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Re: [wg-c] position paper
I support Jonathan's proposal as a reasonable altenative with one
significant exception:I disagree with the idea that ICANN should
enunciate a
*presumption* that all TLDs support competitive registrars. I think
Milton's proposal provides persuasive reasons why this is not beneficial
to the Internet community so I will not repeat those reasons here.
Jonathan Weinberg wrote:
>
> This is an initial draft of a position paper expressing a few of my own
> views and reaching towards consensus positions. Notwithstanding that I've
> pulled it together in an attempt to enunciate positions with wide appeal,
> I'm offering it wearing my "working group member" hat, not my "co-chair"
> hat. I'm happy to fuzz out some issues in order to reach agreement with
> others. To the extent that any of you would be comfortable signing one part
> of the document but not another, let me know, and I'll try to figure out a
> way to accommodate that. Various WG members have already seen a version of
> this document.
>
> The question of new gTLDs involves about half-a-dozen closely
> inter-related issues. I try to work through those issues one at a time.
> The position paper doesn't present specific implementation plans for every
> aspect of gTLD expansion. We've been sharply divided on issues of basic
> principle, and in this position paper I'm primarily trying to work towards
> some settlement on those broad-brush issues. Once we agree (or agree to
> disagree) on those, we can move on to specific implementation details.
>
> This position paper, in summary: ICANN should add a large number of new
> gTLDs, including both general-purpose and limited-purpose domains. It
> should begin with an initial testbed rollout of six to ten new gTLDs, with
> the expectation that it will add more if the evaluation period reveals no
> major problems. In the short term (during the testbed and initial phased
> rollout), to the extent that more registries seek immediate inclusion of
> their preferred gTLDs into the root than the schedule will accommodate,
> ICANN may engage in an ad hoc selection process. In the long term, what is
> most important is that ICANN adopt policies minimizing the barriers to
> adding new gTLDs to the root. ICANN should authorize both for- profit and
> non-profit gTLD registries. It should enunciate a rebuttable presumption
> that all gTLDs (whether for-profit or non-profit) must support competitive
> registrars.
>
> I. Should there be new gTLDs?
>
> Yes. Expanding the number of TLDs will increase consumer choice, and
> create opportunities for entities that have been shut out under the current
> name structure. It doesn't make sense to continue a situation in which
> huge segments of the general public view .com as the only "real" TLD, but
> every word in a typical English- language dictionary is already registered
> as an SLD there. This situation is currently requiring companies to
> register increasingly unwieldy domain names for themselves, and is
> inflating the value of the secondary (speculators') market in .com domain
> names.
>
> Right now, .com stands astride the name space as the dominant -- indeed,
> the only "real" -- commercial TLD. Companies that currently have a domain
> name in the form of <www.companyname.com> have an extremely important
> marketing and name-recognition tool. They have an advantage over all other
> companies that do not have addresses in that form, because they are the
> ones that consumers, surfing the Net, will be able to find most easily. If
> the name space is expanded, companies will be able to get easy-to-remember
> domain names more easily, and the entry barriers to successful
> participation in electronic commerce will be lowered. Similarly, addition
> of new gTLDs could enlarge noncommercial name space.
>
> Addition of new gTLDs will allow different companies to have the same
> second-level domain name in different TLDs. That is (to pick an arbitrary
> example), shopping.com might face competition from shopping.biz and
> shopping.store. Those businesses will have to compete based on price,
> quality and service, rather than on the happenstance of which company
> locked up the most desirable domain name first.
>
> Indeed, expanding the name space could help solve one of our most
> intractable problems relating to trademark and domain names. Currently,
> when multiple unrelated companies have the same or similar names (such as
> United Airlines and United Van Lines), there is no good way to resolve the
> question of who gets the valuable domain name <www.companyname.com>. But
> if the domain name space were expanded, so that one firm could have, say,
> <www.companyname.biz> and another could have <www.companyname.firm>, many
> of these disputes could be avoided. Consumers, understanding that a given
> SLD string can belong to different companies in different TLDs, would be
> less likely to jump to the conclusion that any given domain name was
> associated with a given company.
>
> II. What should be the nature of the new gTLDs?
>
> Some people argue that new gTLDs should be predominantly or entirely
> limited-purpose domains (that is, .airline rather than .firm). Their
> arguments are that limited-purpose TLDs give more information to the
> consumer (a consumer can expect that united.airlines is an airline, not a
> trucking company) and will be less threatening to trademark interests
> opposed to the expansion of the name space (because United Airlines will
> not feel threatened by the registration, say, of united.books). Some even
> argue that ICANN should map out, at the start, a framework of
> limited-purpose TLDs, such as .transp and .health, so that users could rely
> on the structure of the DNS in seeking the URLs associated with particular
> businesses or content providers.
>
> I agree that limited-purpose TLDs can be useful. It seems to me, though,
> that these should not be the *only* new gTLDs. For the reasons I stated
> above, .com is currently the 500- pound gorilla of TLDs, and domain names
> in .com have tremendous (artificial) market value. Adding a set of
> limited-purpose TLDs would not change that: there would remain .com (and to
> a lesser extent .net and .org) atop the TLD pyramid, and a mass of
> special-purpose TLDs below. Alternative *general-purpose* top-level
> domains, by contrast, could provide effective competition to .com. This
> would more nearly level the playing field for individuals and businesses
> seeking attractive domain names, and would diminish the ability of a
> minority of e- businesses to collect rents based simply on their
> registration of good names in the "best" TLD.
>
> This suggests that the ideal system would be one that mixes new
> limited-purpose gTLDs with new general-purpose ones. Part VII of this
> position paper discusses the process through which new gTLDs will be
> selected. If ICANN adopts a process in which it selects the gTLD strings
> itself, it could simply choose some gTLDs in each category. Alternatively,
> if ICANN adopts a process in which it simply accredits new registries and
> those registries choose their own TLD strings, the result would likely be a
> similar mixed system. Some registries might seek broad market reach by
> choosing a name with general appeal, such as .web; others might seek to
> exploit a niche market by choosing a name with limited uses, such as .per.
> The resulting name space would have gTLDs in each category.
>
> III. How many new gTLDs should there be?
>
> In the long term, a domain name system with a large number of gTLDs seems
> highly desirable. Each additional TLD provides new options for domain-name
> registrants. Further, a name space in which there are many TLDs and TLD
> registries is one in which the registries themselves are (or can be)
> subject to useful market competition. The existence of many competing TLD
> registries will diminish the market power that any particular TLD will
> exercise. Users who are unimpressed with the performance of one registry
> can instead acquire a new domain name in a different top-level domain, run
> by a different registry. Members of the Internet community will be able to
> decide themselves, through their name-registration decisions, which of the
> many possible TLDs will play an important role in the name space.
>
> Imagine, thus, that the name space contains a single registry called
> .sports. Without more, this registry has market power corresponding to the
> degree that it is a better TLD for certain registrants than any other, and
> it can use that market power to extract inefficient rents. If, on the
> other hand, there are many TLDs, and relatively free entry into the TLD
> namespace, then .sports can constrained by the creation of .athletics, to
> the benefit of domain-name registrants. In this respect, it would be
> undesirable to artificially limit the number of gTLDs short of the bounds
> of the technically feasible and operationally stable.
>
> The most important reason that has been suggested for limiting the number
> of gTLDs relates to trademark owners' concerns. Addition of many new
> gTLDs, trademark owners urge, will greatly increase their policing costs.
> The more new gTLDs there are, they argue, the more work they will have to
> do in order to ensure that nobody is using their trademarks (or variants)
> as second-level domains in ways that would confuse consumers.
>
> This concern, it seems to me, is overblown. Trademark owners are already
> policing their marks in the existing generic top-level domains, as well as
> in a variety of country-code top-level domains. Cost concerns can best be
> addressed through requirements that the new top-level domain registries
> make their lists of second-level domains easily searchable through an
> automated process. Such a rule will limit the costs to trademark owners of
> adding new domains. More importantly, it would not make sense to distort
> the entire structure of the Internet name space simply in order to avoid
> additional costs to trademark owners.
>
> IV. What should the transition to an expanded namespace look like?
>
> It would not be sensible to dump a huge number of new TLDs into the
> namespace on Day One. Rather, ICANN should supervise a smooth transition
> to an expanded namespace. During that transition, ICANN should require any
> would-be registry to satisfy qualifications relating to technical
> competence and stability. Further, it should limit each qualified new
> registry, at the outset, to a single gTLD. This will allow the greatest
> number of entities to participate in the transition, and generate the most
> "bang for the buck" in new registry competition.
>
> ICANN can choose either of two transition plans. First, it could announce
> a testbed in which a fixed number of new registries would be added to the
> root, followed by an evaluation period. Assuming that the testbed revealed
> no major problems, it would then move to a phased rollout in which new TLDs
> would be added to the root as qualified registries applied to run them, but
> no more than a fixed number of registries would be added per month. The
> per-month "cap" would ensure that new TLDs would not be added so quickly as
> to overwhelm ICANN's processes or the new dispute- resolution system.
>
> Alternatively, ICANN could dispense with the testbed, and simply begin
> with the phased rollout. Under either plan, after the close of the
> transition period, ICANN could establish procedures not only to add new
> registries, but to allow existing registries to add additional TLDs.
>
> During the Working Group C straw poll, a large number of group members
> urged that dispensing with the testbed would be imprudent. In discussions
> building on that straw poll, the dominant (though not unanimous) sense of
> the working group was that even though we had differing views as to the
> *best* approach, almost all of us could support a compromise proposal that
> ICANN begin with an initial testbed rollout of six to ten gTLDs, with the
> expectation that it would add more if the evaluation period reveals no
> major problems. I support that rough consensus as a workable resolution of
> this question.
>
> V. Should ICANN require each new gTLD registry to be shared — that is, to
> support competing registrars on an "equal access" basis?
>
> In a shared-registry system, the registry must support multiple
> registrars, subject to requirements designed to ensure that the registry
> does not exclude qualified registrars or give some registrars
> higher-quality access than others. This approach assumes (as ICANN
> currently does in connection with the NSI gTLDs) that the functions
> associated with SLD registration can be divided into two: the "registrar"
> function of dealing with the end user, and the "registry" function of
> maintaining the registry database. Sharing ensures competition, on a level
> playing field, in the provision of registrar services in any given TLD, and
> gives the user of the benefits of competition with respect to those
> services. In particular, by ensuring that somebody who is skillful at
> providing registrar services will be operating in each TLD, it provides
> some protection against the situation in which the registry controlling a
> desirable TLD is clueless at providing registrar services. These are
> significant advantages. The Nominet system in .uk is an example of a
> highly successful shared-registry system
>
> On the other hand, sharing is not a panacea; in particular, it has no
> effect on the registry's market power as a registry. (That is, the
> requirement that a registry support multiple registrars does not itself
> constrain the price that the registry is able to charge for registry
> services. That price can only be limited by market forces or -- as in the
> case of NSI -- by direct regulation.) Further, it is possible to imagine
> situations in which a sharing requirement would actually interfere with the
> provision of innovative services. Consider, for example, a plan to operate
> .family, limiting registration to persons operating Web sites that in the
> considered (discretionary) judgment of the TLD operator were
> family-friendly. The commercial success of that domain would depend in
> part on the public's view of the care and discernment the operator
> exhibited in making those choices. That business plan would not succeed if
> any registrar could add names to the .family domain in the exercise of its
> own discretion.
>
> In light of these concerns, it would be sensible for ICANN to enunciate a
> *presumption* that all TLDs support competitive registrars, thus generating
> the benefits of registrar competition, rebuttable to the extent that a
> particular registry makes a showing to ICANN there would be significant
> advantages to some other arrangement.
>
> VI. Should ICANN require that each new gTLD registry be operated on a
> non-profit (cost- recovery) basis?
>
> Both non-profit and for-profit registries have advantages. The advantage
> of non-profit registries lies primarily in the expectation that they will
> be less inclined to exploit their market power at the expense of
> domain-name registrants. The advantages of for-profit registries lies
> primarily in their greater incentives to operate efficiently and offer
> innovative services.
>
> Registries have the potential to wield significant market power, for two
> reasons. First, any registry will have market power corresponding to the
> extent to which the top-level domain it controls is more attractive, to
> some subset of users, than are the alternatives. Put another way, each
> registry has "monopoly" control over its particular domain(s). NSI, thus,
> would be able to extract monopoly rents flowing from its control over .com,
> were the price it charges for .com registry services not directly regulated
> by the DOC-NSI cooperative agreement. Second, a registry will have market
> power over its existing users by virtue of "lock-in": that is, to the
> extent that it is difficult for a user to switch to a new registry (because
> it would mean abandoning an existing domain name), a registry will be able
> to exploit users' reluctance to move.
>
> The primary advantage of non-profit registries is that non-profits may be
> less inclined to exploit their market power by charging monopoly rents.
> This advantage is not guaranteed. Non- profits often do not have great
> incentives to reduce costs and prices; a non-profit registry, not subject
> to rigorous cost control, might simply allow its costs to balloon and raise
> prices as necessary to cover them. At least some non-profits, though, may
> do an excellent job of providing registry services at low cost. Again,
> Nominet is exemplary.
>
> For-profit registries have a different set of advantages. Most
> importantly, the registry's interest in making more money will lead it to
> be more energetic in seeking to heighten efficiency, lower prices and
> provide additional value-added services. Similarly, a for-profit registry
> will likely be much more energetic in branding and marketing the TLD. As a
> general matter, one can expect for-profit TLDs to be more likely to come up
> with innovative services and innovative structures, to the benefit of users.
>
> Other mechanisms may address the problem of market power. Remember that a
> registry can derive market power from two possible sources. To the extent
> that that market power simply derives from the attractiveness of the TLD,
> the expansion of the name space will itself provide an answer: As the
> number of gTLDs expands, the attractiveness of any particular gTLD
> vis-a-vis alternative, competing gTLDs will diminish. In the current
> architecture, in which we have only a few gTLDs, users have few credible
> alternatives in choosing a top-level domain. To the extent that users have
> many alternatives, on the other hand, TLD registries will wield little
> market power, and the premium that a TLD registry will be able to charge in
> return for registrations in that domain will shrink. For-profit firms in
> competitive markets have substantial incentive to reduce their costs and
> prices; specifically, in a competitive environment, a registry that wants
> to attract new registrants will keep its costs and its prices low.
>
> To the extent that a registry's market power derives from lock-in, the
> expansion of the name space will not provide an answer. There may,
> however, be other constraints. At least so long as the market is growing,
> a registry will likely have little incentive to put the screws on existing
> customers, because that would discourage new customers. Other mechanisms —
> possibly including the availability of long-term contracts and registry
> codes of conduct discouraging sharp price increases, as well as mechanisms
> making it easier for users to change domain names — may also play a useful
> role in addressing lock-in.
>
> In light of these factors, it would make sense to have a mixed system of
> nonprofit and for-profit registries. Members of each group would have
> something different to offer. Domain name holders most concerned about
> lock-in would be free to use domains run by nonprofits if they thought that
> a safer course; other folks could take advantage of the dynamism and
> innovation of the for-profits.
>
> VII. What should ICANN's process be for selecting new domains and registries?
>
> It is useful to address this question from both a long-term and a
> short-term vantage point. In the long term, ICANN can take one of two
> approaches. Under the first approach, ICANN would select new gTLDs to be
> added, and then solicit applications from would-be registries to run those
> gTLDs. Under the second, ICANN would accredit registries by reference to
> criteria including the applicants' technical abilities to perform registry
> services and financial stability, and the registries would then decide for
> themselves what the names of their gTLDs would be (subject to a process
> under which ICANN could resolve conflicts, and could deem certain gTLD
> strings out of bounds).
>
> Notwithstanding that these two approaches are often presented as radically
> different, they are more similar than they appear. Under either approach,
> a relatively small group of people will choose the names of the new gTLDs.
> Under the first, the decision will be made by ICANN decision-makers, on the
> basis of their views as to which new gTLDs would be most beneficial to the
> community. Under the second, the decision will be made by registry
> operators, on the basis of their views as to which new gTLDs are most
> desired by the community (that being the course that will generate the most
> registration dollars). These are similar considerations, and will likely
> result in similar sets of names.
>
> Under either approach, if ICANN lets *enough* new TLDs into the root, it
> will be the Internet users themselves who ultimately decide which gTLDs
> succeed and which will fail. Users will make their own choices as to which
> top-level domains to register names in; as a result, some new gTLDs will
> thrive, and some will stagnate. It will be the community that decides.
>
> In that respect, ICANN's choice between these two approaches is not
> crucial. What is most important is that ICANN adopt a policy under which
> it is relatively easy to get new gTLDs into the root (whether operated by a
> newly created registry or an already-existing one). Thus, ICANN's criteria
> for the qualification of new registries should not be unreasonably
> burdensome. Moreover, to the extent ICANN passes directly on the content
> of a proposed new TLD string, its processes should be geared towards
> approval without extensive delays. Finally, aside from its reasonable
> limitation on the *pace* of gTLD expansion during the phased rollout
> period, ICANN should not seek to limit the total number of gTLDs short of
> the bounds of the technically feasible and operationally stable. If
> ICANN's process satisfies these criteria, then either of the selection
> processes described above will work.
>
> The remaining important question is that of the short-term: How should
> ICANN proceed during the testbed and phased rollout, to the extent that
> more registries seek immediate inclusion of their preferred gTLDs than the
> schedule will accommodate? There is no especially satisfactory answer to
> this question; by hypothesis, some qualified applications will have to be
> deferred. None of the available paths to decision are ideal. The process
> that would likely make ICANN itself most comfortable would be an ad hoc
> selection process under which ICANN was free to look to a variety of
> factors, including both the qualifications of the registry and the nature
> of the TLD. In the long term, such an approach would not be desirable; it
> presents the risk of subjective and unaccountable decision-making. In the
> short term, however, as a matter of supervising the initial rollout, it
> would be responsive to oft-expressed concerns about Internet stability and
> reliability.
>
> Jon
>
> Jonathan Weinberg
> weinberg@msen.com
--
Rod Dixon, J.D., LL.M.
Visiting Assistant Professor of Law
Rutgers University School of Law - Camden
rod@cyberspaces.org
http://www.cyberspaces.org