- New gTLD database
FTC and Congressmen argue for new gTLD scale-back
by Kieren McCarthy | 17 Dec 2011 |
Political pressure to delay or limit the program for potentially thousands of new Internet extensions has further increased with not one but two highly critical letters from the US establishment.
Writing to the organization responsible for the program, ICANN, the Federal Trade Commission (FTC) has produced a searing indictment of the organization's failure to tackle authentication issues with the domain name system over the course of a decade. It "urges" ICANN to introduce a "pilot program" rather than proceed with a full rollout in January.
A second letter sent to Commerce Secretary John Bryson from two House representatives - Congressman Bob Goodlatte and Congressman Howard Berman - also asks for a limited pilot program, this time arguing that it is needed to prevent widespread trademark infringement.
The two letters come following a tumultuous week for ICANN in Washington.
Thanks to a six-month campaign against the new gTLD rollout, led by the Association of National Advertisers (ANA) and resulting in significant negative press, ICANN was preparing for a hostile reception at a Senate hearing called to review the program on Thursday 8 December.
The day before that hearing however concerns about the program hit public awareness when FTC chair Jon Leibowitz noted he was "very, very concerned" about the program and that it could prove to be a "disaster for businesses and consumers". A second hearing into the program was then announced by the House Judiciary Committee.
Amid a flurry of negative commentary and a raft of critical voices against the program in both hearings, it was only the intervention of the Department of Commerce, particularly a speech given Assistant Commerce Secretary Larry Strickling, that saved the organization from full political fall-out.
What the letters say - FTC
The FTC letter is a lengthy and in-depth review of ICANN's failings to tackle two main issues: the accuracy of "Whois" data (information that identifies the owner of a given domain name); and enforcing compliance with existing rules on domain name sales and transfers.
The 15-page document concludes that "the dramatic introduction of new gTLDs poses significant risks to consumers" and asks ICANN to take five steps before it opens up the new gTLD program.
- Introduce a pilot program with a "substantially reduced" number of new Internet extensions
- Strengthen its compliance program, in particular by hiring more staff
- Create a new program to monitor consumer issues in new extensions
- Assess each new proposed gTLD in terms of risk of consumer harm
- Improve the accuracy of Whois data by, among other things, forcing new registrants to verify their identity
It argues that "if ICANN fails to address these issues responsibly, the introduction of new gTLDs could pose a significant threat to consumers and undermine consumer confidence in the Internet."
The letter provides extensive evidence of the problems caused by ICANN's failure to grasp policy issues surrounding Whois, and excoriates it for failed promises over the organization's compliance program. "The FTC has highlighted these concerns about Whois with ICANN and other stakeholders for more than a decade," it notes.
It also paints the open rollout of new extensions in very negative terms. New registries could prove to be "a haven for malicious conduct", and the expansion "only increases the risk of a lawless frontier in which bad actors violate contractual provisions with impunity".
It dismisses ICANN's efforts to deal with the situation by introducing a range of new measures in the new gTLD "Applicant Guidebook" as "modest improvements" and notes that "overarching consumer protection concerns persist".
It also digs into ICANN's compliance issue and previous promises for improvement, listing a series of organizational failures on ICANN's part. "Contrary to the Board’s commitment, ICANN has not yet hired additional compliance staff to support the registry contract support program," the letter notes.
Another excerpt: "In FY12, ICANN budgeted only a 25 percent increase for all contractual compliance resources, despite the likelihood that the number of new gTLD contracts could increase in 2013 by over 2000 percent."
And more precise criticism: "Further, the total expected staffing level for contractual compliance in FY12 is equal to the staffing level in FY10, lacking the substantial increase necessary to respond to additional compliance issues resulting from the introduction of new gTLDs."
The letter also makes frequently mention of ICANN's own independent review into the Whois issue, published earlier this month, in support for many of its points.
In overall summary, ICANN's efforts over the past decade have been "woefully inadequate" according to the FTC, which is why it believes ICANN should reduce the current gTLD program to a limited pilot.
What the letters say - Goodlatte and Berman
Congressmen Goodlatte and Berman: Strong proponents of intellectual property
The letter from the Congressmen to the Commerce Secretary focuses on the concerns raised by intellectual property lawyers from a wide range of companies across a number of industries.
"We write to express serious concerns about the decision by the Internet Corporation for Assigned Names and Numbers (ICANN) to dramatically expand the number of generic Top Level Domain names (gTLDs) without adequate review of the impact of a full implementation," it begins, before arguing that the Department of Commerce (DoC) has a "responsibility to ensure that ICANN's actions further the public interest and promote consumer trust".
The letter's main concern is the impact of the program "on businesses that will be required to defend their intellectual property over an unlimited number of new top level domains". Businesses will "be forced to engage in widespread brand monitoring and litigation", it argues, quoting a survey from the Intellectual Property Owners Association.
It then connects these costs - and the potential additional cost of an auction for a top-level domain - to higher prices charged to consumers. It quotes FTC chair Leibowitz's comments about the rollout being a potential disaster for businesses and consumers.
As a result, the letter requests that Commerce Secretary Bryson provides answers to five questions, each of which asks the department to outline what assessments it has made with respect to different parts of the gTLD program.
Analysis and impact
It is not surprising given the high level of interest in Washington this month, combined with intensive lobbying on the part of intellectual property interests, and the impending rollout of the program that there would be letters of this nature.
In fact, there are a great many more letters, including one from the legal counsel of the world's largest international organizations, a vast array of small associations and lobbying groups, and even letters from ICANN's own constituencies.
Of the two letters, the FTC's is far more troublesome since it provides significant evidence of poor practice over a long period of time at ICANN. Even ICANN's strongest supporters will concede that it has failed to grasp the Whois problem for a decade and that its compliance efforts have risen and fallen but never met a sufficiently high standard.
The Congressmen's letter is more a political play aimed at demonstrating that they are doing whatever they can to protect intellectual property rights. Following Strickling's speech, the only thing that can force a delay in the gTLD program is a DoC decision to reverse its position. That will not happen, but the Congressmen in response have fired a shot at the department for shutting down that avenue. It is also an attempt to add to the pressure on ICANN to go for a limited rollout.
It is noteworthy that the letter comes from Congressmen Goodlatte and Berman, and does not include any of the other members of the House Judiciary Committee.
Both Congressmen have recently come under sustained criticism for their defense of the Stop Online Piracy Act (SOPA) and efforts to force it through before the holidays despite widespread and very public concern about its contents. Ultimately, that effort was abandoned yesterday. It is all too likely that this letter over the IP rights in Internet extensions is related to the failure to push through SOPA and comes in response to a bitterly disappointed IP industry, whose proponents are the main funders of both Congressmen's campaigns.
Unfortunately, it has been yet another poor week for ICANN. While its CEO was flying around the world painting an entirely positive picture of the new gTLD program to audiences in Beijing and Moscow, the organization and its senior vice president and the organization itself was being hauled over the coals for their failure to deal with known problems.
ICANN's Kurt Pritz giving testimony this week
ICANN didn't even fire a shot in the public relations war that erupted around Washington and reached as far as New York and Geneva. Saved only by three public interventions by the US government, the organization is in a weak position and shows few signs of being able to find its way out of it.
In an update to the organization's main policy body, the GNSO, given by Pritz the day after the last hearing, he gave little indication that the organization has acknowledged the need to drastically improve both its operational and communication efforts.
Asked about the possibility of a delay in the program, Pritz answered that the risk of a delay was "above zero" but noted the strength of the Department of Commerce's position.
Just hours later the latest two letters were fired at the new gTLD program.
As to whether there will be a limited "pilot program". The answer to that most likely rests with the Department of Commerce.
With ICANN, in Pritz's words, "quite foggy" about the whole issue, and its CEO still absent without leave, the organization is effectively reliant on what the US government thinks is the best course of action: a sorry situation for an organization that stepped out from under US government control more than two years ago.
What is our feeling? That the new gTLD program will go ahead as planned. But if ICANN doesn't seriously improve its game, it is quite clear that the groundwork has already been laid for the organization as it currently exists to be pulled apart and restructured with stronger governmental oversight.