comments-closed-generic-05feb13/

⁸ http://forum.icann.org/lists/comments-base-agreement-29apr13/msg00000.html

⁹ https://gtldresult.icann.org/application-result/applicationstatus

Copyright © 2013 by The Bureau of National Affairs, Inc.

Reproduced [or Adapted] with permission from Electronic Commerce & Law Report, Vol. 18, No. 20 (May 7, 2013). Copyright 2013 The Bureau of National Affairs, Inc. (800-372-1033) www.bna.com.

Written by Philip S Corwin, Founding Principal of Virtualaw LLC, a Washington, DC Law and Public Policy Firm

But what the industry shouldn't overlook, especially in the face of the expected critical responses this week and next, is that the Governmental Advisory Committee's (GAC's) formal advice from the ICANN Beijing meeting represents an opportunity for the domain name industry to lock-in self-regulation at a critical point in its evolution.

IFFOR has been focused for some time on the question of what registries will need to do in a world where domain names can end in any word. As such, we see the GAC advice as a simple reflection of genuine, and understandable, concerns from a body whose main job is to identify public policy issues.

It is also nothing new: IFFOR went through this exact process to find policy solutions to questions raised by GAC over the dot-xxx top-level domain. Many of the same issues are present in this most recent advice — something we highlighted at the beginning of the year.

So here is the good news: it is perfectly possible to find a simple, effective and lightweight solution that will meet the concerns of governments — including that it be contractually binding — while keeping ICANN firmly out of content regulation.

It is also possible to do it right now without compromising business plans, redrawing financial projections, or seeking hundreds of thousands of dollars in new investment.

So what is this solution?

As part of the process for reaching agreement with both ICANN and the GAC over the dot-xxx top-level domain, a set of "baseline policies" was created (by IFFOR) to demonstrate a clear commitment to resolving concerns.

Those baseline policies covered issues such as:

• Scanning domains for malware, spam and phishing
• Audit and compliance systems
• Enhanced trademark protections
• Handling complaints
• Registrant verification
• Tackling child abuse images
• Disqualifying applicants that consistently break the policies

The implementation of those policies was then left up to the registry operator — ICM Registry — and IFFOR was also given the role of auditing the subsequent systems.

In response to the GAC advice in Beijing, IFFOR is close to completing a new set of "Safeguard Policies" designed specifically to encompass the six most broad safeguards that the GAC wishes to see apply to all new gTLDs.

In so doing, we have drawn on our original "baseline policies" to develop policies for the gTLD market as a whole, and have used our experience as a registry policy body to ensure all six GAC safeguards are fully addressed.

In an effort to make this work as widely accessible as possible, we plan to simply license these policies for a low annual fee. As well as the right to use, publish and reference the Safeguard Policies, each license will come complete with documentation to help registries implement each policy in the way most suited to their circumstances. We will also extend IFFOR's internal information service that provides ongoing information on related policy and regulatory topics to all licensees. Again, for one, low annual fee.

We believe this approach solves a number of issues:

• It provides applicants with a simple, swift and low-cost answer to government concerns
• It answers government calls for new safeguards
• It builds on a contractual solution that has already been shown to work within the ICANN system
• It removes the need and cost for applicants to develop their own policies
• It keeps the new gTLD program on track

Perhaps most importantly, adopting such an approach will give the industry a chance to demonstrate that it is committed to be a good actor while retaining the flexibility to develop the right systems for the right markets in the right way.

The mark of a self-regulated market is how well it responds to issues identified by a third party. With the right mix of creative pragmatism, the GAC safeguard advice can act as a catalyst for this industry.

If you are interested in learning more about IFFOR's Safeguard Policies, please visit our website at http://iffor.org/safeguard.

Written by Kieren McCarthy, Executive Director at IFFOR; CEO at .Nxt

Directi, a global leader in Internet products and Web services, under its new brand Radix had applied for 31 strings comprising several generic and mass market names. A month back, it was announced that Directi, Tucows and Namecheap will join forces to manage the .online registry, the string which successfully cleared the initial evaluation as mentioned earlier.

"All the hard work went into exploring every minute detail in building the application has paid off. Each application was custom made as per the TLD and we didn't follow the cookie cutter approach like others", said Bhavin Turakhia, CEO of RadixRegistry.

The applications which are next in line are .hosting, .music and .city. "Apart from customizing the applications, meeting all the ICANN prescribed standards also helped us to successfully clear the Initial Evaluations", added Mr. Turakhia.

Radix, the largest applicant from the Asia-Pacific Region, is the sole ICANN gTLD applicant for the .space, .press and .host strings. Radix previously announced that it has invested $30 million in to the application process. To know more about the strings they have applied for, visit http://radixregistry.com/.

About Radix
Radix FZC is a Directi Business whose mission is to become the registry operator of a variety of top level domains. Radix will be an active participant in ICANN's process to expand the Internet naming system, and will aim to obtain rights to operate several new generic domains. Radix will leverage Directi's rich domain expertise, and will be led by an able team that has helped flourish some of Directi's existing registrar and web hosting businesses.

The registry contract (Registry Agreement or RA) negotiations have been going on for much less time and really only picked up in earnest after several registries made outspoken, sometimes angry, comments at the way they felt ICANN was handling the negotiations.

Subsequently, a registry negotiating team was set up to work with ICANN in a similar fashion to the registrars (who have been locked in negotiations with ICANN for getting on to almost 2 years now). For ICANN and new gTLD applicants, time is of the essence as the program obviously cannot launch without proper contracts in place to cover the whole domain name registration, management and distribution chain.

This impacts registries as well of course, as many of them are either applicants themselves, or working for applicants.

On April 29, ICANN's VP for DNS Industry Engagement Cyrus Namazi posted an upbeat report on the negotiations on the ICANN blog. "I am delighted to report that we have now posted a proposed final draft of the New gTLD Registry Agreement," Namazi wrote. "Similar to the proposed 2013 Registrar Accreditation Agreement (RAA) that was posted for public comment on 22 April 2013, the ICANN community is now able to review and comment on this final draft before it is approved and adopted."

Namazi's comments are clearly drafted to get the message across that all is well and that the registries and ICANN left the negotiating room as BFFs. "A new and highly spirited sense of mutual trust has catapulted us into a fresh atmosphere of collaboration," he added. "The spirit of teamwork, productive dialogue and partnership that has underpinned this negotiation process is tremendously heartwarming, as it has allowed us to bring to fruition a robust contractual framework for the New gTLD Program."

Really? In a letter sent to ICANN, senior managers at Verisign, the most powerful registry by market share, are extremely critical of the way ICANN has handled the negotiations and of the end result.

Issues appear to center around a clause which would give the ICANN Board a unilateral right to amend the contract. This has been strongly criticized by both registries and registrars, and Verisign is not happy with what it sees as a tool to allow ICANN to change the rules of engagement for its contracted parties at will.

The letter is a strongly worded as Namazi's post is lovey-dovey. So who is right? The proposed new RA was posted for public comment on April 29 for 42 days. Comments will then be collated and summarised for the ICANN Board, so that it can decide whether to approve the contract or not.

This is a major test for today's ICANN. On the one hand, it needs to show that it can control its supplier chain and provide Internet users with a safe and stable environment. But it also needs to show that it can provide the businesses in the domain industry with such an environment, especially with an expected 1,200 new TLDs coming online in the next few years. And lastly, ICANN needs to show that the bottom-up policy development process that gives it its unique position in the world of Internet governance is sacrosanct. Right now, the registries seem to think that ICANN is ready to throw the model under the bus whenever it suits its own devises.

Written by Stéphane Van Gelder, Chairman, STEPHANE VAN GELDER CONSULTING

Specifically at issue is ICANN staff's unilateral decision to adopt the "trademark +50" proposal for new domains, which would provide trademark holders who have previously won a UDRP or court decision with rights to 50 additional derivations of their trademark in ICANN's Trademark Clearinghouse (TMCH). Under staff's plan, large trademark holders that register in the clearinghouse will be provided thousands of derivations of their trademarks since each separate country's registration of the same trademark provides the brand owner with an additional 50 entries in the TMCH.¹ Entries in the TMCH trigger infringement warning notices to domain name registrants which can lead to increased liability for registrants, discourage lawful registrations, and chill speech on the Internet.

ICANN's bottom-up community-developed process for creating policy had approved of a TMCH model that allowed "exact matches" of trademarks only to be placed in the TMCH. In 2007, ICANN's GNSO Policy Council, including representatives from the Intellectual Property and Business Constituencies, approved the GNSO recommendations that created special protections for trademark rights by a supermajority vote.² As part of the multi-year consensus process, both the subsequent Special Trademarks Implementation (STI) Team and the Implementation Review Team (IRT) considered the issue of providing rights to exact matches or additional derivations, and both community-developed teams specifically opted for exact matches only to be placed into the TMCH. ICANN's CEO testified before U.S. Congress in 2012 that expanding the scope of the TMCH further would be inappropriate since it would create new rights that do not exist in law and ICANN should not be creating unprecedented rights.³

Many months after the final TMCH model of exact matches only was published in ICANN's Applicant Guidebook and new domain businesses relied on it when filing their applications, ICANN's Intellectual Property and Business Constituencies lobbied ICANN's new CEO to make drastic changes to the community-developed policy and grant additional trademark rights in the TMCH.

After the October 2012 Toronto ICANN Meeting, a "strawman solution" was proposed by ICANN's new CEO which included a number of IPC/BC's substantive policy proposals to give trademark holders additional privileges in the domain name system, including changing the exact matches only standard approved of by the community.

Yet ICANN's CEO recognized that expanding the scope of the trademark claims service was a policy matter requiring GNSO Council guidance, as he stated on his blog⁴ in December 2012; and the CEO did write to the GNSO Council to request guidance on this policy proposal. Under ICANN's Bylaws, staff may not change GNSO-approved policy, except under a strict process that involves consulting with the GNSO and a 2/3 vote of the Board of Directors.

NCSG filed comments on the proposed policy changes and warned against re-opening previously closed consensus agreements and circumventing ICANN's stated bottom-up policy development process.⁵ In addition to the flawed process for adopting this policy, NCSG also detailed substantive concerns with staff's proposal to expand trademark rights beyond anything that exists in trademark law. It came as no surprise that only members of the IPC and BC supported the strawman proposals in ICANN's comment period.⁶

In the GNSO Council's February 29, 2013 response to the CEO regarding the proposal to expand the scope of trademark claims, the GNSO Chair wrote, "the majority of the council feels that proposal is best addressed as a policy concern, where the interest of all stakeholders can be considered."⁷ Thus the GNSO Council also determined this specific proposal to be a policy matter, requiring consultation from the entire community before such a change could be made to existing GNSO Council approved policy.

Yet with only an email sent on 20 March 2013, ICANN staff announced in an attached memorandum that it would expand the scope of the trademark claims service to give trademark holders rights to 50 additional derivations of their trademark, in contradiction to GNSO developed policy of exact matches only and the subsequent requested GNSO Council guidance on the matter.⁸

Staff's only explanation for such a drastic shift in the creation of new rights: "this proposal appears to be a reasonable add on to an existing service, rather than a proposed new service". Thus with a single line of evasive text, years of hard-fought community consensus policy was brushed under the rug and the new era of policy development via ICANN staff edict was solidified.

On 19 April 2013 NCSG filed this Request for Reconsideration of the staff decision because ICANN did not follow its stated process for changing GNSO-approved policy. If ICANN wants to deviate from Supermajority GNSO-approved policy, it must follow the process outlined in the organization's Bylaws, Annex A Section 9.⁹ As an organization that holds itself out as a champion of the bottom-up policy development process, ICANN is obligated to comply with community-developed policies, unless the Board of Directors can muster the necessary 2/3rd vote to over-turn the community decision. That mandatory process was not followed by ICANN's staff or Board in over-turning the community-approved policy in favor of staff's policy to expand the scope of TMCH.

ICANN's Board Governance Committee has thirty days in which to make to a recommendation to ICANN's Board of Directors regarding the NCSG's Request for Reconsideration or report to the Board on why no final recommendation is available and provide a timeframe for making a final recommendation on the matter. ICANN's entire Board should consider the recommendation of the Board Governance Committee at its next regularly-scheduled Board meeting.

Under Article IV Section 2 of ICANN's Bylaws, the Request for Reconsideration process is a mechanism intended to reinforce ICANN's accountability to the community for operating in a manner consistent with its Bylaws.¹⁰ Because the staff's unilateral decision to change GNSO-approved policy was not consistent with ICANN's Bylaws and contradicted ICANN stated policy, NCSG filed the Request to correct the error and bring ICANN into compliance with its Bylaws and stated policies.

NCSG requests that the Board reinstate the community-developed policy of giving trademark holders rights to include exact matches of their trademark only in the TMCH, which was the policy stated in ICANN's Applicant Guidebook when ICANN accepted applications for new domains.

• NCSG's Request for Reconsideration (PDF)
• Attachments to NCSG's Request for Reconsideration (PDF)
• ICANN Website on Requests for Reconsideration

¹ http://domainincite.com/...

² http://gnso.icann.org/en/issues/new-gtlds/...

³ http://www.internetcommerce.org/ICANN_Amnesia

⁴ http://blog.icann.org/2012/11/a-follow-up-to-our-trademark-clearinghouse-meetings/

⁵ http://ipjustice.org/wp/2013/01/14/...

⁶ http://forum.icann.org/lists/tmch-strawman/msg00096.html / See also:
Comments of Registrar Stakeholder Group
Comments from New TLD Applicant Group
Comments of Non-Commercial Stakeholder Group
Comments of the Internet Service Provider Constituency
Comments of Public Interest Registry

⁷ http://gnso.icann.org/bitcache/...

⁸ http://newgtlds.icann.org/en/about/trademark-clearinghouse/...

⁹ http://www.icann.org/en/about/governance/bylaws#AnnexA

GNSO Policy Development Process

Section 9. Board Approval Processes. a. Any PDP Recommendations approved by a GNSO Supermajority Vote shall be adopted by the Board unless, by a vote of more than two-thirds (2/3) of the Board, the Board determines that such policy is not in the best interests of the ICANN community or ICANN. If the GNSO Council recommendation was approved by less than a GNSO Supermajority Vote, a majority vote of the Board will be sufficient to determine that such policy is not in the best interests of the ICANN community or ICANN.

b. In the event that the Board determines, in accordance with paragraph a above, that the policy recommended by a GNSO Supermajority Vote or less than a GNSO Supermajority vote is not in the best interests of the ICANN community or ICANN (the Corporation), the Board shall (i) articulate the reasons for its determination in a report to the Council (the "Board Statement"); and (ii) submit the Board Statement to the Council.

c. The Council shall review the Board Statement for discussion with the Board as soon as feasible after the Council's receipt of the Board Statement. The Board shall determine the method (e.g., by teleconference, e-mail, or otherwise) by which the Council and Board will discuss the Board Statement.

d. At the conclusion of the Council and Board discussions, the Council shall meet to affirm or modify its recommendation, and communicate that conclusion (the "Supplemental Recommendation") to the Board, including an explanation for the then-current recommendation. In the event that the Council is able to reach a GNSO Supermajority Vote on the Supplemental Recommendation, the Board shall adopt the recommendation unless more than two-thirds (2/3) of the Board determines that such policy is not in the interests of the ICANN community or ICANN. For any Supplemental Recommendation approved by less than a GNSO Supermajority Vote, a majority vote of the Board shall be sufficient to determine that the policy in the Supplemental Recommendation is not in the best interest of the ICANN community or ICANN.

¹⁰ http://www.icann.org/en/about/governance/bylaws#IV

Written by Robin Gross, Founder and Executive Director of IP Justice

The side effect of introducing new TLDs is that the legacy TLDs will be making changes to make sure they are competitive against the new TLDs. This means they will be relaxing restrictions and opening up unused namespaces at the second and third-levels. Many of these will follow a Sunrise or Grandfathering process as a way to implement the changes.

Already three existing TLDs (one sTLD and two ccTLDs) have announced such policy changes and decided they would like to utilize the TMCH Sunrise tokens for their Sunrise Period. This includes .Jobs, Radio.AM and Radio.FM. Donuts, the largest applicant with over 300 TLD applications, have also indicated they will use the Sunrise token from the TMCH for a universal blocking service called Domain Protected Marks List (DPML).

All this is happening before the TMCH has even supported its first new TLD. While ICANN has welcomed the use of TMCH by .Jobs, it remains to be seen if ICANN will also welcome use of the TMCH by ccTLDs.

The eventual benefits and viability of the TMCH will hinge on a few factors:

• Will trademark owners even use it?
• Will the main driver be participation in Sunrise or Claims?
• Will other existing TLDs want to use it?

Will Trademark Owners Even Use it?

It is a given that trying to participate in every future Sunrise Period would overwhelm the budgets of nearly every trademark owner. Every sage legal advisor is counseling that the trademark owner must be ultra-selective about which Sunrise Periods they engage in.

On the other hand, a review of the Trademark Agents published on the TMCH website show a good number of law firms have already advanced the TMCH the minimum $15000 required to be an Agent. If this trend continues, then it is a clear indicator that law firms will aggressively market the TMCH to their clients. (Disclosure: My firm, TM.Biz is offering a portal for these Trademark Agents).

Will the Main Driver Be Participation in Sunrise or Claims?

Trademark Claims provides some protection in every new TLD. But it is for exact matches only and only for the first 90 days. This forces trademark owners to also subscribe to a watching service that catch confusingly similar registrations not caught by the Claims service. I predict trademark owners will elect to do both Claims and watching to ensure they catch domains that might confuse their customers.

Will other existing TLDs want to use it?

There are actually two parts to the TMCH. The validation service is performed by Deloitte and CHIP. They are issuing Sunrise tokens called Signed-Mark-Data (SMD) files to trademark owners as proof that a trademark has satisfied the requirements for the typical Sunrise Period. The Database Administrator for the TMCH is IBM. They actually help Registries and Registrars operate the Sunrise and Trademark Claims Periods. The validation service initially launched on March 26. The database part is expected to launch in July.

But there are applications for just the TMCH Sunrise tokens that do not require IBM to be used. This is because the SMD file is portable. For example, any country-code TLD who decides to change their policies and wanted to conduct a Sunrise Period first, could accept SMD files from trademark owners.

Also, any TLD that wanted to accept SMD files for a new Rights Protection Mechanism, as Donuts is planning; also do not need IBM in the process.

The .Jobs Sunrise Period

The .Jobs TLD has decided to eliminate the current restriction that .Jobs domain names must match company names. This means that product and division names will be eligible for .Jobs. Before this change takes effect, .Jobs will first conduct the Sunrise Period that is designed for new TLDs. .Jobs will utilize both parts of the TMCH. Thus they need to wait for IBM, their Back-end Registry and Registrars all to be operational before they can conduct their Sunrise Period.

The Radio Global Domains

The .AM and .FM ccTLD's, have long been re-purposed for the Radio industry. They are now introducing new namespaces, called Radio Global Domains, which are designed to target new market segments within the Radio industry. These will be radio.am and radio.fm. Before these changes take place, they will also undergo a Sunrise Period starting May 28. Validation for the Radio Global Domains Sunrise Period will be performed on either trademark data or the Sunrise tokens called Signed-Mark-Data (SMD) files issued by the TMCH. All this is happening without the need for the involvement of IBM, or even for Registrars to support the new protocols required for the new TLD Sunrise Periods. (Disclosure: My firm, TM.Biz will be handling the trademark validation, SMD validation and direct submission of Sunrise registrations to the Registry).

It is still an open issue whether the TMCH will be capable of issuing SMD files by May 28 for use by the Radio Global Domains. Or if the TMCH is capable of issuing SMD files by this date, whether ICANN will allow the TMCH to release the SMD files so that the ccTLDs can use them.

There are no doubt other ccTLDs that are interested in changing their registration rules and restrictions that might consider holding a Sunrise Period first. I predict that these ccTLDs would be interested in using the SMD files as well, if allowed by ICANN.

Additional Rights Protection Mechanisms

The largest TLD applicant, Donuts, is also planning to accept SMD files for its universal blocking service called Domain Protected Marks List, or DPML. As applicant of over 300 TLD's, with half of those uncontested, a DPML represents a good value for trademark owners.
There may be other applicants that decide to offer new Rights Protection Mechanisms that utilize the SMD file.

Hopelessly Optimistic

The Trademark Clearinghouse has enormous potential to support the domain name industry. The portability of the SMD files enables many uses that were not originally envisioned by its creators. Certainly, the days of a TLD manually checking trademark databases should be coming to an end with SMD files becoming the new de facto standard for trademark validation. It will be interesting to see how this evolves over time.

Written by Thomas Barrett, President - EnCirca, Inc

Here is a quick summary of the changes:

Auction prices:
Several bidders wanted a bit more certainty about how prices will be set. In response, we commit to setting the first round prices exactly as proposed (min price is 0, max price is $50,000 * number of bidders). Further, if all bidders are still bidding in the second round, then second round prices will be exactly as proposed (start price + 10% * number of bidders).

Information transparency:
We received balanced comments on the new information policy, which indicates that we found a decent compromise. In particular, most applicants accepted that preserving winning bidders' privacy by not disclosing exact winning prices was a worthwhile goal. To make this provision meaningful, we will comply with one applicants' request to contractually obligate applicants to keep the winning price confidential.

Timeline:
Finally, applicants felt that a 2-day auction was too short and that more time should be allotted to ensure that all bidders have time to familiarize themselves with the system and the process, and to think through how to bid. To accommodate this, we will make two changes:

a) As originally planned, we will offer a voluntary mock auction 3 days before the auction, scheduled for Thursday May 23rd. This will be run exactly as the real auction except that the results have no meaning, and the schedule will be heavily accelerated. We encourage all bidders to participate - the mock auction is a good test to make sure that you have the right login credentials and know how to place bids.

b) we will plan for the auction to take 3 or 4 days. The first auction round will be on May 28th and will last for 24 hours, as before. For subsequent rounds, we will do our best to set a schedule that reflects actual bidders' time zones. Rounds will last 2 hours initially, but if bidding activity during the auction indicates that not that much time is needed, we may shorten the rounds. In no case will the rounds be shorter than 30 minutes.

Deposits:
We will not allow bidders to increase their deposit during this auction. The reason is that the auction will be relatively short (4 days), that we would like to keep the first auction simple. We are open to changing this for future auctions.

A small change to mitigate order of magnitude error:
Finally, a small addition to the terms. In any round after Round 1, bidders may bid up to 9 times the Start Price of a round, or Minimum Price to Continue of a round, whichever is higher. This helps protect bidders from accidentally adding an extra "0" when typing in their bid."

We hope that these rules will be acceptable to all interested bidders and maximize participation. Any bidders who do not find these terms workable for them are invited to comment and participate in one of our future auctions. Those interested in participating in the first auction and receiving legal documentation and login credentials for the mock auction should register their interest on our website.

Written by Sheel Mohnot, Consultant

At the meeting, ICANN's Government Advisory Committee (GAC) released its formal advice on new gTLDs. The GAC made a number of points to the ICANN Board including:

• A request to further review a specified list of strings and present advice at ICANN 47
• Six specific contractual safeguards that should be placed on all gTLDs, including WHOIS verification and abuse mitigation
• Contractual safeguards that should be placed on particular categories of TLDs, including consumer protection, sensitive strings, regulated markets and those with restricted registration policies
• Urging the ICANN board to reconsider its decision to allow singular and plural versions of the same strings

GAC advice is becoming the single biggest area of uncertainty for new TLD applicants. It not only appears to adjust requirements approved by the community in the Applicant Guidebook, it also is evolving with each new communique.

One reporter noted, "It looks like at least 517 new gTLD applications [may] be affected by the GAC's advice." I'm sure there will be many more discussions about this topic.

Registrar Accreditation Agreement (RAA) and Registry Agreement

ICANN CEO Fadi Chehade announced newly revised versions of both the 2013 Registrar Accreditation Agreement and Registry Agreement, which are now posted for public comment. ICANN is looking at ways to keep the debate over these contracts from delaying the overall application process.

Trademark Clearinghouse

Earlier, in March, the Trademark Clearinghouse (TMCH) opened. TMCH allows brand owners to submit their trademark data into one centralized database, prior to and during the launch of new gTLDs. Since opening, the pace of sign-ups by both individual mark owners and agents has been rapid, ensuring the long-term success of the TMCH project.

With ICANN 47 in Durban, South Africa coming up in mid-July, many of these subjects will continue to be discussed and, hopefully, resolved in the weeks ahead.

Written by Roland LaPlante, Senior Vice President and CMO at Afilias

.PW, launched as "the Professional Web", was available for General registrations from March 25, 2013 with a strong distribution channel of 120+ ICANN Registrars including Network Solutions, Web.com, Tucows, Name.com, eNom, Xinnet & Namecheap. The registry saw more than 4,000 .pw domain registrations within 30 minutes of its launch, making it the most successful TLD launch post .XXX.

"Our goal was 100,000 names for the first year. Considering that no competing extension had come anywhere close to achieving 100,000 names in the first year, it was a goal that most considered ambitious. The feeling of achieving 50% of the goal within the first three weeks is surreal. The team put together and executed a brilliant marketing plan. We are eagerly looking forward to leveraging this experience for our new gTLDs", said Bhavin Turakhia, CEO, .PW Registry & Radix Registry.

.PW also bagged some respectable premium name deals with two single character names going for $8,000 each. The company now intends to release all its reserved premium names through BIN sales at BuyDomains and themed auctions at NameJet.

About Directi:
With over a decade in the internet industry, Directi is a $350m+ group of businesses, providing various web products and services to millions of global users. Directi businesses include ResellerClub, LogicBoxes, BigRock, Skenzo, Media.net and Radix Registry. Over 1000 employee strong, Directi currently has 5 offices across 4 countries. Directi businesses rank amongst the fastest growing businesses worldwide in their corresponding industry segments. For more information, please visit http://www.directi.com.

Most importantly, we realized that more than just an escrow agent is needed for the success of a private auction of this scale, and we have partnered with Morrison & Foerster, LLP, a global law firm, who will be acting as the neutral party for our auctions.

We had the opportunity to talk to many applicants in Beijing last week, and we received some great feedback and suggestions. We have distilled these conversations into a more detailed proposal, covering the schedule, policies on which information is published and which is kept confidential, the procedure for handling withdrawals, the handling of bid deposits, and more.

Although many applicants have been asking us to hold an auction as soon as possible and several have already committed to participate in the first auction, we would like to give all applicants a chance to review the proposal and submit final comments, until Thursday this week (11pm UTC).

Based on the applicants' input, the final schedule and rules for the first auction will then be published by Tuesday, April 30, and applicants interested in participating can then sign up their TLDs in an online enrollment system.

We have summarized some of the suggested changes below, and we encourage participants to take a look at the full RFC and send us comments:

Schedule:

We propose beginning Thursday, May 2, with publication of the auction rules and other legal documents, and we plan to hold the auction on Thursday, May 23. Interested parties will need to commit online by May 8. Dates are subject to change with input from participating applicants.

Information policy:

As presented in the workshops, all bidders participating in a given auction can see the number of bidders still bidding for a domain in each round, for all domains being auctioned. However, the winning price is not disclosed to all bidders; only bidders for a particular domain can see the price at which the domain was sold. Amounts of bids and deposits will be kept strictly confidential.

Withdrawal procedure:

Several applicants asked: What if I don't win in the auction, and, as required, I withdraw my application, but some of my fellow non-winning competitors don't? We took this concern very seriously and propose the following solution:

Before the auction, bidders irrevocably authorize the neutral party to request a withdrawal with ICANN on their behalf. In addition, bidders that do not win are required to withdraw their applications via ICANN's online system and send a screenshot to the neutral party, along with a withdrawal statement signed by bidder and two witnesses confirming that the seller performed the withdrawal. A bidder who does not submit proof of withdrawal will forfeit their deposit, and Morrison & Foerster LLP will take legal steps, if necessary, to execute the withdrawal. For bidders who do submit proof, the deposit is held until the neutral party has ensured that the withdrawal took place. ICANN has assured us that withdrawals will be made public within 48 hours, and the neutral party will not release any payments or deposits until withdrawals have been confirmed by ICANN.

Deposit:

Each applicant must make a deposit of at least 20% of the maximum amount the applicant would like to be able to bid, as noted previously. The deposit must be at least $80,000. The purpose of the minimum deposit is to help ensure that bidders who didn't win in the auction withdraw their application. To level the playing field for single-domain applicants who had requested this, we also made an important change from the previously proposed policy: the effective deposit does not increase if participant becomes a seller for a TLD, and payments received from one TLD cannot be used to pay for another TLD within that auction. Applicants who are participating in the auction with more than one TLD must make the minimum deposit for each TLD.

We hope that the procedure we proposed adequately captures the feedback we received from applicants. Overall, there were surprisingly few topics on which we had to come up with a compromise; in most cases, applicant's preferences were in agreement. Where we did have to find a balance between different perspectives, we hope we have found solutions that will satisfy all applicant's concerns.

We look forward to receiving comments to the Request For Comments posted on the applicant auction website.

Written by Sheel Mohnot, Consultant

Many TLD applicants are likely to respond to the GAC Advice in a manner that is like story telling: Based on a mixture of fiction garnished with some facts from their applications, applicants will write savvy responses with only one aim — to calm down the GAC's concerns and survive the GAC Advice storm. The "duck and cover" strategy.

Background:

According to the Applicant Guidebook, material changes to applications need to go through a Change Request process. In contention sets Change Requests that are advantageous to a specific applicant are not likely to pass due to competitor's opposition. Even in non-contentious cases Change Requests may not pass, as they could be anti-competitive. Also, the permanent opportunity for applicants in contention sets to amend their applications (by PICs, Change Requests or by the response to a GAC Advice) raises serious anti-competitive questions, as there is very limited space to make changes to an application according to the Applicant Guidebook.

Proposed solution:

No fiction — only facts! Applicants who have not been able to determine privacy issues, consumer protection issues or other issues associated with their TLD application over 12 months after filing their application raise serious concerns whether they are the appropriate entity to operate a TLD.

2. Prediction: Pass the hot potatoes, Joe.

Close to no decisions will be made to reject applications that are included in the GAC Advice. It is to be expected that only a handful of applications, where there is overwhelming support for a rejection (such as those in IV 1. In the Beijing Communiqué), will actually be rejected. This might happen due to legal and liability issues or simply lack of a clear-cut process

Background:

Governments demanded instruments — namely GAC Early Warning and GAC Advice — to prevent applications they were unhappy with. Now the GAC filed an Advice for more than 500 applications, asking for more security, more accountability and more appropriate operation of regulated industries TLDs, among other issues. According to the Applicant Guidebook, the consequence of not fulfilling the GAC Advice (without the option to distort the application to an noncredible extent) would be a dismissal of the gTLD.

Unfortunately, the current GAC Advice process poses loopholes for all parties involved which offer the chance not to be responsible for this dismissal but instead not make any decision at all. This could be the next occasion where ICANN does not serve the Public Interest and the Community but those that play hardball in this application process by their lobbying and financial power.

Proposed solution:

GAC and ICANN Board should accept the responsibilities they asked for!

3. Prediction: Time and tide wait for no man.

GAC Advice has to be executed before contention resolution for applicants in contention sets starts. Otherwise an applicant might succeed in the Contention Set who will be thrown out because of GAC Advice later in the process. This timing would not make sense.

Background:

The GAC Advice process should take into account the process and timing of the whole Application Process. The process following the execution of GAC Advice has to be finished before the Contention Resolution Process is being initiated. Otherwise an applicant who is willing to provide the safeguards being asked for in the GAC Advice may have been eliminated in the process (e.g. by an auction), while the winner of the Contention Resolution is an applicant who is not willing to abide by the GAC Advice. A TLD could then not be awarded at all although a suitable candidate was in place, making the GAC Advice meaningless.

Proposed solution:

Don't wait! We have attached a detailed proposal (PDF chart here) for the harmonization of the GAC Advice process with the New gTLD Application Process. The chart clearly demonstrates how both processes may run in parallel and come together before the contention resolution.

Written by Dirk Krischenowski, Founder and CEO of dotBERLIN GmbH & Co. KG