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NTIA Objects to Planned o.com Auction

Agency asserts interest in trademark protections for Internet's largest domain name registry

According to media sources, the National Telecommunications and Information Administration (NTIA) wrote to Verisign last Friday, objecting to the company's plan to auction o.com to the highest bidder. The planned release for o.com — described by the Second Amendment to the .com Registry Agreement and intended as a pilot for the remaining reserved single-character .com names — involved an opaque consideration process that ignored community input and set aside hard-won trademark protections developed by stakeholders in order to maximize dollars earmarked for an unidentified cadre of non-profit organizations.

The two-page letter asserts that:

  1. NTIA retains rights pertaining to single-character .com names stemming from the fact that it was the U.S. Government which required single-character names at the second-level to be reserved from initial registration in 1993;
  2. the release of o.com, and presumably the other remaining reserved .com single-character names, requires NTIA approval; and,
  3. such approval is likely to be withheld unless the release procedure incorporates "policies, procedures, and protections used for all domain names."

This last point vindicates the position of the Intellectual Property constituency (IPC) and other stakeholders that specifically called for the implementation of the Trademark Clearinghouse and Sunrise Period mechanisms that were created to protect brand owners and trademark registrants. The omission of these hard-won protections can't be considered an oversight because it was quite deliberate. The views of the IPC and others were offered during yet another example of the kangaroo court-style of public comment period that seems to be ICANN's new normal and where community input is solicited only to fall upon deaf ears before hitting the circular file.

In this case, ICANN's board dismissed intellectual property rights protections as inapplicable because the .com Registry Agreement is, among other things, a decaying relic from prehistoric times that predates the development of modern safeguards for intellectual property rights online. ICANN's board also cited as precedent the release of .biz (2008), .info (2010), and .org (2011) single-character reserved names without a sunrise period — it's a little surprising that the board seems to have forgotten that sunrise periods didn't exist until 2013. But it's difficult to be too surprised considering that when asked about the vote to approve the o.com auction at ICANN's Kobe meeting, a number of board members didn't recall the issue being raised in the first place, let alone voted on.

Given the propensity of Verisign and ICANN to seek absolution in the loopholes of an obsolete legacy agreement, stakeholders might have a brighter future if they follow their lead and stop asking for what isn't in the .com Registry Agreement and get laser-focused on what is — particularly those elements that a federal appellate ruling says "unlawfully restrain trade." In the meantime, NTIA's timely intervention reinforces the position taken by the IPC and others that the release of o.com — along with the other remaining single-character .com names — must be subject to the same procedures, policies and protections as every other newly available domain name.

NTIA's concerns mostly pertain to the charitable contributions, possibly constituting a price that exceeds what is currently allowed by the Cooperative Agreement and that this would require explicit NTIA approval. The agency further questioned whether the compensation for auction vendors would also exceed the allowable wholesale price for .com domain names.

The gravity of the letter is greatly expanded by considering that it was signed and sent last Friday by NTIA's then-acting administrator, Adam Candeub, who has since been tapped by the White House for a new role as Deputy Associate Attorney General — a Justice Department job which oversees the Antitrust Division, among other things. It is counter-intuitive to assume that he would abandon such recently demonstrated interest in these issues after being elevated to a role that offers such greatly expanded opportunities for addressing them.

Another factor is the potentially shortened timeframe to effect solutions. January 20th is likely an important inflection point for Mr. Candeub and, thus, should be seen similarly for Verisign and ICANN as well. Ignoring NTIA's letter or trying to run out the clock would be myopic and risks drawing greater scrutiny from DOJ and others that could carry over into the next administration — which isn't far-fetched considering the president-elect was Vice President when the 2012 price cap was imposed. Any expanded inquiry would necessarily seek to know the motives of two organizations that, on paper at least, have no interest, rights, or standing for these single-character names beyond the maximum allowable price of $7.85 — in essence, it would become necessary to determine why ICANN and Verisign accepted such rapidly ballooning risk by seeking so mightily to deny the rights of others for something that they themselves hold no rights to whatsoever?

Albert Einstein once said that "problems cannot be solved with the same thinking that created them." However, given these evolving circumstances, it doesn't take a rocket scientist to know that hoping intransigence will result in an outcome other than a full competition review of .com — a long-overdue follow-up to DOJ's 2012 analysis which has already been requested by U.S. Senators Ted Cruz and Mike Lee — is putting a lot of shareholder value at risk for a gamble that, in retrospect, will be seen as arbitrary and capricious.

Besides — hope is not a strategy.

By Greg Thomas, Founder of DNSDecrypt – Greg Thomas is founder of DNSDecrypt and author of How to Save the Internet in Three Simple Steps: The Netizen’s Guide to Reboot the Root. The views expressed in this article are solely those of Greg Thomas and and are not made on behalf of or for any other individual or organization. Visit Page

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Comments

Sunrise Periods have been around By Jeff Neuman  –  Dec 19, 2020 12:53 am PDT

Just a correction for Mr. Thomas.  Although the Trademark Clearinghouse (as we know it today) did not come into existence until the 2012 round of new gTLDs, the fact is that both the Sunrise Policy and Trademark Claims services had been around for more than a decade by the time the new gTLD round launched.

The Sunrise Policy was first implemented by Afilias during the .info rollout in 2001.  The policy at the time relied on trademark owners self-certifying that they had trademark rights rather than having them verified by a Clearinghouse.

While working at Neustar, I conceived of the Trademark Claims process (called IP Claims at the time) in NeuLevel’s (then called JVTeam) proposal to operate .biz in 2000.  When NeuLevel was selected to be the operator of .biz, it implemented the IP Claims process together with a system we created called “STOP”, the Start-up Trademark Opposition Policy.

The first validated Sunrise process was implemented at Neustar for the .us TLD (overseen by NTIA) which verified the trademark owners’ rights prior to awarding the trademark owners’ the corresponding second level names.  Sunrise Periods were also implemented for .Asia, .tel, .travel, .xxx, and others gTLDs awarded in the 2000 and 2005 rounds.  .co also used a Sunrise period when it launched in 2009 or 2010.

I am not commenting on whether the ICANN Board did or did not do the right thing, but rather your statement that “sunrise periods did not exist prior to 2013.”

Thank you for your comment and providing By Greg Thomas  –  Dec 20, 2020 1:31 am PDT

Thank you for your comment and providing additional historical detail.  I was trying to point out that IP rights protection mechanisms, or RPMs, weren’t anything that might have been considered standard prior to being published in the New gTLD Applicant Guidebook and therefore it isn’t that surprising that RPMs weren’t enforced.  But my imprecise over-generalization shouldn’t distract focus from the IPC’s position, and which was reinforced by NTIA’s recent letter, that RPMs are now standard operating procedure in the DNS for all newly available domain names. There are no special exceptions created by an outmoded contract vehicle that has become stuck in the Jurassic period and prevented from being updated because of an anticompetitive presumptive renewal clause — that, not incidentally, wasn’t developed by the community, as the RPMs are, but is, instead, the product of a legal settlement agreed to by ICANN in exchange for a cash settlement and to end litigation. Such a special exception is the very definition of anticompetitive behavior.

By way of further illustrating the particulars of this matter, I’d point readers to a 2009 comment posted on TheDomains blog in 2009 which said,

The very heart of the CFIT litigation is a charge that VeriSign has been operating .com under a contract secured by violating the law, and that ICANN set aside its responsibilities to registrants and registrars in exchange for disposing of the litigation brought against it by VeriSign in exchange for a multi-$million payment (and there is no dispute that they received those funds).

The commenter was then-general counsel of the Internet Commerce Association and is now a Policy Counsel for Verisign, Phil Corwin. 

Thank you for your comment and taking the time to provide additional detail on this very important matter.

Media sources? By Andrew Allemann  –  Dec 20, 2020 8:26 pm PDT

What media sources have written about this letter? I can't find anything about it online.

Andrew: I learned of the letter last By Greg Thomas  –  Dec 21, 2020 2:40 pm PDT

Andrew: I learned of the letter last Monday from a story in Capitol Forum.  Thanks for your interest.

O my - again? By Karl Auerbach  –  Dec 22, 2020 2:56 pm PDT

If I remember correctly, even as long ago as when I was on ICANN's board, Overstock was pushing to a preferential "right" to obtain the ASCII letter "O" name in .com.

Apart from my ever-present objection to the presumption that domain names have a larger footprint as trade or service marks than as names of children, dieties, pets, schools, etc, I wonder about some other things:

Is this o.com intended to displace or usurp all of the other circle-looking characters in all the other languages?

Verisign is a registry - it operates under monopoly profit-making rules created by ICANN.  Why is it allowed to pick and chose some of those names to make windfall profits?

Thinking of Verisign and other registries and their ICANN granted registry fees - those feels accumulate to quite literally $billions per year.  One wonders, given the multiple decades to amortize the registration systems (hardware, software, procedures, training, etc) why those fees have never fallen but, rather, always increased despite massive drops in fees and costs elsewhere across the computer and networking industries.

Why has ICANN failed to inquire as to the foundations underlying those registry fees and audit the validity of those foundations.  That inquiry and audit seems quite properly to be part of ICANN's remit and is long overdue.

Jon Postel was a strong advocate of the notion that some special parts of a number or name space should be set aside as an escape into future evolution not yet foreseen.  That notion has been a powerful tool for expanding the Internet protocol suite beyond what it was back when Jon (and I) were actively creating Internet protocols.

In other words, NTIA's argument based on a reservation of certain names is deeply rooted in Internet history and technology.

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