Here are some quick notes on the new Draft Applicant Guidebook 3, published today by ICANN.
I’ve restricted my comments to new stuff, what’s changed since the last version. This post is really intended for people who are somewhat familiar with the older versions of the DAG and want a quick update. I’m sure it’s incomplete: rely on it at your own peril.
With one exception, the overall balance of the DAG has not changed. It has filled out; it’s bigger and more detailed. Processes are better explained. It’s a more mature document. For new TLD applicants, it’s mostly neutral to good, with no major surprises. It foresees more auctions than the previous version, and I would suggest giving a close look to the auction section (Module 4), especially the section on deposits required before bidding.
The one exception to this generally reasonable Guidebook is simply amazing to me: ICANN has acceded to the wildest demand of the IRT and set up a court (run by WIPO) where any trademark holder can file multiple inexpensive complaints against registries and then, unilaterally, without even notifying ICANN, impose penalties on registries up to and including shutting it down. WIPO, however, does graciously allow the registry to appeal the decision to a court.
I’m surprised that ICANN is even considering this monstrous miscarriage, set up to air the private grievances of only one of many constituencies within ICANN, because it severely undermines ICANN’s authority. Some of the IRT objections were workable and helpful, such as the establishment of an electronic clearing house of trademarks. This one, however, goes against everything that ICANN ought to stand for: transparency, impartiality, due process, and primacy of the entire ICANN community — not just one part of it.
With that, here are my (very) quick initial thoughts on ICANN’s Draft Applicant Guidebook 3 and accompanying documents. Numbers refer to the Guidebook section headers.
Module 1 – Introduction
1.1.2.2 – Four weeks after the end of submission period, all applications published. After that, evaluation period begins.
1.1.2.3 – Initial evaluation period will take 5 months (previously it was 4).
1.1.2.9 – A straightforward application (i.e., no objections or threats to DNS) could take as little as 8 months; a complicated one could take as much as 19 months.
1.1.3 – ICANN is no longer doing “due diligence” on public comments — they will simply take them into account.
1.2.1.a – ICANN may deny the application of a company where any director has a criminal record or any shareholder with 15% or more has a criminal record. Or even if they are simply accused.
1.2.1.b – Disqualifies anyone (i.e., many domainers) who have lost more than two UDRP cases (the actual standard is “pattern of abuse,” which I would think takes a minimum of 3 lost UDRP cases). Why are not reverse hijackers who have shown a “pattern of abuse” disqualified as well?
1.2.3.1 – New terminology — there are “community” applications (as before) and “standard” applications (e.g., not community apps)
1.2.3.2 – Community apps can elect whether they want to go to a comparative evaluation
1.2.3.2 – In the event that comparative evaluation does not produce a clear winner (“overwhelming support”), it goes to auction.
1.2.7 – “High Security” seal of approval for registries. Does not affect application but if you go through a thorough exam they will give you a seal. Costs money.
1.3 – Long note on IDN variants and the problems that arise from them. Nothing substantively worrying, but the fact that this issue has not been solved may mean that it might take a while to work it out.
1.5.1 — If you pull out at any time before the results of the initial evaluation are published, you get $130K back from your $185K application fee. So the cost of playing may be as little as $55K. I predict that deals will be made during the 4-5 months of the initial evaluation, when everyone will know everyone else’s application, but the evaluation panels will not yet have given their blessings.
Module 2 – Evaluation Procedures
2.2.1.1 – String contention. Your competitors can object to your application as “confusing” even if ICANN’s panel did not find it so:
An application that passes the string similarity review is still subject to challenge by an existing TLD operator or by another gTLD applicant in the current application round. That process requires that a string confusion objection be filed by an objector having the standing to make such an objection. Such category of objection is not limited to visual similarity. Rather, confusion based on any type of similarity (including visual, aural, or similarity of meaning) may be claimed by an objector.
2.1.1.4.1 – New(-ish) rule for geographical names:
In the event that there is more than one relevant government or public authority for the applied-for gTLD string, the applicant must provide documentation of support or non-objection from all the relevant governments or public authorities.
This will complicate the application for any capital city, either of a nation, e.g. Moscow, Berlin, Paris, London, etc., or a state, e.g. Munich, Austin, Sydney.
2.1.1.4.2 – Who is the representative of a geographical region? Unclear, and dangerous:
The documentation of support or non-objection should include a signed letter from the relevant government or public authority. Understanding that this will differ across the respective jurisdictions, the letter could be signed by the minister with the portfolio responsible for domain name administration, ICT, foreign affairs or the Office of the Prime Minister or President of the relevant jurisdiction; or a senior representative of the agency or department responsible for domain name administration, ICT, foreign affairs, or the Office of the Prime Minister. To assist the applicant in determining who the relevant government or public authority may be for a potential geographic name, the applicant may wish to consult with the relevant Governmental Advisory Committee (GAC) representative.
Note that consulting with the GAC member doesn’t mean you can rely on his/her advice. Some GAC members are pur et dur new TLD haters, so this might be an excellent way to sabotage your TLD application.
2.1.1.4.2 – Letter from governments needs to show understanding of relationship with ICANN:
The letter should also demonstrate the government’s or public authority’s understanding that the string is being sought through the gTLD application process and the applicant is willing to accept the conditions under which the string will be available, i.e., entry into a registry agreement with ICANN requiring compliance with consensus policies and payment of fees.
2.1.1.4.3 – Geographical review – If there’s a standard letter of non-objection from the government, and more than one party qualifies, the whole thing is suspended until the parties work it out:
If there is more than one application for a string representing a certain geographical name as described in this section, and the applications are considered complete (i.e., have requisite government approvals), the applications will be suspended pending resolution by the applicants.
2.3 – This entire section is new. Talks about evaluators and their code of conduct, conflicts of interest, etc. Sorely needed, and welcome.
Of note: ICANN has named five new panels instead of the amorphous evaluators of yester-yore. In addition to the already-existing Registry Services Technical Evaluation Panel (RSTEP), we have the String Similarity Panel, the DNS Stability Panel, the Geographical Names Panel, the Technical Evaluation Panel, and the Financial Evaluation Panel — all without acronyms!
Module 3 – Dispute Resolution Procedures
3.1.2.3 – The new DAG says anyone can file a “morality and public order” objection, but ICANN will do a quick check to make sure it’s not “frivolous” or “abusive.” Close one can of worms, open another.
3.1.2.4 – It’s now easier to object on community grounds:
The panel will perform a balancing of the factors listed above in making its determination. It is not expected that an objector must demonstrate satisfaction of each and every factor considered in order to satisfy the standing requirements.
3.1.5 – Independent Objector. ICANN has the following problem: how to get rid of “bad” TLD applications that somehow nonetheless conform to the DAG rules. Answer: get someone else do it. As of this draft of the DAG, the Independent Objector (IO) can object to pretty much anything. Evaluation panelists have a code of conduct and conflict of interest rules; the IO has no such restrictions. He or she (it is a single individual) can have no ties to those applying for new gTLDs, but there is no restriction about ties to people who hate new TLDs. Unfortunately, this is a loophole big enough to drive a truck through.
3.4.4 – Community Objection. Objector has to prove all four elements of an objection: (1) that the community exists; (2) that there is substantial opposition; (3) that the new TLD is targeting that community; and (4) that detriment to the community will result. Significantly, there is a new sentence:
If opposition by a community is determined, but there is no likelihood of detriment to the community resulting from the applicant’s operation of the applied-for gTLD, the objection will fail.
Appended Document: WIPO’s “legal rights” objection procedures. WIPO was chosen to hear “legal rights” objections, and they have published procedures. The document is very long-winded, and there’s not much here except WIPO’s reservation of its right to consolidate cases. Of note, experts appointed by WIPO are supposed to impartial and independent (9.1). You can challenge them if you don’t think they are. Fees consist of DSRP fee (WIPO’s cut, I image), plus a panel fee. Cheapest is $10K – $2K DSRP fee, $8K for a single panelist. Most expensive is $23K — $3K DSRP fee, $20K for a 3-person panel.
Module 4 – String Contention
4.1.1 – An applicant can file an objection against a “confusingly similar” applicant even if the String Similarity Panel didn’t find any similarity.
If an applicant files a string confusion objection against another application, and the panel finds that string confusion does not exist (that is, finds in favor of the responding applicant), the two applications may both move forward and will not be considered in direct contention with one another.
4.2.1 – Community applications can opt for evaluation rather than an auction. A deposit is required. If you don’t score 14 or more on the community criteria, you lose your deposit.
4.2.2 – If there are two community apps that score 14 or higher on the community test (I assume that this goes for geo TLDs as well, which are by definition community applications), then the process stops. No-one gets anything until they work it out.
4.2.3 – New scoring for communities. Must get 14 points. There’s a long set of rules and scoring, but the bottom line is that no-one is going to pass except highly restricted communities. Unfortunately, ICANN is really hampering viable community TLDs with these rules. To get the TLD, you are incentivized to make them as restrictive as possible. The side effect is that you may not have much of a market after you’re done excluding all outliers, and you may not have much of an operating surplus after you’ve thoroughly investigated every application, and you may not have much of a customer base after you spend weeks checking them out before you give them a name. Bad move here IMO.
4.3.1 – Auction procedures. Ascending clock auction. Handy diagram on Page 4-24. Of note: each round requires a deposit of 10% of the bidder’s maximum bid, and you can’t bid more than your deposit allows. For instance, a deposit of $1000 allows you to bid up to $10,000. If you’re rich and you don’t want to have to bother with all the pesky wiring of deposits for each round, you can stash a chunk of change (amount to be determined) with ICANN and you can bid as high as you want. You get 20 days to send in all the money. If you don’t pay up, you have to pay 10% of the maximum bid — in other words, your deposit.
Module 5 – Transition to Delegation
5.1 There’s a much-revised draft registry contract… Many changes, I’ll let the lawyers tackle this one.
5.2.1 – Technical testing procedures outlined. Exhaustive documentation required, but registries will self-certify. You have to show complete data, but ICANN is not going to send in a “red team.”
5.4 – A list of all the things you have to do as a registry if you don’t want ICANN to de-certify you. Short form: do whatever ICANN tells you to do, including paying them. ICANN’s obligations? Follow its bylaws and operate in a transparent manner. As ever.
WIPO’s Post-Delegation Dispute Resolution Procedure
Trademark Post-Delegation Dispute Resolution Procedure. Of all the IRT recommendations, this was the worst, and yet it made it through to this DAG. Ugh. Basically, trademark holders can haul a registry up on trial for either (a) infringing its trademark at the top level (e.g. .DELTA, the community registry for the Mississippi Delta region, starts selling faucets or airline tickets), or (b) allowing trademark infringements at the second level. The first is very unlikely, the second is difficult to police for someone who isn’t a trademark lawyer.
Fees are not specified but are set by the single-person or three-person panel. So, expect about the same as a UDRP – $5 – $10K.
Apparently WIPO is going to appoint an “independent” expert, who will have absolute power. Here is a telling paragraph (my emphasis):
The parties to the dispute will be the trademark holder and the gTLD registry operator. (Although there has been some suggestion that prior to commencing such a procedure, that ICANN first be notified and asked to investigate, from a practical standpoint, it does not make sense to add this layer to the procedure. It would unnecessarily slow the process.)
(New TLD applicants, of course, are painfully familiar with how much trademark owners hate slowing things down. Sigh.) In essence, WIPO will allow anyone to file any number of complaints, and ICANN will not even be notified. There is a toothless paragraph about abusive filings, but sanctions are weak. They certainly don’t include shutting down the complainant’s business.
If this distinguished independent court doesn’t like how the registry is behaving, the sanctions include:
- Monetary sanctions intended to equal the financial harm to the complainant;
- Suspension of accepting new domain name registrations in the gTLD until such time as the violation(s) is cured or a set period of time;
- or, in extraordinary circumstances, providing for the termination of a Registry Agreement.
Don’t like it? Appeal it in court.
If this goes through, I would counsel all potential registries to hire the best lawyer they can, he or she will be busy. With the best will in the world, some abusive registrations will slip through, and trademark holders will use this instead of the UDRP to punish “bad” registries. A truly unfair and unworkable provision.
Module 6 – Terms and Conditions
6.1 – If you lie on your application, ICANN may keep your application fee, even if otherwise you would have been entitled to a partial refund.
That’s it! I tried to be complete without being long-winded. If I missed something, please leave a comment.
New York City announced that it will seek the .NYC web address, making it the first U.S. city to seek a top-level domain. New York City now joins Barcelona, Berlin, London, Paris and Rome as a global city applying for its own web address.