What the House testimonies tell us

ICANN is nervous about a new economic study, and grateful to the US government for supporting it at a crucial time; the Association of National Advertisers (ANA) is pleased with the results of its six-month campaign but has accepted defeat; and the IP industry wants a pre-registration blocking system as a final concession before hundreds of new Internet extensions are applied for in the new year...

That is what we have gleaned from reviewing the testimonies of six witnesses due to speak at a Congressional Hearing run by the House Subcommittee on Communications and Technology on the “new gTLD” program tomorrow morning.

Somewhat unusually, almost the exact same hearing was held last week in the other part of Congress – the Senate’s Committee on Commerce, Science, and Transportation – which has provided the opportunity to see what has changed in the main actor’s minds over the past few days.

Three of the six witnesses are the same: Fiona Alexander of the arm of the US government dealing with the program (the NTIA); Kurt Pritz of ICANN, the organization in charge of the program; and Dan Jaffe, from the ANA which has been on a determined campaign to force reconsideration or delay of the rollout of potentially thousands of new Internet extensions.

Spot the difference

We’ve gone through these three representatives’ statements and noted the differences from last week. They are telling.

The NTIA has provided the exact same testimony to both hearings. Which means it stands by its main point: the process is what it is, many of the biggest concerns have been dealt with and now is the time to get on with the program.

ICANN on the other hand has demonstrated its wounded ego and safety-in-verbiage approach by making a range of small changes through the document and adding a further 13 references to other documents, bringing the total number to 49.

ICANN’s testimony is double the size of the next largest and three-and-a-half times the size of the average testimony length, running to 30 pages.

ICANN has added a number of things to its testimony, including:

• A note that the program was “thoroughly discussed and debated” and now represents the “best compromise”
• A note that the program contains “new safeguards”
• A claim that there are “stringent qualification requirements” for applications.
• A timetable for when new extensions will actually appear on the Internet (earliest 2013)
• A telling change from talking about those who are “eager for the program to launch” to them having “stuck to their end of the bargain”, and
• A paragraph pointing to the positive benefits that may come from new extensions:
  

  “Think of the trust that your constituents have when visiting a dot-gov website, and the assurance they have that when they visit a page ending in house.gov, they are accessing information about the House of Representatives. This is similar to what American businesses can provide to their customers around the world with a dot-brand TLD.

Most significant however is the inclusion of several paragraphs highlighting a speech given by Assistant Commerce Secretary Larry Strickling last week in which he came to the defense of ICANN and criticised those asking for a delay as “providing ammunition” to countries that want to pull governance of the Internet into a government-run system.

Clearly grateful, and wary of annoying the Department of Commerce, ICANN has pulled out a reference to its running the IANA database in this testimony – something that has been the subject of some intense maneuvering over the past year and which is currently out for open tender.

Despite Strickling’s support, the one thing that continues to worry ICANN is the production of a new economic report from Robert E. Hall and Carole McNeil, Professor of Economics at Stanford University and Senior Fellow at Stanford’s Hoover Institution respectively. They sent a letter last week with respect to the program which argued the benefits to new gTLDs were “negligible. The costs are not.”

ICANN has attempted to blow this argument off by painting it as “a last minute effort to sway the views of those in government rather than a meaningful attempt to alter the policy within the policy process”. It then points to its own economic studies which have, unfortunately for ICANN, never been accepted by the broader community.

The flipside

On the other side to ICANN is the ANA which has made the most of the results of its extensive campaign against the program by adding additional information and quotes from the two Congressional hearings it has managed to influence.

In terms of campaigning, the real coup came when, unexpectedly, FTC chairman Jon Leibowitz was asked in an unrelated hearing about the new gTLD program and replied that it could be “a disaster for businesses and consumers”. The ANA understandably makes much of this in its testimony.

It also takes quotes from the most forthright Senator in last week’s hearing, Senator Kelly Ayotte, and hits home with the fact that ICANN is still in negotiations with registrars about change to be made to their contracts – just a month before the program launches.

“Why are we to believe that ICANN, after five years of such awareness, will now fix its law enforcement problems in one short month before the application window is opened?,” the ANA asks, not unreasonably.

And of course, the ANA makes much of the Hall/McNeil economic analysis that has concerned ICANN and pulls in several examples from last week’s launch of the dot-xxx extension to make its point.

Despite these “wins” in Washington, however, the ANA effectively concedes defeat in a response to the Strickling speech used by ICANN. It agrees with many of Strickling points, but argues that he hasn’t fully considered the negative impact the program will have.

Nevertheless the organization has pulled from its conclusion the argument that the NTIA should step in, or that the program can be delayed by anyone other than ICANN. Instead it aggressively pleas with ICANN knowing it won’t listen: “We believe it would be totally irresponsible and reckless for ICANN to proceed full-speed ahead with the roll-out next month.”

And the other three?

The case of CADNA and its representative Josh Bourne is an interesting one. Originally created to make ICANN deal with some serious problems in its own systems for registering domains, CADNA has taken a fiercely critical stance for several years, often holding what amount to anti-ICANN meetings to which ICANN staff have pointedly not been invited.

That is not to say that CADNA hasn’t had some persuasive points to make over the years. It has also been a useful source of statistics and information about the real problems with the current system where ICANN has been either willfully ignorant or blissfully unaware.

However, the organization has been forced to make a painful U-turn in the past month from outright opposition to begrudging supporter as the economics of the situation have shifted now that the program is closer to reality. CADNA’s staff last month started advertising their consultancy services for new gTLDs (through the Fairwinds Partners consultancy that started CADNA) and shortly after, CADNA took a more relaxed position to new Internet extensions.

However, CADNA at its heart is an organization focused on finding pragmatic changes and so the testimony focuses on four changes that ICANN could still make at this late stage.

They are:

• Declare when the next round of applications will be
• Allow brand owners to purchase a block for their trademarks before registration
• Audit the running of the IANA contract - if ICANN gets it
• Improve anti-cybersquatting legislation (something for Congress rather than ICANN), and
• Lower the cost for those that make a number of gTLD applications - if they have trademarks

The second and last items of CADNA’s list will be reiterated by the mandatory IP lawyer at this hearing – this time from the Better Business Bureau.

It would seem that in any hearing concerning the domain name system, an IP lawyer is located from somewhere in order to make the same points as another witness, presumably to reinforce them in Congress’ minds.

And finally

Extraordinarily, the House hearing may then actually hear from someone who thinks new Internet extensions are actually a good idea.

Considering one of the biggest complaints of the anti-gTLD lobby has been the expected high number of applications, it is unusual that over three Congressional hearings no one has been called that can actually put across while they are willing to part with $185,000 just to apply to enter a very uncertain and new market.

Enter Thomas Embrescia, CEO of Employ Media, the company that runs dot-jobs. Dot-what? Yes, dot-jobs – it has been around for years but no one has really taken to it.

We predicted that Embrescia would come out against ICANN because of an ongoing dispute with the organization that has demonstrated – not for the first time – that ICANN is incapable of dealing with situations outside its own control.

Embrescia may still do just that, but his testimony is, at least in terms of the Washington DC conversation over new gTLDs, a breath of fresh air.

Arguing that new gTLDs are a good thing and “should be encouraged”, Embrescia draws reference to the historic AM/FM radio fight as well as to VHF and the extra competition created when cable companies such as CNN and HBO were allowed into the tightly controlled US television market. New Internet extensions offer an opportunity to "super serve" a particular community, he argues, and that will be a “spur to innovation and job creation”.

And so…

And so, we can expect to see more fireworks tomorrow but it should be the last night, the big ‘End of Year Extravaganza’ before the program kicks off in 2012.

The ANA will be frustrated but will have notched up a good campaign; the IP lawyers will have got only 95 percent of what they want, which will continue to feed their fury through to the next controversy; CADNA will make money from all the clients it met during the war with Eastasia and point them to the war in Eurasia; the NTIA will continue its quiet, thankless task of making things work in the background; and ICANN – well, ICANN will licks its wounds and then once it has recovered, tells itself bravely in the mirror that it beat everyone through its own courage and cunning.