ICANN’s Business Constituency has developed a position paper definin

1. It would dramatically raise the cost of domain name registration in new TLDs

2. It would limits users’ choice of an online identity and thwart any attempt to introduce popular new names that responded to real user demand

3. It would bring a halt to competition in the registry market

4. It would defeat any attempt to innovate by tailoring registry architecture and technology to specific markets

The claimed benefits of this approach do not exist:

5. It would not help preserve user service when registries fail

6. It would not have any beneficial effect on users’ ability to find things on the Internet

The NCUC supports a demand-driven approach to TLD additions. ICANN should allow new names to be proposed by interested communities, entrepreneurial registry operators, or a combination of both. We believe that ICANN should define a process that permits addition of a maximum of 30 new TLDs each year. Five of these 30 should be reserved for noncommercial user groups. ICANN’s assessment of these applications should be based on adherence to a minimal set of ICANN-defined technical specifications and conformity to established ICANN policies, such as UDRP. Approving a TLD should be – and could be – as simple as accrediting a registrar. Whether the business models proposed were “sponsored” or “unsponsored,” “restricted” or not, would be up to the applicants. Contention among applicants for the same name would be settled by auction, with the proceeds going to ICANN. We understand that such a procedure raises many issues of detail that are not elaborated here. But the basic policy issue put before the GNSO is whether TLD additions should be demand-driven or “structured.” We favor the open, demand-driven approach.

The NCUC cannot support the proposed GNSO TLD Committee Policy. Contrary to the above stated principle favoring an open and competitive structure, the Committee proposes that no open TLD should be allowed to exist ever again. ICANN would only expand the name space by defining a fixed, mutually exclusive set of categories that users would be stuffed into. All new TLDs would be sponsored and restricted, and registries will be forced to authenticate registrants “to ensure that they are registering names that are germane to their businesses and not infringing on another's intellectual property.”[1] (We note with disappointment the proposal’s apparent inability to understand that not all domain names are owned by “businesses.”)

The Committee also proposes a radical change in the nature of the domain name registration industry. It proposes that registries should have no control over the TLD names that they operate. Instead, ICANN will make itself a central planning authority for the name space, defining all TLD names and assigning operation of the names to “qualified” registry operators. We note that the proposal says nothing about the critical issue of how names are assigned to registries, an issue of tremendous political and economic importance.[2]

We wish to make the following observations:

§ The concept of a “structured” or “taxonomised” name space, faces a great deal of opposition among ICANN participants, and has no apparent support outside the BC/trademark constituencies. At the Amsterdam public forum, opponents outnumbered supporters by a 10 to 1 ratio. We also note that a member of the BC and a member of the Intellectual Property constituency were among the public critics of the proposal in Amsterdam.

§ The proposal favors the interests of incumbent registries who do not want to face competition from new entrants, and a small class of major corporate trademark holders, who comprise 5 percent of the relevant population of users at most. Worse, it does so at the expense of noncommercial and other users who benefit from registry-based competition.[3] We believe that economic protectionism is an illegitimate policy concern and should play no role in ICANN’s approach to new TLDs. We believe that IPR holders do have legitimate concerns about defensive registrations, but that those concerns are best addressed through UDRP and other ex post facto policy measures, not by throttling the market for domain names. Only one quarter of one percent of all registrations are ever challenged. Artificially-imposed scarcity of TLDs increases the gains from illicit forms of name speculation. TLD expansion would diminish those incentives and reduce cybersquatting in the long term.

Above, we noted 6 reasons why the GNSO Committee proposal is not in the interests of domain name users. We elaborate on these problems below.

1 Higher costs

Forcing all new TLDs to carefully authenticate a correspondence between the identity of a registrant and the TLD name would make all domain name registration a slow and manual process. Costs would quadruple over what users pay now. We do not oppose and may often favor the creation of new TLDs that are sponsored and restricted. But many users have no interest in or need for authenticated and restricted domains. That is why there are thousands of times more registrations in open domains than in restricted domains.

2 Limited choice

The proposal offers a top-down approach to naming that will not be responsive to actual user demand and user needs. It is impossible for ICANN today, or at any time in the future, to predict what names or categories users will find useful and desirable unless it uses a demand-driven approach to TLD addition. Tastes, conditions, and names of interest change over time. Names like <.blog> and <.enum>, utterly meaningless a few years ago, have entered our vocabulary and become important. The root zone must have a procedure to add new names in response to demand. We strongly support the market-oriented, customer-driven approach in which applicants for TLD names/ registries approach ICANN with their ideas, and ICANN has in place an objective, efficient procedure for authorizing them and resolving contention and conflict.

As a constituency whose membership is globally diverse, the NCUC also believes that no centrally imposed naming structure can satisfy the global needs of the Internet; there is too much linguistic, economic, and political diversity. A uniform categorization scheme will result in semantic conflicts; a category name in English might mean something completely different in German.

ICANN’s basic mission is simply to coordinate unique parameters to permit stable and consistent operation of the root zone. It should not attempt to tell the public what names they “ought” to adopt or what categories they “ought” to fit into.

3 An end to competition in the registry market?

The proposal to separate the registry operator from the name would have a number of negative effects on the domain name market. First, it would discourage if not destroy new entry and competition in the registry market. Since the proposal requires all new names to be restricted, the market size of any new TLDs will be miniscule. Hence, no new registries will find it feasible to enter the market. All new names will be assigned to the few dominant registries that already exist.

Competitive entry would also be discouraged by the inability of a registry operator to have any control over the name they supplied. It is noteworthy that ALL new entry into the domain name registry market since ICANN’s inception has come from specific registry operators interested in supporting specific names that they believe would attract specific user communities.

The separation concept fails to consider how markets operate and how innovation and competition occur in a market economy. Consider the following questions:

§ Who is going to finance and build a domain name registry when they have no idea what name, if any, they are going to operate?

§ How can prospective registries construct a business plan and raise capital if they do not know whether they will be awarded something on the scale of <.com> (tens of millions of registrations) or something on the scale of <.museum> (with a few hundred registrations)?

§ How can prospective registries develop effective marketing and branding concepts if they have no interest in the name per se and no prior ties to the communities served by the TLD?

§ Why should a community of Internet users that invests time and money in getting a name established have no control over who provides them with registry service?

4. Integrating name, registry design, and service is necessary

Separating the name from the registry would harm technical innovation. How can prospective registries design, develop and execute innovative services closely tailored to the unique needs of a named group if they are a hollow, generic registry that is passively handed character strings to service? Registries are databases. As anyone who has designed and built a database knows, the structure and operation of a database are very sensitive to the type of data one is dealing with and the unique needs of the users of the data.

5. Responding to Registry Failure

The assertion that separating the name and the registry makes it easier or more efficient to protect the investment of registrants when a registry goes out of business is simply false. The only protection that users can possibly have against a failing registry is that its DNS records are stored somewhere and can be transferred to a new operator willing and able to serve them. Under a normal, market-oriented regime failing registries would sell their customer base and associated records to a surviving registry. In a competitive market many operators will be happy to purchase additional customer base. In the proposed “command economy” approach, what will happen? At best, ICANN will ask available operators which registry wants to take over the names, and if multiple operators are interested it will hold an auction for that right. This is not much different than the effect of a market, except for the interposition of an unnecessary mediator. At worst, ICANN will simply order a registry to take over and serve the names regardless of whether it wants to or it feels it has the capacity to do so – a method unlikely to produce good service. At any rate either response to failure does NOT require strict separation of the name from the registry.

6. Finding things on the Internet

The proposal reflects a popular, but increasingly erroneous belief that by stuffing millions of domain names into defined categories, ICANN will make it easier for Internet users to “find things on the Internet.” To the extent this premise was ever valid, it has become increasingly suspect as the number of names populating the space has grown and the general Internet-using population has grown more sophisticated. Internet users do not search the Internet by scanning lists of domain names. Even if a clean, intuitive “taxonomy” of TLDs could be defined, each TLD would have at minimum thousands of entries in it, and the largest ones (like .com, .net, .org, .de and co.uk) would have tens of millions of entries. No one in their right mind is going to seek content by scanning a list of registered domain names and trying to guess what services or content is stored at them. Users have a variety of far more sophisticated tools at their disposal, such as search engines, portals, and referrals.

More importantly, to the extent genuine “initial interest confusion” may exist, injured parties have recourse to both the UDRP and the courts.

Domain names are not about finding things we are looking for. Domain names are just memorable identifiers, not a directory or a search token. They are to assist us in easy communication. That is why they have to be memorable, not systematic. Most people's memory works through association, not categorizing. For this reason, to the extent ICANN has legitimate concerns protecting intellectual property or businesses, it should rely on post hoc remedies such as UDRP.

Conclusion

The proposed model of TLD development that seems to have captured the GNSO Committee is unduly restrictive and unimaginative. It assumes that all domain name services and applications are generic and must fit into existing business and policy models. It leaves little room for innovation. We need to question the model of ICANN-accredited-registrars for all future TLDs. There may be a 'market' for free domains. (e.g., Why can't someone (say the Red Cross) start the TLD .help and give away domain names there for free?) In any case free domains are made impossible by the current registry-registrar structure. TLD policy should also make it possible for alternative WHOIS policies to exist.

[1] BC position on new gTLDs December 2002 page 2.

[2] If names are assigned to registries based on ICANN’s ad hoc discretion (which is how ICANN’s Board usually makes decisions), then the assignment process is rife with opportunities for political haggling, discrimination, collusion and insider dealing, as registries and registrars play a major role in selecting the Board. If names are assigned on the basis of competitive bidding, then the bids will reflect the value expected of specific names, and we are very close to where we would be in a regime that allowed registries to propose their own names.

[3] It is useful to draw a comparison between what is now referred to in telecommunications policies as “intermodal competition” (such as between competing platforms) and “intramodel competition” (where rivals share a platform). The proposal favors intramodal competition (between registrars using the shared SRS platform) but eliminates intermodal competition (among registries). From a consumer perspective, both are valuable and should be supported.