Blog: draft applicant guidebook

Some TLD applicants have been saying that they’re “community” applications, which means that would avoid an auction and prevail over even deep-pocketed competitors. But according to ICANN’s Applicant Guidebook, very few if any applications will qualify as a community. If you’re an applicant who’s been telling your supporters or investors that you’re going to win because you’re a community, you might want to take a step back.

This post will look at the reality of who will gain community status under ICANN rules. A few already-announced TLD applications that are commonly thought to be communities — but none of them are even close to qualifying.

One announced applicant for .ECO keeps putting out notices about the “.ECO community.” A .GAY applicant makes lots of references to the gay community. And a well known .MUSIC applicant wrote a blog post just a few months ago that he would file a community application. (Note: Minds + Machines has announced support for bids for .ECO and .GAY — so we’ve looked at this question closely.)

Most people would say there is such a thing as the gay community, maybe music and eco communities not so much. But it doesn’t matter: from the ICANN point of view none of them will qualify for “community status” in their gTLD application. Under ICANN rules, even the “ICANN community” wouldn’t qualify as a community.

Scoring the Apps

Let’s score .ECO, .GAY, and .MUSIC. Turn to section 4.2.3 of the Guidebook, called “Community Priority Evaluation Criteria” and read through how they will score each criterion. Remember, you have to get 14 out of 16 points to beat out your non-community competitor. If you don’t get 14 points, you can still proceed to an auction, but you’re stuck with all the rules you put in place to try to qualify as a community.

Here is a table showing how I would score each of these TLDs would score in a “community priority evaluation.” If you go through the guidebook and score them yourself, you might disagree by a point or maybe two, but if you did, they would get a lower score. The scoring I used is very generous. Explanations follow the table:

Let’s go through it. There are four criteria groupings, and subparts below each one.

Criterion 1: Community Establishment

Part A is “delineation,” which means a “clear and straightforward membership definition.” Members of .ECO are…? People who believe in ecological causes? Not terribly clear. Score of 1. .MUSIC? People who like music? Even worse but there is some connection, a charitable score of 1. .GAY? People who say they are gay? Leaving aside how they’re going to check (that comes later), it’s not super clear, especially as the gay community itself typically embraces bisexual and transgendered people. Generously, we will give .ECO 1, .GAY 1, .MUSIC 0.

Part B is “extension,” which means a community of “considerable size and longevity.” If you accept that these are communities, everyone here scores 2 out of 2.

Criterion 2: Nexus of the Proposed String and Community

Part A is “Nexus,” which looks at how closely the TLD name describes the supposed community. ECO doesn’t really match the name of the movement (it is also called the green movement, or the conservation movement), MUSIC isn’t really about people, but OK, and GAY pretty much means gay people. Out of a possible 3, I score .ECO 1, .GAY 3, .MUSIC 2.

Part B is “Uniqueness,” which asks if there is any other meaning of the word. ECO could easily mean “economics,” GAY doesn’t really mean anything else these days, and MUSIC means lots of things, as big generic words do. Out of 1, .ECO gets 0, .GAY 1, and .MUSIC 0.

Criterion 3: Registration Policies.

The stricter you are, the higher you score. Because you can set your own registration policies, everyone gets the maximum score on this one, though on an application they might not, since super-tight registration rules are suicidal for most TLDs. Also, if you don’t pass the community test, you still have to enforce your registration policies (more on that below). So, as a very generous “gimme”: out of 4 possible points: .ECO 4, .GAY 4, .MUSIC 4.

Criterion 4: Community Endorsement

This is where community applications go to die. If there is any significant objection to your application carrying the banner for the community, you will lose two points, which means that you have to be perfect on every other point — highly unlikely.

Part A is “Support.” If everyone supports you, 2 pts; if you have some support, 1 pt.; no support, a zero. Out of 2 pts., .ECO gets 1, .GAY gets 1, .MUSIC gets 1

Part B is “Opposition,” which can easily come from your competitors. The standard is “relevant opposition from one [or more] group of non-negligible size.” They don’t have to prevail in their opposition for you to lose points — they just have to file. I think all of these applications will have some opposition from more than one quarter. Out of a possible 2 pts., I have .ECO with 0, .GAY 0, .MUSIC 0.

.GAY is clearly the strongest case for community of these three applications, but still falls far short at 12 pts out of 16. .ECO and .MUSIC don’t even come close.

So Who Is a Community?

The only way to make sure you qualify as a community is to *be* the community. The American Association of Retired Persons (AARP) could get .AARP as a community TLD, because they own the entire name: there is no-one who could object. In this sense a community in the ICANN sense is just like a brand, complete with intellectual property rights, except that it may not have a corporate structure or a profit motive. Otherwise I can see very little difference.

The key factor in the way ICANN has set this up is that although it’s very hard to qualify as a community, it’s very easy to object to one, and that’s where community applications will falter even if they are strong in other areas. Any institution of “non-negligible size” that claims to represent a community (loosely defined) can object to a community (very tightly defined) application. If one such institution objects, you lose a point. If two or more do, you lose two points. (They can object even if you’re not a community, but in that case they have to prevail — a community application loses points even if the objection is not upheld.)

Bottom Line: Think Very Hard Before Applying As a Community

If you have a competitor with some support, or if you haven’t made sure that every organization in your community is on board, you are highly unlikely to pass the community priority evaluation. And since that evaluation only happens if you do have a competitor or a community objection, in most cases it makes no sense to apply as a community. If you have credible competition, you almost certainly will not pass the community priority evaluation, and you will be stuck with restrictive policies that will be very hard to change later.

ICANN’s 38th get-together, in Brussels, may become known as the meeting where the dust finally began to settle. Long-standing issues were settled, compromises were reached, no-one complained too much about the latest version of the Applicant Guidebook, and the Board stood by its project plan dates, even scheduling a Board retreat to solve remaining issues. Finally, there were no surprise “gotcha!” delays that gTLD applicants have been used to seeing at ICANN meeting. With one possible exception…

September Board Retreat – Good News

ICANN’s Board of Directors is going to take a special retreat, tentatively scheduled for September 2010, to try to sort out the remaining gTLD issues. This was publicly announced by Chairman Peter Dengate-Thrush and much discussed during the Brussels meeting. It is likely that the Board will hammer out some solutions on issues where opposing camps are insisting on their advantages and refusing to compromise.

The Board seems to be taking their task seriously, putting enormous pressure on various working groups (see my notes on the vertical integration working group, below) to produce proposals prior to their retreat. Applicants should be pleased with the vigor with which the Board has decided to address the remaining logjams.

.XXX Decision – Good News

The Board’s decision to green-light .XXX means new gTLD applicants can breathe a sigh of relief. The approval means that the new gTLDs program will not be threatened by .XXX-inspired court interference in the gTLD process. ICM Registry, .XXX’s sponsor, would almost certainly have sued ICANN if the decision had gone differently, and very likely they would have asked for an injunction to stop the introduction of new gTLDs — and they might have been successful. The ICANN Board decision to go ahead with .XXX, however heavily hedged with caveats, removes this threat. That’s good news for gTLD applicants.

Most of the press I’ve seen makes it seem as if .XXX is a done deal, and will be inserted into the root in short order. Unfortunately for the 162,000 reported pre-registration applications for .XXX, we are very far from that. One of the more intelligent analyses of the Board’s resolution is theTom Hymes story at AVN. To their credit, ICM’s blog has a thorough and fact-filled rundown of the remaining obstacles. My own assessment of .XXX isn’t very positive, but it is a good sign that ICANN is letting itself be compelled to following its own rules.

Intellectual Property Issues – Good News

Trademark advocates at ICANN will tell you that they are the reasonable ones, that the people who are unalterably opposed to new gTLDs don’t even show up at ICANN meetings. That may be, but members of ICANN’s intellectual property constituency have hardly been pushovers. Therefore it was a pleasure to witness hardline opponents to new gTLDs, including sharp critics from the BBC, Nestle, and the American Red Cross talk constructively about how they could benefit from them at a panel called “Brand Management in the Age of New gTLDs.”

For instance, Charlotte Walters of Orange (the phone company) had this to say:

I think we’re all about building and driving brand value, in which case if you have an asset that could become a mark of value and a mark of quality so that consumers would come to recognize that something that is dot Orange is genuine and that there is no risk of phishing or any other malicious acts underneath it, then that would be the ideal position that we are all aiming to get to. The question is, how long does it take you to get there.

In the meantime, I think that defensive registrations, which we’re all used to doing, is going to be an ongoing factor….

So on a longer-term view, yes, it — there is a lot of potential value. And from a marketing perspective, there’s a lot of potential value. But it will take a long time, I think, to educate internally and externally as to how to get there.

The intellectual property people fought hard for their position and achieved enormous gains, and now there is a sense that they should take their winnings quietly, which they seem to be doing. There are now several RPMs (rights protection mechanisms) in the Applicant Guidebook, including measures to shut down entire registries if they were found to be knowingly and systematically violating IP rights. The GAC (Government Advisory Committee) is no longer worrying that the sky will fall without more IP protections, and the Board opines quite openly that they see consensus in this area. Strident denunciations will continue, but at the meeting there was overwhelming agreement that we are finally past this hurdle.

Vertical Integration – Good News

The good news — and it is good news — is that the Vertical Integration Policy Development Process (VI PDP) is not going to delay new gTLDs. That doesn’t mean the results won’t affect new gTLDs, but it’s not going to slow things down.

Vertical Integration is another way of saying cross-ownership or control, and in this case the question is whether (and to what extent) a registry can own or control a registrar, or vice-versa. The Working Group (which I participate in) has a wide variety of entrenched positions, ranging from protectionist limitations on cross-ownership to a registrar-pleasing complete lack of barriers. The arguments are arcane, and because the limitations concern a future marketplace that no-one can really grasp, the proceedings are an anxious pandemonium of fears and doubts. But the Board has insisted on getting some kind of report in time for its retreat, and so the Working Group is likely to produce a very thin document that representing whatever consensus the group can achieve. The Board doesn’t want to decide this question on its own, but if it must, it will.

You can access the Working Group’s online resource page, or for a long slog you can read the Working Group’s email archives. A few weeks ago, I took the trouble to articulate the Minds + Machines position, which remains the same.

MOPO – Theoretical Knot with a Real-World Solution

MOPO, also called MAPO, stands for “Morality and Public Order,” which is the last big sticking point. Most did not consider it that big of an issue until this Brussels meeting, when the GAC first declared that ICANN’s whole approach to ferreting out immorality (having jurists decide if a TLD is immoral) was not acceptable and must be changed. They subsequently declared it was not their job to suggest anything in its place. Predictably, ICANN board members and staffers were annoyed, but must realize that ultimately they have to produce something that the GAC can live with. Watching the meetings, I didn’t sense that the GAC was using this as an issue to slow down new gTLDs; on the contrary, they seemed not to want to be seen as the reason for delay.

On the one hand, the GAC is right: the morality and public order module is a mess, bulked up with portentous phrases but basically passing the buck to some highly paid lawyers. On the other hand, the module fails precisely because it’s impossible to determine what’s immoral or not on a global basis — this is a circle that will not be squared. The debate is reminiscent of the struggles of the U.S. courts to define pornography, and the solution that was reached — local community standards — will serve here too.

A practical fix is needed, even if it doesn’t address the underlying (insoluble) problem. My guess is that, despite its overtones of censorship, ICANN will have to set up some kind of morality panel in judgment of names, and people it with diverse enough stakeholders to deflect claims of conspiracy. And the vast majority of TLDs will pass without a whisper of dissent. This panel will be just another objection chokepoint, joining the Independent Objector, the Geographic Names Panel, Community Objection and other procedures as a gateway that gTLD applications will have to pass through. Meanwhile, out in the real world, local jurisdictions may block some gTLDs locally if they find them offensive — just as they now block certain second-level domain names in .com.

Although MOPO is the most concerning of the remaining obstacles to opening the new gTLD process, and does have a chance of slowing down the process, there are a lot of committed people working on a solution. The real difficulty will be to shoehorn the practical solution into a theoretical framework that’s consistent with the principles everyone is keen to display.

The Bottom Line

The final shape of the applicant guidebook is becoming clear. With the possible exception of the MOPO issue, solutions to the remaining problems are visible in outline and in many cases in great detail. There are several efforts underway, including the Board retreat and various hurry-up working groups, to get the new gTLD program to the finish line. There’s always a chance that the timing will slip, but I would say not by much — we’re sticking to our timeline: most indications are that ICANN’s next meeting, in early December 2010 in Cartagena, Colombia, will finally produce a starting date for new gTLDs.

I’m guessing that few people have bothered to read the gTLD Registry Transition Processes document, which came out earlier this week, along with the Draft Applicant Guidebook (DAG) Version 4. Its name promises a very boring recitation of things to do when a registry needs to make a transition, which is of interest to no-one just yet because ICANN hasn’t even started the process to create any of the new registries that might one day be transitioned.

And yet there are in it some eye-opening clues about how ICANN is going to try to regulate the new gTLDs.

The document opens with a portentous recounting of ICANN’s core values, specifically “Core Value #1,” which is “preserving and enhancing the operational stability, reliability, security, and global interoperability of the Internet.” The idea is that if a registry changes hands, the transition must be undertaken in a way that Core Value #1 is preserved.

So far so good. But once we move past this catechism, we find that the document is just as concerned with preserving and extending the political levers that have been gradually inserted into the DAG over the last year. We find that “transition” means not just changing ownership, or wholesale replacement of the back-end registry, but also very minor things like name changes or small parts of outsourced technical services, and that any changes might need approval of third parties, including governments. It introduces dangerous consequences for any breach (even minor) of the Registry Agreement, including an entire re-evaluation of the registry similar to the initial application process. New “Emergency Operators” will be contracted to take over a registry in the case where ICANN determines that there’s a problem. And all of this will mean new fees and new bureaucracy.

Here is ICANN’s matrix for the kind of evaluation will be required.

In more detail, this is what registries of new gTLDs can look forward to:

Name Change

If the registry wants to change its name, it will be re-evaluated to “ensur[e] it is legitimate to guarantee there is no opportunity for hijacking the TLD.” The language is symptomatic of ICANN’s attitude to applicants, which is to treat them as potential scoundrels. This is in marked contrast to its attitude toward some government players, who are actual, verifiable, proven scoundrels (see “IDN ccTLDs for corrupt states, fast-track process for”). I am not sure what “hijacking the TLD” might mean, and the document does not explain. Suffice it to say that changing your name from “123 Inc.” to “1234 Inc.” will bring ICANN’s suspecting scrutiny upon you.

Sale of Registry

Selling your registry will now be more like selling your co-op in New York City. It’s not enough to find a buyer; you have to convince the Board of the buyer’s worthiness. The Board will put the buyer through the same wringer that you went through as an original applicant, with the same level of fees, and they can turn down the buyer for any number of reasons. There will be an evaluation of fitness from a technical, financial, and “due diligence” perspective. This last category is not defined but presumably refers to the new extensive background check. There is as yet no objection process for governments or the IP lobby to air their fears, but I would be surprised to not see this coming in further iterations of this document. One effect of this policy will be to make a sale to an existing player much easier than to a new entrant, thus concentrating commercial power and discouraging competition.

Fees

Each new owner (even if it’s the same one, with a new name) will have to go through some evaluation process. Every 3rd-party evaluator has to be paid. ICANN does not specify the dollar amounts, but I wouldn’t look for a bargain here. A full-on evaluation could easily run into the hundreds of thousands of dollars.

Geographical TLDs

In a sale (or even, apparently, for a simple name change) the new owner will have to gather the same governmental support or non-objection letters that the original applicant did. Effectively, the relevant government(s) will have veto power. In addition, despite language that creates a presumption of renewal of registry contracts at the end of the contract term, governments are now given the power to withdraw their support of the current registry in favor of another. Normally I would congratulate government officials on their sudden access to season tickets, expensive lunches, and access to no-show jobs should they ever leave the employ of the people, but in fact the model that ICANN supposes is unlikely to exist: I believe that in just about every case it will be the government who holds the delegation to geographical TLDs, and they will hire out the technical functions, preserving their power to do whatever they want, whenever they want.

Community TLDs

Running the registry for a community TLD just got much worse. ICANN’s new rules insert the nebulous concept of “community” directly into the operational life of the registry, instead of just the policy aspects. So, if you are the registry for a community TLD and want to change your name or move to a new back-end provider, your community must be “consulted.” No mechanism is specified about how to consult a community, so chaos is invited. I wonder what consulting the community of Harley Davidson enthusiasts looks like…

Registries in Breach of Contract

A registry may find that ICANN decides that it is in breach of its registry agreement with ICANN. This breach could be because of non-payment of fees, excessive downtime of the WhoIs server, or whatever. If it is uncured, a re-evaluation will follow before the registry is allowed to resume operations. The re-evaluation may include recertification by a government, approval by a relevant community, and other “due diligence” items. It’s just like applying for the first time.

Emergency Back-End Registry Operators

Here is a new beast, the Emergency Operator. Aspirants for this position will fill out an RFP and if they are chosen will be paid to be on stand-by until there’s an emergency, at which point they will be paid to be emergency responders, which ICANN “expects” will be on a cost-recovery basis. They are for the case where a registry can’t perform its functions properly. It’s a good idea in theory, but I wonder what exactly a third party can do in an emergency. A registry has two essential functions: the register (the list of names and associated data) and the resolution (DNS). There are other functions such as a WhoIs server. In this era of hyper-redundant anycast DNS I don’t see resolution being much of an issue. As to the register function, if it’s screwed up, it’s likely to be because of bad processes and bad record keeping, which lead to bad data, and this is not really fixable in an emergency; the whole thing needs to be checked and rebuilt. These new Emergency Operators will have to enter into contracts (“lightweight contracts,” ICANN suggests) with the registrars of the existing registries for which they are backups, creating a whole new layer of bureaucracy. I understand the idea, but wonder if the cure might be worse than the disease.

Summary

The Registry Transition Processes document is a clue to what it’s going to be like to run (or sell) a registry under the new ICANN regulatory regime. For the first time there is a semi-official recognition of the back-end registry operator; there are new colo-rectal exams whenever there is acquisition or other change in corporate structure; there are new fees; and there is an expanded role for governments, whose mission-creep is seen in all areas of ICANN these days.

One effect of this new regime will be to create heavy incentives for registries to stick with whatever back-end registry provider they happen to have. It’s not quite lock-in, but it’s close, because choosing a new one will carry significant costs and risks. The big winners here are the providers of back-end registry services.

If you’re thinking of applying for a new gTLD, you should familiarize yourself with the full document, and comment on it, because it’s going to be important for the life of your registry after delegation.

Today ICANN released it’s latest version its Draft Applicant Guidebook (DAG) for new generic top-level domains. It’s been 9 months coming; DAG3 appeared in the fall of last year. Compared to DAG3, there are only minor changes (see the redlined version of the document). Overall we are satisfied with the new DAG, as we were with the previous version, which came out nine months ago.

There are few substantial changes from the previous version, which is good news. It suggests that we are almost at the end of this process, and provides an indication that this will be the final DAG before the Final Applicant Guidebook.

The major changes (which really aren’t that major) are as follows:

• An expanded role for public comment (Section 1.1.2.5), which is a wide-open back door for objections to applications which pass all of ICANN’s objective criteria, but are still not liked by the various powerful interests that have held up this process for so long. In this way ICANN can claim to have an objective process while leaving an avenue open for meddling in case something “objectionable” gets through. It’s not a stretch to presume that the .XXX fiasco was on the minds of ICANN as this was drafted.
• Cross-ownership of registry and registrar (Section 1.2.1). This version of the DAG has strict separation between registrar and registry, but with a footnote saying this is open to change if the “community” comes up with a better solution. The “community” now discussing this is the Vertical Integration Working Group, which consists almost wholly of registrars and registries aiming competing proposals at each other. The proposals vary in their details but are uniform in giving short shrift to idea that might help the consumer, but very thorough when it comes to advocating what might help the proposer. It is likely that in the final applicant guidebook we will see some limited cross-ownership possibilities, fine-tuned to please incumbent players.
• $5000 of the $185,000 fee is now due when registering to apply (Section 1.5.1). Applicants will create a new registration for each TLD they plan to apply for, and will have to pay $5000 for the privilege. The remaining $180,000 is due with the application itself.
• An expanded background check for applicants (Section 2.1). As well as the usual things that can disqualify a person or entity from running a piece of public infrastructure (corruption, bribery, terrorism), ICANN has added another great evil of our times, “intellectual property violations.” If for some reason you don’t think that intellectual property violations rank with terrorism in the pantheon of Bad Things, please have a chat with ICANN’s Intellectual Property Constituency, who will set you straight. For extra credit, ask them who was behind this amendment and watch for expressions of astonished innocence.
• Some small changes to the treatment of geographical names (Section 2.2.1.4.2). The DAG is now explicit that if you want to do apply for a gTLD for the capital of a country (e.g., .cairo) you will have to get the permission of the national government.
• Use of zone files (Section 2.2.3.3). If you want to do a TLD that makes innovative use of the DNS (as .TEL did), you will now have to ask for special permission from ICANN, who will check to make sure that your plan won’t harm the stability of the DNS system.
• Incorporation of IRT recommendations (e.g., Section 5.4.1). Parts of the recommendations of the Implementation Recommendation Team (IRT) have been incorporated into the DAG, including the Uniform Rapid Suspension requirement.

Overall, this version of the Draft Applicant Guidebook differs from the previous version by adding some incremental changes and extra back doors for fidgety governments and the IP interests who lobby them. None of the changes are unexpected or especially egregious. We are satisfied with the new document, and hope and expect that ICANN will move expeditiously to issue a final guidebook with application dates and final rules.

The following is a quantitative analysis of the ICANN public comment for the New gTLD Program – Draft Expressions of Interest/Pre-Registrations Model. The full text of comments can be found on ICANN’s site.

We have also prepared a PDF version of our analysis, which includes a full list of all comments and a brief description of each comment.

I. Overall Findings

The ICANN public comment for the New gTLD Program – Draft Expressions of Interest/Pre-Registrations Model closed on February 7, 2010. A total of 274 separate comments were received (several commenters made multiple comments). 183 comments (67 percent) supported EOIs, and a majority of those favored the Draft Model. 76 comments (28 percent) were opposed to EOIs. 15 comments (5 percent) were neither for nor against the Draft Model.

II. EOI Supporters

EOI supporters break down into two major categories (number of comments in parentheses). A full list of commenters, with a brief description of their comments, can be found in the attached PDF.

• Companies and Groups in Favor of EOIs (86)
• Individuals (97)

Commenters in favor of EOIs can be further divided into the following categories:

1. Prospective Applicants for new gTLDs
2. Individuals connected to prospective applicants
3. The ICANN At-Large Advisory Committee
4. The ICANN ISP Constituency
5. The ICANN GNSO
6. Independent small and medium-sized businesses
7. Independent individuals
8. Independent not-for-profit membership organizations
9. Independent not-for-profit charities
10. Existing gTLD registries
11. Existing ccTLD registries
12. ICANN-accredited gTLD registrars
13. Law firms

III. Arguments Made for EOIs

Comments of the respondents in favor of EOIs were for the most part in full agreement with the staff proposal. Some, however, had additional thoughts or reservations:

• Timetable – the delay in the introduction of gTLDs hurts legitimate applicants who relied on ICANN’s announced timetables.
• Begin the process – The gTLD process needs to get started, EOIs are a welcome first step.
• Predictability – EOIs are welcome because they will help set a predictable timetable for the introduction of new gTLDs.
• Participation – Prospective applicants are an important for making policy for new gTLDs, they have should have some official representation at ICANN.
• Anti-Trademark – trademark interests have been given too much already, should not be allowed to derail the process.
• Anti-Monopoly – vested interests have too much power; ICANN should introduce competition.
• Security – new gTLDs are an opportunity to make the Internet more secure.
• Contention – EOIs will allow contending parties to make arrangements between themselves to prevent auctions.
• “Slot” Trading – ICANN should take care about EOI “slots” becoming a speculative marketplace.
• Mandatory – Several supporters of EOIs believed they should not be mandatory.
• Confidentiality – Several supporters were concerned that too much information was being collected in the EOI; others thought not enough was being asked.
• Price – the proposed filing fee for EOIs was seen by some as appropriately high, others as too expensive.

IV. Minds + Machines Comment Form

Minds + Machines put together an online form that outlined the rather complicated arguments for and against EOIs as a way to encourage comments from those for whom the prospect of writing out an extended argument might be daunting. We further encouraged commenters both for and against EOIs to use the comment form. Most commenters using this form, but by no means all, sent in comments favorable to EOIs.

V. EOI Opponents

The large majority of commenters opposing the Draft Model represented the concerns of trademark holders: trademark associations or groups (23); trademark attorneys (21); or the legal departments of companies (15) account for more than 80 percent of those in opposition of the Draft Model. A full list of the comments, along with a brief description of each, can be found in the attached PDF.

• Trademark Groups Opposed to EOIs (23)
• Individual Companies Opposed to EOIs (15)
• Individuals Opposed to EOIs (17)
• INTA members (21)

The commenters against EOIs can be further divided into the following categories:

1. Large brand owners
2. Registrars providing domain name services to brand owners
3. Trademark and intellectual property associations
4. ICANN’s Intellectual Property Constituency
5. Large charitable not-for-profits
6. Members of the International Trademark Association (see Section VI below for further explanation).
7. Sports organizations
8. Independent individuals
9. Eric Brunner-Williams

VI. Arguments made against EOIs

The following are the primary concerns found in the comments opposed to EOIs:

• Resolution of overarching issues – The “overarching issues” need to be resolved before any EOIs.
• DAG – The Final DAG needs to be published before an EOI.
• Speculation – EOIs will promote speculative behavior including “slot” trading.
• Time – The process is moving too quickly for proper response and consideration.
• Price – $55,000 is too much for nonprofits, developing countries and for others who cannot afford it.
• No gTLDs – Any new gTLDs are a bad idea.

VII. INTA Submissions

On January 12, INTA, the International Trademark Association (INTA) sent out an anti-EOI message to its membership (full text below), exhorting them to comment, suggesting that merely registering their opinion would be sufficient as a comment. Therefore we have included them as a separate category.

Dear INTA Members,

The following notice is to bring to your attention two Internet domain name
system developments that warrant your consideration and potential action.

1. ICANN is Soliciting Input: Should it Proceed with Pre-Registrations for
New gTLDs?

The Internet Corporation for Assigned Names and Numbers (ICANN) is seeking
community views, including input from trademark owners and their
representatives, on whether it should begin accepting “pre-registrations” for
new generic Top Level Domains (gTLDs). Please click here for the ICANN
announcement.

INTA’s Internet Committee will submit comments opposing pre-registration, but
it is important that ICANN also hear from trademark owners directly.

This letter was followed by comments from INTA members that were brief and did not include a reason for opposing EOIs. A typical example follows:

To: draft-eoi-model@xxxxxxxxx
Subject: Pre-registrations for new gTLDs
From: “Lisbet Andersen” lan@xxxxxxxxxxxxx
Date: Tue, 12 Jan 2010 10:48:57 +0100

As an INTA member I have been encouraged to give my opinion on the pre-registration issue. This is to inform you that I do not support ICANN accepting pre-registrations for new gTLDs.

Kind regards
Lisbet Andersen

VIII. Conclusion

The majority of the comments in favor of the Draft Model supported all of the proposed points in the Draft Model, with some concerns about price and whether EOIs should be mandatory. Strongly, they urged ICANN to move forward expeditiously and to provide a clear and predictable timeline.

The comments against the Draft Model were for the most part opposed to EOIs and new gTLDs in general. The comments from the 21 INTA members were very short comments opposing EOIs. Some of the arguments by large brand holders were longer and did not comment on the staff proposal so much as offer their concerns about EOIs and new gTLDs. The primary concern among companies providing an explanation for their opposition was the resolution of the “overarching issues.” Security was the second greatest concern.

Comments or Corrections

We may well have made an inadvertent error in our analysis. Please send corrections or comments by leaving a comment here or by sending an email to minds@mindsandmachines.com.

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.

Our partnership with EPAG Domainservices, a leading German registrar, is bearing fruit. Our non-exclusive arrangement with EPAG, where we supply registry software and ICANN expertise, while EPAG supplies local-language sales and support, is a great model, especially with a company of the EPAG’s high caliber.

Together, we participated in the 4-city roadshow across Germany designed to acquaint German businesses with the new TLDs. The interest in new TLDs was strong and persistent, and I now believe that a substantial number of German brand holders will be applying for a new top-level domain — either their own brand, and/or a generic word that describes their industry.

Here’s today’s press release in full:

EPAG and Minds + Machines See Strong Interest in .BRAND TLDs

EPAG Domainservices GmbH and Minds + Machines LLC saw a surge of interest in .BRAND top-level domains (TLDs) from German companies during a recently-concluded four-city exposition. Strong attendance and vigorous engagement by companies demonstrated vivid interest from businesses in applying for their brands as top-level domains.

The exposition, “.BRAND – BUT HOW?” was organized by eco e.V. and Markenverband e.V. to supply information to businesses about new TLDs. EPAG and Minds + Machines were major sponsors and welcomed 250 major brandholders to events in Cologne, Frankfurt, Munich and Berlin.

Businesses showed strong interest in using new TLDs to benefit their brands.

Executives in marketing, trademark and IT told EPAG that many companies are preparing to apply for new TLDs, and understand the substantial value of this global digital asset.

Alexander Schwertner, Managing Director of EPAG, noted the enthusiastic response to the joint service offering of Minds + Machines and EPAG: “This roadshow has proven the market demand for new TLDs from businesses in Germany, underlining the need for ICANN to finalize the application procedure as soon as possible.” “We are delighted with our partnership with EPAG in Germany, and gratified that our registry technology and application preparation services are getting substantial traction in the German market,” said Antony Van Couvering, CEO of Minds + Machines.

In upcoming weeks, EPAG and Minds + Machines will run workshops throughout Germany for companies considering TLDs — including information on how to prepare their ICANN application.

Minds + Machines works internationally with companies, cities, not-for-profits and entrepreneurs to secure and operate new top-level domains (TLDs). Minds + Machines provides the comprehensive application preparation services necessary to acquire a new TLD, as well as a robust, scalable registry hardware and software platform used by over 20 TLDs worldwide today. Minds + Machines is known for its customer-friendly approach that is specifically designed to make the process of acquiring and operating new TLDs more accessible, more reliable and less expensive.

EPAG has been an ICANN-accredited domain registrar since 2000 and specializes in managing domains for resellers, large companies and SMEs. EPAG’s team of experts offers a wide variety of services ranging from fully automated domain registration to personal support in the registration of country code domains.

ICANN has just posted an update on their website that applications for new TLDs will start being accepted in the First Quarter of 2010, with June’s meeting in Sydney being used to discuss and collect final issues for the third version of the Draft Application Guidebook.

The Sydney meeting should be quite interesting and lively as a result.

From the ICANN announcement:

ICANN continues to move forward in the implementation of the new gTLD Program while balancing and addressing community concerns on specific aspects of the program. The public comment period on the second version of the applicant guidebook recently closed and work continues to proceed regarding the discussion of overarching issues.

In order to continue progress and the community discussion, ICANN will:

• Publish an analysis of comments similar to that published after the fist version of the Guidebook
• Conduct consultations and fora at the Sydney meeting and afterward to develop solutions to the overarching issues
• Publish the third version of the Guidebook after the Sydney meeting when solutions to the overarching issues can be included

With that in mind, it is anticipated that applications for new top-level domains will be accepted starting in the first quarter of 2010.

Guidebook Analysis

As with the first version of the Guidebook, ICANN will organize and report a synopsis of all the comment made in the ICANN comment forum as well as at the ICANN meeting in Mexico City. The report will analyse comment by category and balance different proposals made. The goals of the report are to:

• analyse the comment in order to develop amendments to the Guidebook that are consonant with the meaningful input of the community, and
• demonstrate that the comment is taken seriously and carefully considered.

ICANN will not be producing a third version of the Applicant Guidebook for new generic top-level domains before its upcoming June meeting in Sydney, Australia. This is because the discussion of overarching issues will continue through the meeting and beyond (as was expected). Publication of a new Guidebook version without addressing these issues might signal that they are not considered important.

In order to provide specifics and point up discussion, the Comment Analysis will be accompanied by several excerpted redlined sections of the Guidebook so that potential changes can be discussed. These excerpted sections are being developed in response to the recently closed public comment forum and will be published in time for discussion in the Sydney meeting.

After over a decade of effort, we’re pleased to see that momentum is not lost for this very important process.

-Jothan

What’s ICANN without acronyms? Here’s a new one: IRT. That’s not Interborough Rapid Transit, the subway on the west side of Manhattan, it’s the Implementation Recommendation Team. Their job is to come up with a plan to address the concerns of trademark holders in connection with the introduction of new TLDs.

What’s brilliant about this move is that the team is comprised of people who suggested solutions to the trademark quandary during the public comments to the last version of the guidebook. Those who simply said “hurrah” or “harumph” will not be asked for any more of their opinions.

Nicely played, ICANN.

Mexico City, Mexico… March 7, 2009: ICANN’s 34th International public meeting in Mexico City has drawn to a close after the organization’s Board of Directors approved the establishment by staff of an Implementation Recommendation Team (IRT) comprised of an internationally diverse group of people to develop and propose solutions to the over-arching issue of trademark protection in connection with the introduction of new generic top level domain names (gTLDs).

“The Board has clearly heard and believes strongly that the concerns of trademark holders must be addressed before this process is opened for applications,” said Peter Dengate Thrush, Chairman of the Board of Directors of ICANN. “The establishment of this team, is an attempt to get proposed solutions from the people with skill in trademark protection and other issues.”

The IRT will be comprised of people who put forward solutions in the first public comment period on the new GTLD Applicant Guidebook. The IRT has been asked to draft a report by 24 April for comment and to produce a final report no later than 24 May so it can be considered at ICANN’s Sydney meeting in June.