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Summer of ICANN

Zane Bundy —  June 27, 2014 — Leave a comment

On New gTLD Program’s Third Anniversary, Webinar Sheds Light On Progress, Role of Program In The Future of Internet Governance

June marks the beginning of summer, at least in the northern hemisphere – longer days, shorter nights and (depending on your internal thermostat) either life-affirming warmth or misery-inducing heat.

This year, June is also notable for Internet governance milestones: Not only does it mark the third anniversary of ICANN’s New gTLD Program, but it’s the month in which ICANN holds its 50th public meeting in London.

In a webinar entitled, “Three Years Beyond the Dot: A Retrospective of the New gTLD Program”, FairWinds President and CEO Nao Matsukata considers the Program in relation to Internet governance and provides key questions to consider as the governance debate develops at home and abroad.

The webinar is divided into four main parts: Overview, Decision to Launch, Evaluation & Measurement, and Conclusion. In the first section, Matsukata plays a short, animated video about the program to get everyone on the “same page” in terms of what new gTLDs are and how the Internet is expanding.

He compared the Internet of the 90’s, when Google search was born and innovative new business models like Amazon and eBay were founded, to the Internet today. It is, he said, a substantially more global network that must grapple with increasingly complex and pressing governance issues, thanks in large part to the revelations of National Security Agency (NSA) spying made public by Edward Snowden in 2013.

In the second section, Matsukata describes the reasons ICANN decided to launch the program, noting that – as is indicated in slide 13, below – “These [three-, four-and five-letter domain names] are sold at prices that are absolutely out of the reach for most people to participate in… It is more and more difficult for even smaller companies to get certain names that might be helpful to them. So the idea behind expanding the space certainly fits the bill for those who are looking to get into the game at a price that’s much more affordable and manageable for small businesses and individuals.”

Slide describing decrease in the supply of 3, 4 and 5 letter domain names in the .COM space

In the third section of his presentation, Matsukata considers the progress of the program based on ICANN’s own promises in its Affirmation of Commitments and the preamble to the New gTLD Applicant Guidebook, as well as significant outcomes, such as trademark protections offered through the Trademark Clearinghouse and Uniform Rapid Suspension System.

Matsukata touches upon the need for greater public awareness of the New gTLD Program, citing FairWinds’ own research, which suggests that – while awareness of new gTLDs is relatively low – willingness to trust .BRAND gTLDs is high (see figure below). He also suggested that multistakeholderism and the rule of law should be thought of as tools to achieve the U.S. objective of a free and open Internet.

Public awareness statistics regarding new gTLDs

To view the deck on SlideShare, click here.

 

 

Depending on the person, the word auction can bring to mind a dusty, hot structure full of livestock and a fast-talking announcer with a Western lilt to his voice or a cool, quiet room of well-dressed art patrons waiting for the next Impressionist masterpiece to be unveiled in a stately building on the Upper East Side.

Auction

Aside from applicants for new generic top-level domains (gTLDs) and those in the ICANN community, most people probably don’t think of auctions as a way to resolve what are essentially bids for words – words as they appear to the right of the dot in your address bar.

When more than one company or group applies for the same gTLD, a “contention set” is formed. A contention set can be resolved in one of four ways: community priority evaluation, direct negotiation, a private auction not affiliated with ICANN, or an ICANN auction.

The ICANN auction is considered the “auction of last resort”, even by ICANN, since it means the contention set could not be resolved through community priority evaluation or through an agreement between the parties. Additionally, it means that those applicants who “lose” the auction (i.e., those not being awarded the gTLD) will not receive anything from the winning applicant – such as monetary compensation or compensation in the form of select domain names in the TLD in contention – in return for the future Registry Operator being awarded the string.

Given that applicants only receive a 20% ($37,000) application refund after being unsuccessful in an ICANN auction, a number of applicants have been eager to resolve contention sets through other means, including private auctions, where the party (or parties) not awarded the gTLD is (or are) compensated.

While many corporate applicants have voiced hesitation about entering private auctions out of fear that applicants may drive up the bidding to increase their payout, it is likely that more applicants will find a non-ICANN means to resolve contention sets as the scheduled dates for ICANN auctions approach.

The schedule for ICANN auctions, as our own Stephanie Duschesneau explained in a blog posted earlier this year, has caused some consternation among applicants. In response to feedback from the community about the long timeline (the last contention sets were to settle in 2016, “an eternity in business terms”, Stephanie notes), ICANN adjusted the initial auction rules to allow for the resolution of 20 contention sets a month as opposed to 10, moving up the last scheduled auction to March 2015.

According to the current ICANN auction schedule, only one ICANN auction is planned for June 4 because other applicants in contention have postponed going to ICANN auction. In the meantime, 13 strings – or new gTLDs – were resolved last month through private auctions, according to industry blog Domain Incite. Does this mean that applicants are treating the ICANN auction as a last resort, as ICANN had hoped? Possibly, but it’s too soon to tell.

As FairWinds Senior Consultant Lillian Fosteris explained, “Some applicants are eager to move forward and want assurance that the string is theirs. Consequently, they elect to resolve the contention, if possible, sooner, rather than later. Others, including brands that applied for closed generics, are still trying to figure out their next steps. Still others are set on proceeding to ICANN auction, whether it is later this summer or as late as 2015.”

Fosteris also noted that, in the most recent version of the New gTLD Auction Rules, ICANN reserves the right to postpone an auction at its sole discretion and that – in the event of a tie (following the winning bidder being declared in default after the conclusion of an auction) – ICANN will use a random number generator to award the gTLDs.

Private auctions may actually resolve an entirely different question: If a picture is worth a thousand words, how much is a word worth? Judging by what applicants may have already paid for strings like .YOGA, the answer is in the millions, at least to Minds +Machines (now the proud owner of .YOGA). Whether Internet users deliver traffic to websites in .YOGA is another matter, but given that yoga is a $27 billion industry, it may not be a bad bet – or rather, bid.

Brand owners are finally in the clear.

That is, in terms of signing new top-level domain Registry Agreements with the Internet Corporation for Assigned Names and Numbers (ICANN). The remaining kinks of an amendment designed to consider the specific trademark needs of brands have been settled

The final fix? Brand owners may now designate three ICANN-accredited registrars to serve as the exclusive registrars for their .BRAND top-level domain, according to a blog entry posted by ICANN Vice President, Domain Name Services Cyrus Namazi.

Namazi announced that the language of the amendment – Specification 13 – is now available for qualifying .BRANDs in full.

ICANN’s new generic top-level domain (gTLD) Program Committee (NGPC) approved the long-sought and much-discussed Specification 13 on March 26. But the three-registrar provision raised a potential conflict with another policy devised by the Generic Name Supporting Organization (GNSO) that prohibits discrimination against any accredited registrar.

GNSO – the policy-making arm of ICANN for gTLDs – could have objected  to the three-registrar provision. But it chose not to after considering the unique business case of .BRANDs and public comments submitted on the proposed Specification 13. Since registration is limited in a .BRAND, brands prefer to use a limited number of designated registrars. Specification 13 will now explicitly allow brands to do so.

As we’ve noted before, the incorporation of the entirety of Specification 13 into the Registry Agreement is beneficial for .BRAND applicants. For example, in addressing some of brand owners’ collective concerns with the new gTLD Registry Agreement, the approval of Specification 13 will allow .BRAND applicants to move through the contracting and delegation processes and launch with greater speed.

And that could speed consumer adoption of new gTLDs, given the broad consumer base and digital presence of many brand applicants, and the benefits the .BRAND gTLD model presents for improved online security and consumer trust.

In the 1950s, a psychologist invented the “wug” test to determine when children understand how language indicates and distinguishes between singular, versus plural, items.  The children were shown a picture of a single creature and told that it was a wug. Then the children were shown a picture with two of the creatures and were asked to finish the sentence “There are two ____.”  Children as young as three were able to answer with “wugs”.

So here’s a 21st century version of the wug test: what’s the difference between .PET and .PETS?

According to a recent ruling by International Centre for Dispute Resolution panelist Richard Page, there isn’t enough of one: choosing to set aside UDRP precedent, Page ruled in favor of Google’s assertion that .PET (for which it applied) is confusingly similar to .PETS (for which Donuts Inc., a domain name registry, applied).

“The visual similarity and algorithmic score are high, the aural similarity is high, the meaning similarity is high. Objector has met its burden of proof. The cumulative impact of these factors is such that the Expert determines that the delegation of <.pet> gTLD and the <.pets> gTLD into the root zone would cause a probability of confusion.”

Wug

As Keven Murphy of DomainIncite points out in his blog on the ruling, other panelists came to the opposite conclusions in two cases before the New gTLD String Confusion Panel, one that found .HOTEL/.HOTELS were not confusingly similar and neither were .CAR/.CARS.  FairWinds’ own legal specialist, Steve Levy, commented that “as we feared, this will lead to an inconsistent patchwork of rulings on singular vs. plural new gTLDs even though this seems to have been a non-issue in conventional domain names.”

So take the Wug test for the Internet Age for yourself and let us know what you think – how will the content on .KID differ from .KIDS? Or how will Internet users decide to go to a website in the .LOAN gTLD as opposed to one in .LOANS?

The results of a new study on the security risks of proposed generic Top-Level Domain (gTLD) names likely will lead to delays of many new gTLD applications by at least four months. The majority of new gTLDs are “low risk” and got the green light to proceed, although these “low risk” applicants must still wait 120 days after signing their contracts before they can activate any domain names in their gTLDs. Higher risk applications could be delayed longer.

It is common practice among enterprises to use extensions that look like gTLDs when creating and naming networks, and so the Internet Corporation for Assigned Names and Numbers (ICANN) commissioned this security study to look into instances where conflicts occur. In some cases, such a conflict could cause users to be redirected to different locations if networks are not properly secured, but in more extreme cases, these conflicts could result in increased opportunities for hackers to penetrate corporate networks.

Based on the number of conflicts found, categorized each as “low risk” or “high risk” for confusion. The study was unable to find enough information on certain gTLDs, which were labeled as “uncalculated risk”. ICANN’s recommendations for each category is as follows:

  • gTLDs categorized as “low risk” can proceed to delegation, though applicants must wait 120 days after signing the Registry Agreement before they can activate any domain names in their gTLD.
    • This applies to 80 percent of the total applied-for strings.
    • Because all applicants must also complete pre-delegation testing and request delegation from IANA after signing the Registry Agreement before they can delegate and begin actively using their gTLD, the 120-day delay is unlikely to substantially delay the delegation of these gTLDs.
    • After the gTLD is delegated, applicants must wait an additional 30 days before activating domain names. During this time, if any conflicts mentioned above occur, the applicant (now the gTLD Registry Operator) is responsible for notifying the points of contact of the IP addresses that make conflicting requests.
  • gTLDs categorized as “uncalculated risk” will not proceed to delegation until they have been further studied; ICANN expects these additional studies to take an 3-6 months to complete.
    • This applies to 20 percent of the total applied-for strings.
    • These gTLDs are likely to experience delays longer than the aforementioned 3-6 months, since it’s likely that they’ll have to implement additional mitigation measures as well.
  • The two “high risk” gTLDs will be delayed indefinitely until something can be done to place them in the “low risk” category.
    • This applies to .HOME and .CORP

This is a good topic to bring up with your IT department. ICANN’s recommendations are currently up for public comment on ICANN’s site.

Buzz regarding the latest development in ICANN’s new gTLD Program interrupted the pre-holiday hush of more than one corporate office this morning: the ICANN Board has given ICANN President Fadi Chehadé the authority to proceed with the New gTLD Program based upon the approved version of the Registry Agreement (RA), which can be found here.

FairWinds expects a lively debate about the new RA at meetings ICANN has scheduled at its conference in Durban, South Africa July 14-18. Stakeholders – except applicants for open .GENERIC gTLDs, who got a green light from the ICANN Board – are eager to learn more about ICANN’s decisions, voice their remaining concerns, and advocate for solutions.

Fortunately, ICANN is aware of the impact the RA will have on its stakeholders and has scheduled meetings in Durban with .BRANDs to discuss provisions they want and need to operate closed gTLDs. ICANN also has scheduled meetings in Durban with the Governmental Advisory Committee (GAC) to  discuss the delegation of sensitive strings and strings linked to regulated markets.

As FairWinds CEO Nao Matsukata explained: “This is a significant step toward delegation but significant problems still remain. The important point is that ICANN hasn’t rejected any strings, and discussions are ongoing about closed generic-term gTLDs. Clearly ICANN is committed to finding a way to get those strings delegated.”

For more information regarding how brands are impacted by the new gTLD program, please contact us. To stay informed about developments in the new gTLD program that could impact your company and consumers like you, please visit our blogs and follow us on Twitter @fairwinds.

 

The Internet Corporation for Assigned Names and Numbers (ICANN) recently released an update on the New gTLD Program Committee’s (NGPC) discussion about how and when it would address the Governmental Advisory Committee’s (GAC) advice from Beijing.

ICANN has stated that the NGPC’s goal is “to carefully consider GAC advice and community input and to make decisions that will allow the greatest number of new gTLD applications to move forward as soon as possible.” This may be difficult given that the GAC advice, if accepted, could significantly delay gTLD applications.

In its update, ICANN restates that the NGPC’s discussion was structured around the GAC Advice Framework to organize and prioritize individual advice items. ICANN is developing a scorecard to do just that.

The update also reveals that the NGPC has begun discussing the GAC Advice on Safeguards. ICANN is seeking input on this topic via an open Public Comment Forum, which closes on June 4, 2013.

ICANN also reminds us that over the next few weeks, the NGPC will be holding a series of calls “to discuss applicant responses to the GAC advice, the Safeguard advice and related public comment, and other matters including the GAC’s advice on singular and plural strings, its questions in Annex 2 [of its Advice], and its requests for briefing papers.”

ICANN recently held an Applicant Update Webinar led by Christine Willett, VP of Operations, as part of a series intended to provide information on the evaluation progress, program developments, and other topics of interest to new gTLD applicants. While the webinar didn’t produce any groundbreaking news, applicants should take note of key dates for ICANN auctions and Community Priority Evaluations.

New gTLD applicants in Contention Sets can request an ICANN auction after publication of Initial Evaluation results. Completion of the Initial Evaluation stage is expected by August, with ICANN planning to begin auction proceedings in September; this is likely because private auction providers have previously announced their intentions to begin their own auction processes in the coming weeks.

ICANN also announced that community-based new gTLD applicants can request Community Priority Evaluations (CPEs) starting in June. The CPE is a process by which to resolve string contention, which may be elected by a community-based applicant. CPE evaluations are then scheduled to take place in September.

Other important ICANN updates include:

  • The last set of Financial, Technical, and Registry Services Clarifying Questions (CQs) will be released on May 22, 2013
  • ICANN will be holding a Contracting Webinar Session in early June to inform applicants on material information needed for an executable Registry Agreement
  • ICANN has launched a new Contracting & Registry Agreement microsite
  • Pre-Delegation Beta Testing has begun and ICANN has clarified that applicants will need to have signed their Registry Agreement prior to Pre-Delegation Testing
  • Thanks to implementation of the Strawman Model, 50 domain labels found to have been previously abused have been added to existing verified TMCH records
  • ICANN will release a timeline for the earliest theoretical launch of new gTLDs

Much remains and will remain unknown until the ICANN Board decides how to proceed on the Registry Agreement, the latest draft of which is now open for public comment, and on the GAC Advice, which the board is now reviewing.

The Center for Strategic and International Studies and the Washington DC Chapter of the Internet Society recently co-hosted a panel discussion on the dicey topic of “The Geopolitics of Internet Governance.”

Panelists addressed the questions of how to devise a more inclusive Internet Governance structure to replace the U.S.-centric one developed in the 1990s. The trick will be how to satisfy non-western states’ desire for a larger role and still maintain essential democratic principles such as the free flow of information and human rights.

The panel featured:

  • Phil Verveer, Former US Coordinator, International Communications and Information Policy, US Department of State
  • Veni Markovski, ICANN, Vice President for Russia, CIS and Eastern Europe
  • Jane Coffin, Director, Development Strategy, The Internet Society
  • Bill Smith, Senior Policy Advisor, Technology Evangelist, PayPal
  • Laura DeNardis, Associate Professor in the School of Communication, American University

Phil Verveer said that since the multi-stakeholder process creates inherent challenges, we need a better definition of “multi-stakeholder” to determine who participates and in what way. Among the considerations, he said, are that the U.S. created the Internet; the economic, social, political, and cultural influences the Internet has on the world; the dominance of U.S. sensibilities about content, which are not universally shared; and the threat of cybersecurity and the uncertainty of how to address it.

Veni Markovski, who lived in Bulgaria for 28 years, praised that country’s approach to the Internet. Hundreds of Internet providers are available to Bulgarians. And when the government tried to take control, the people sued and won. Markovski said education and development are key in the geopolitics of Internet governance. Different countries view the Internet in different ways, he said, and they all have different views of what it entails.

Jane Coffin agreed that education is essential to effective participation in Internet governance, noting that discussion is difficult when some languages, Russian, for example, don’t have a word for or an understanding of the concept of “multi-stakeholder.” Coffin felt strongly that the United Nations’ International Telecommunication Union (ITU) must play a role. She urged that the debate be broadened to include and listen to developing countries around the world.

Bill Smith observed that the agenda for almost every meeting on Internet governance over the past few years has been based on the Tunis agenda, and since the ITU is the only group mentioned in the agenda, it has tried to assert itself as the intergovernmental agency charged with defining Internet governance. Smith was critical of the ITU, doubting its ability to address important governance issues such as cybersecurity, spam, use and misuse of the Internet, privacy and personal data, and protection from abuse and exploitation.

Laura DeNardis observed that Internet governance debates can be “proxies” for debates over economic and political power, in part because it is entangled with national security, given its role in modern warfare. DeNardis described the complexity of Internet governance as a mosaic: complicated beyond the management abilities of any one entity.

Internet Corporation for Assigned Names and Numbers (ICANN) and the New gTLD Program issues were not raised until the Q&A session and, even then, were only touched upon lightly.

DeNardis said there is no technical need for new gTLDs and that they will create problems for trademark holders. On the other hand, she said businesses will find advantages in a larger domain name space and new possibilities for marketing innovations.

Markovski defended ICANN against a complaint that the New gTLD Program was implemented without diverse input, arguing that many governments around the globe participated via the Governmental Advisory Committee (GAC). Jamie Hedlund, VP, Stakeholder Engagement – North America, for ICANN – was in the audience. He said ICANN is the only multi-stakeholder institution with a role for governments and that 124 governments are members of the GAC. He said ICANN believes the GAC was highly effective and influential in shaping the New gTLD Program.

Hedlund emphasized that the GAC Communiqué, drafted at the ICANN 46 meeting in Beijing, will be taken seriously by the ICANN board. ICANN’s credibility hinges on the effective contributions of governments, he said, echoing GAC Chair Heather Dryden’s comments in her recent video interview.

In response to ICANN’s recent release of a proposed final draft of the New gTLD Registry Agreement (RA), FairWinds Partners submitted a public comment Monday arguing the agreement lacks adequate trademark protections for brand owners.

ICANN’s failure to recognize the unique needs of brand owners is puzzling. Companies with protected trademarks account for approximately one-third of the total number of gTLD applications and nearly half of all applications for unique strings.

“Given the broad participation of brand owners in the New gTLD Program, ICANN must recognize the unique needs of this expansive group of future gTLD Registry Operators,” FairWinds said in its comment. “The most constructive way for ICANN to do so is to adopt a second template draft of the New gTLD Registry Agreement off of which individual brand owners can negotiate their own future Agreements.”

FairWinds proposed 10 specific changes we believe must be incorporated into the RA to preserve the rights of brand owners:

  1. A registry should not be transitioned upon termination of the Registry Agreement in cases where no domains have been sold, distributed or transferred to unaffiliated third parties, or where the gTLD corresponds to a trademark owned by the Registry Operator.
  2. The Emergency Back End Registry Operator should be required to maintain the registration restrictions established by the Registry Operator during a period of emergency transition.
  3. ICANN or third-party vendors involved in the operation of a gTLD should not seek or gain trademark or other intellectual property rights over the mark to which a gTLD refers.
  4. The maximum aggregate monetary liability of the Registry Operator should be equal to that of ICANN.
  5. ICANN should be required to indemnify the Registry Operator from all claims, damages, liabilities, costs, and expenses unless incurred due to willful omission or breach of the Registry Agreement.
  6. Confidentiality provisions should be expanded and should incorporate appropriate remedies in cases where breaches in confidentiality result in material harm to the Registry Operator.  
  7. A clear, streamlined process should be established for releasing reserved geographic names or two-character labels for use by the Registry Operator in conjunction with the promotion or operation of the registry.
  8. Technical and financial audits should be restricted to the relevant service provider(s) or the Registry Operator, respectively, and not extend to corporate parent companies. Registry operators should not be required to bear the cost of standard audits, even if registry functions have been outsourced.
  9. The Registry Agreement should establish a process to grant exemption to the Code of Conduct, provided that the Registry Operator does not sell, distribute or transfer control of second-level domains to unaffiliated third parties. 
  10. A Registry Operator should not be required to implement a Sunrise Period or Claims Service and pay associated fees in cases where registration restrictions prevent unaffiliated third parties from registering within the gTLD.

The concerns and suggestions voiced in this public comment by FairWinds are not FairWinds’ alone. Many brand owners share our stance and a number agreed to co-sign the comment as well, including:

Walmart Stores, Inc., Bank of America Corporation, Xerox Corporation, Chanel S.A., Pfizer, Inc., Intel Corporation, the Corporate Executive Board Company, Tiffany & Co., SAS Institute, Zippo Manufacturing Company, American Family Insurance Group, FLIR Systems, Inc., Bloomberg IP Holdings LLC, Boehringer Ingelheim, Rezolve Group, Inc., Tata Motors Limited

To see FairWinds’ public comment in its entirety, please click here.