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ICANN : Towards Domain Name Administration in the public interest

As requested by Representative Pickering,

April 6, 2001
Response by Leah Gallegos
to:

Testimony of
Jerry Berman, Executive Director
Alan B. Davidson, Associate Director

Center for Democracy and Technology

http://www.cdt.org

Before the
House Committee on Energy and Commerce
Subcommittee on Telecommunications
February 8, 2000

"ICANN's New gTLD Decisions:

Towards Domain Name Management in the Public Interest"

Dear Representative Pickering:

Thank you for inviting me to respond to the Center for Democracy and Technology testimony of February 8, 2001.

In order to respond in an organized manner, I have decided to follow the actual written testimony on a section by section basis. My comments will be enclosed in brackets [ ] and italicized. For the most part, Mr. Davidson and I agree. There are, however, some areas in which I would like to elaborate and some where we disagree.

Summary

The Internet's great promise to promote speech, commerce, and civic discourse relies largely on its open, decentralized nature. Within this architecture, the centralized administration of the Internet Corporation for Assigned Names and Numbers (ICANN) is a double-edged sword that presents both the possibility of bottom-up Internet self-governance and the threat of unchecked policy-making by a powerful new central authority. ICANN's recent move to create new global Top Level Domains (gTLDs) is a welcome step towards openness and competition. But the process ICANN used to select those gTLDs was flawed and demonstrates the need for ICANN to take steps to ensure greater transparency, representation, and legitimacy.

The Center for Democracy and Technology (CDT) welcomes this opportunity to testify before the Subcommittee on this issue of importance to both competition and free expression online. CDT is a non-profit, public interest organization dedicated to promoting civil liberties and democratic values on the Internet. We have participated in ICANN as advocates for open and representative governance mechanisms that protect basic human rights, the interests of Internet users, and the public voice.

We wish to make four main points in our testimony:

· ICANN's decisions, and particularly its selection of new gTLDs, raise issues of broad public concern - While ICANN purports to be a purely technical coordination body, it has the potential to exert a great deal of control over the Internet, and many of its "technical" decisions have broader policy implications. The selection of new gTLDs - particularly in the manner exercised by ICANN - impacts free expression and the competitive landscape of the Internet. ICANN is not equipped to make policy decisions, and does not even apparently want to. But the gTLD selection process suggests that ICANN could be engaged in broader policy-based decisions than its mission or mandate should allow.

· The ICANN Board and governance structure that made the gTLD selection is not appropriately representative of the public voice - A starting point for evaluating the gTLD decision is asking: Is the group that made this decision appropriately structured and representative? The Directors that made the gTLD selection did not include any of the elected members of ICANN's Board, and there is an ongoing controversy within ICANN about the appropriate structure and selection of the Board. Despite efforts to make ICANN inclusive, non-commercial interests continue to be underrepresented in its deliberations - casting doubt on the legitimacy of the gTLD decision.

· ICANN's process for selecting new gTLDs was flawed. - A $50,000 non-refundable application fee and stringent criteria created a high barrier for non-commercial applicants and skewed the applicant pool towards large organizations. The "testbed" concept for creating a small number of initial domains, while not without its merits, also led to the uneven application of vague criteria in order to reduce the number of applicants from those who passed more objective criteria. ICANN has produced little support for its final decisions - decisions that appeared arbitrary. The appeals process is unsatisfying and post-selection transparency of the important final contract negotiations is minimal.

· Nevertheless, on balance a rollback of the gTLD decision is not in the consumer interest. ICANN should reform its selection process and governance model, and Congress and the Commerce Department should exercise oversight in this reform. - While the selection process was flawed, new gTLDs are needed. CDT believes that on balance the consumer interest in rapid deployment of new gTLDs, and the violence done to the global interest in ICANN by U.S. intervention, are not outweighed by the benefit of the Commerce Department's reconsidering the entire gTLD decision. Rather, Commerce and the U.S. Congress should insist on a more objective process for gTLD selection moving forward, and on reform of ICANN's structure and mission moving forward to make it appropriately representative.

ICANN's founding documents held out the vision of a new form of international, non-governmental, bottom-up, consensus-driven, self-organizing structure for key Internet functions. The promise of that vision was to promote openness, good governance, and competition on a global network. Today, that promise is threatened. As the gTLD selection process demonstrates, serious reform is needed to limit the injection of policy-making into ICANN's technical coordination functions, reassert the bottom-up consensus nature of ICANN's deliberations, and ensure that the public voice is appropriately represented in ICANN's decisions.

The Center for Democracy and Technology is a 501(c)(3) non-profit, public interest organization dedicated to promoting civil liberties and democratic values on the Internet. Our core goals include ensuring that principles of fundamental human rights and the U.S. Constitution's protections extend to the Internet and other new media. CDT co-authored ICANN's Global Elections: On the Internet, For the Internet, a March 2000 study of ICANN's elections. CDT also serves in the secretariat for the "NGO and Academic ICANN Study" (NAIS), a collaboration of international researchers and advocates studying ICANN's governance and At-Large Membership structure.

1. ICANN's decisions, and particularly its selection of new gTLDs, raise issues of broad public concern.

Should the public and policymakers care about ICANN and its new gTLD decisions? The answer today is yes.

There are two competing visions of ICANN. In one, ICANN is a new world government for the Net - using its control over central domain name and IP address functions as a way to make policy for the Internet globally. In the second, ICANN is a purely technical body, making boring decisions on straightforward technical issues of minimal day-to-day interest to the public - like a corporate board or a technical standards group.

In reality, ICANN is somewhere in between and is likely to require public attention for at least some time to come. There are at least two important reasons why ICANN is of public concern:

· ICANN's has the potential for broad policy-making - On the decentralized global Internet there are few gatekeepers and a great deal of openness - features that have contributed to expression, competition, and innovation online. In this decentralized world ICANN oversees a crucial centralized function - the coordination of unique names and addresses. In this role, ICANN has the potential to exercise a great deal of control over Internet activities. For example, ICANN has already required that all domain registrars impose a uniform policy for resolving trademark disputes. Without a check on its authority, ICANN could seek to impose other requirements or even content regulations. While the current ICANN Board has shown an admirable lack of interest in such policy-making, a more powerful future ICANN might not be so restrained, particularly without any checks on its authority.

[The UDRP is horribly flawed .

1. There is no avenue for non-trademark holders to file a complaint. It is designed strictly for the Trademark Lobby and large multi-national corporations to obtain domain names they did not have the foresight to register when they had the opportunity to do so. Further, it allows these interests to restrain fair use of domain names.

2. Free speech has been curtailed as a result of the UDRP and the courts have now begun to use these flawed decisions to deny it. While it has been determined that names like <anynamesucks.com> do not constitute free speech in some cases, others have ruled that it does. There is inconsistency and bias throughout. Does a name infer free speech or does it not?

3. What is a bad faith registration? If Irving B. Matthews, CPA registers ibm.com or ibm.biz, does that mean a bad faith registration? It seems so in many decisions involving acronyms and other names. Who has the rights to Ford, Acme, Amex, clue, Barcelona and a host of others? Does a trademark holder "own" words? Does anyone own language? Is it proper to allow a claim to words such as "easy" in any form and to deny their use to others? This is currently one such claim. Another is a claim to "my" - any use of the word!

4. There is no appeals process, yet the complainant may supplement comments for a fee with one arbitration forum. The respondent may not. Either side may go to court, of course, but in most cases, the respondent does not have the resources to do so, and the complainant knows this. Many respondents simply give up, especially individuals. There is nothing to prevent a loop. A respondent went to court and won. The complainant then filed a UDRP claim. The UDRP does not have to honor a court judgment and ICANN accepted the claim. In case of a UDRP loss, the complainant could go back to court, and so on. There is nothing to stop the cycle, so a trademark holder with deep pockets could easily bully a respondent into giving up a legitimately held domain.

5. Forum shopping is standard. WIPO has most applications because of its obvious bias. In my opinion, WIPO should not be a provider at all, given its mission as advocate for the IP industry.

6. Respondents have no choice in which arbitration provider is used. In order to have any voice at all, he must choose a three member panel and pay for it. For most respondents, this is prohibitive. We must consider that most complaints are filed by established businesses against individuals or very small businesses. Many complaints are simply intimidation and theft by fiat, since they know the respondents many times simply cannot afford representation or the three member panel choice.

There are many other areas of the UDRP that cry for reform. I am one of a great many who feel it needs total reform and that WIPO should be only an advisor for one interest group. There must be advisors from all stakeholders.

It seems that the large commercial interests have little or no understanding of the DNS, or do not wish to recognize its hierarchal structure. Since there can be only one unique character string (name) at each level, trademarks do not fit the model at all. A domain name is just a locator for a numerical address.

One solution may be to absolve trademark holders from the responsibility of policing their marks within the domain name system. Without that requirement, there would be no need for such a dispute resolution process. In addition, the ACPA language is so over broad, that it invites abuse - abuse that is already apparent.

The term "cybersquatter" was meant to refer to those who would deliberately register a known trademark and then attempt to extort the trademark holder for large sums of money or sell it to a known competitor to direct customers away from it. Instead, it has been used to refer to domain name holders who have not used a name at all for the web or who wish to enter the secondary market - a perfectly legal activity. While it has been determined that free speech does not apply to a domain name in itself, the ACPA and UDRP allow a determination that one is a cybersquatter for registering a domain name. There is a great disparity here. Remember, a domain name is a locator, even though it uses what appears to be common language.

I feel that the ACPA language requires change to a narrowly defined criteria and definition of "cybersquatter."

The Lanham Act was written to protect consumers and has now been perverted to protect trademark holders against both small business and consumers. It is resulting in restrained trade and free speech.]

· Even ICANN's narrow technical decisions have broader policy impacts - "Technical" decisions often have broader impact. Expanding the gTLD space, choosing which registry is recognized for a country code, or even selecting a method for recognizing when new country-code domains get assigned (as .ps was recently assigned to Palestine), for example, all have broader political and social implications.

[The ccTLDs are not at all happy with proposed actions by ICANN. Tri-lateral contracts, involving governments in contracts where delegations belong to individuals or corporations within a country, forcing gTLD status on a ccTLD... These are areas where ICANN imposes broad policy and it should not.

ccTLDs are and should be autonomous. In my opinion, I do not see why any of them should be forced into contracts at all. ICANN provides little or no services to them and there is little or no cost involved to maintain an entry in the rootzone. ICANN could, if necessary charge a nominal fee for making contact or nameserver changes, but this fee should be no more than a nominal administrative charge of five or ten dollars. If it is automated, there should be no fee at all. It is in the public interest to have a "whois" database for TLDs, but even this is a minimal cost.

ICANN should not be engaged in policy making for any TLDs beyond those held by the DoC. Aside from basic technical requirements that ensure viability of a TLD (nameservers), ICANN should stand aside. Business models, dispute policies, payment policies, restrictions, charters should not be within their purview These are business decisions or decisions within the realm of national sovereignty.]

The Consumer and Free Expression Interest in New gTLDs

Today, access to the domain name system is access to the Internet. Domain names are the signposts in cyberspace that help make content available and visible on the Internet. (For further explanation, see CDT's overview Your Place in Cyberspace: A Guide to the Domain Name System.) The domain name system may ultimately be replaced by other methods of locating content online. But for the time being, a useful and compelling domain name is seen by many as an essential prerequisite to having content widely published and viewed online.

There is an increasing consumer interest in creating new gTLDs. The current gTLD name spaces, and the .com space in particular, are highly congested. The most desirable names are auctioned off in secondary markets for large sums of money. It is increasingly difficult to find descriptive and meaningful new names. Moreover, the lack of differentiation in gTLDs creates trademark and intellectual property problems: there is no easy way for United AirLines and United Van Lines to both own united.com.

[Congestion has occurred due to the delay of introduction of TLDs to the USG root. It has created a perceived shortage of names and fostered speculation. If existing TLDs had been entered into the root years ago, the situation would have been very different today. While further delay will exacerbate the problem, imprudent decision now will have serious negative impact later.]

ICANN's decisions about new gTLDs can have other implications for free expression. If, in choosing among otherwise equal proposals, ICANN were to create a new gTLD .democrats but refuse to create .gop, or added .catholic but refused to add .islam, it would be making content-based choices that could have a broad impact on what speech is favored online.

[There is no reason to refuse to enter a TLD into the root.. All candidates with demonstrable technical capabilities should have been included, and should be included in the future.]

In addition, CDT has some concern that the creation of "restricted" domains that require registrants to meet certain criteria - such as .edu or the new .museum - risks creating a class of gatekeepers who control access to the name space. Today, access to open gTLDs like .com and .org does not require any proof of a business model or professional license. This easy access to the Internet supports innovation and expression. Who should decide who is a legitimate business, union, or human rights group? CDT has called for a diversity of both open and restricted gTLDs, and will monitor the impact of restricted domains on speech.

[I disagree that there is a problem with creation of "chartered" TLDs. To the contrary, chartered or "restricted" TLDS should be desirable. It allows for consumers to search within categories and can provide an indication that they will find a bone fide organization, business, profession or individual within a specified TLD. However, for this to work well in practice there must be a multitude of TLDs available. And this is the point, is it not? ICANN/DoC have been reluctant to provide them and impose such measures that it is nearly impossible to do so for the vast majority of the world].

There is increasing evidence of an artificial scarcity in gTLDs. It is now widely acknowledged that it is technically feasible to add many new gTLDs to the root - perhaps thousands or even hundred of thousands. Limiting the number of gTLDs without objective technical criteria creates unnecessary congestion; potentially discriminates against the speech of non-commercial publishers or small businesses who cannot compete for the most desirable spaces; and places ICANN in the role of gatekeeper over speech online by deciding which gTLDs to create and under what circumstances.

There are many legitimate concerns that call for a slower deployment of new gTLDs. Some have expressed concern about stability of the Internet given a lack of experience in adding many new gTLDs. Trademark holders have also raised concerns about their ability to police their marks in a multitude of new spaces.

[The fallacy of lack of experience is acutely apparent. There are TLDs such as .WEB and many others that prove it. There are also companies, such as Diebold Inc., that have been deploying "new" services successfully for many years.

Other roots have been adding TLDS frequently with no problems and DoC has added ccTLDs in droves over the last decade, and during the most explosive growth period for the Internet. If failure or success is a criteria, it should be dropped, since the market will determine that issue.

As for Trademark concerns, let us consider having 500 TLDs (they exist today) and then determine whether Trademarks have a place in the DNS. If, as I mentioned earlier, Trademark holders were absolved of having to police their marks in the DNS, the purpose of alleviating the scarcity of names would be accomplished. The trademark issue has become so over blown and powerful that it threatens to overshadow any advantage in introducing new gTLDs. What is the point if trademark holders get first choice before any other entity has a chance in every TLD? It makes no sense at all. With hundreds of TLDs, it is almost humorous. One possible solution would be to relegate Trademark holders to a .TMK or .REG for protection of their marks. However, to say they have first choice in all new gTLDs is ludicrous.]

CDT believes that these concerns support the notion of a phased "proof of concept" rollout of new gTLDs. However, we believe that the consumer interest will be best served by a rapid introduction of the first set of new TLDs - followed quickly by a larger number of domains.

[I disagree strongly that there is need for "proof of concept" since it has already been accomplished by several TLDs, including .BIZ, .WEB, .ONLINE, ccTLDs and many others. It makes much more sense to introduce as many as possible (really simple) immediately, with one caveat. There should be no duplication in THE NAME SPACE.

I have always advocated that DoC should simply include all known viable TLDs in their root, just as the other major roots include the DoC TLDs and ccTLDs in theirs. This is a common reciprocal arrangement. It provides a singular name space and enhances the stability of the Internet by providing a multiple system of networks for load balancing and avoidance of a single point of failure.

What is generally not understood is that while THE name space is absolutely singular, root systems are not. There can and will be many roots. There is no way to prevent this occurrence. It is in the best interests of the global community for ICANN/DoC to recognize the phenomenon and cooperate with it. The alternative is apparent. ICANN refuses to acknowledge the existence of pre-existing roots and TLDs and then simply duplicates them. The potential result is chaotic with much of the innovation in new systems occurring outside of the US where our national law would have no effect in any case. Cooperation, on the other hand, would tend to bring these disparate groups to the table.

This attitude and practice blatantly breaks the agreement with DoC (the ICANN-DOC MOU) and also the APA that ICANN was designed to avoid. Since the situation is not going to disappear, and will rear its head frequently, it is my considered opinion that ICANN/DoC move to cooperate with all existing entities rather than ignore them. One can choose to ignore warnings of an impending hurricane, but it will still make landfall. Once you feel the wind, it's too late to plan. In fact, once DoC introduces a collider and the registry for that collider is open to the public, the damage may be irreversible.

We still have a chance to deal with impending chaos, but time is very short. No amount of US legislation will prevent the global problem. No one country can "rule"the Internet and certainly no single corporation can do so. ICANN could go a long way to mitigate the situation, but it must bereformed and focused in task in order to accomplish the task.]

The phased "proof of concept" adopted by ICANN, however, creates a major problem:Because ICANN could add many new gTLDs, but has chosen to add just a few, it has forced itself to make policy-based and possibly arbitrary decisions among legitimate candidates.

[ICANN made decisions based on business models, financials, ethics, mnemonics, and other arbitrary criteria that should not be within its purview. In addition, it relied on the sometimes grossly erroneous reports by staff to render decisions without a thorough personal understanding by board members of each proposal. Staff ran the show.]

In this environment, it is most important that gTLDs be allocated through a process that is widely perceived as fair, that is based on objective criteria, fair application of those criteria, and open and transparent decision-making. There are many reasons to believe ICANN's first selection process for new gTLDs has been highly flawed.

3. The ICANN Board and governance structure that made the gTLD selection is not appropriately representative of the public interest.

A starting point for evaluating the gTLD decision is asking: Is the group that made this decision appropriately structured and representative? The governance of ICANN itself is an issue of ongoing debate. Despite efforts to make ICANN inclusive, there are many indications that ICANN has failed to be appropriately representative of all the interests affected by its decisions - casting doubt on the legitimacy of the gTLD decision.

ICANN organization underrepresents many interests.

Members of the Internet user community and advocates for user interests have often been under-represented in ICANN. ICANN's physical meetings, where many major decisions are made, occur all over the world, pursuing an admirable goal of global inclusiveness. However, the expenses associated with physical attendance at such meetings place it out of reach for many NGOs and public interest advocates.

CDT's own experience has been that the ICANN community is receptive to thoughtful input and advocacy, but that it requires a concerted and ongoing effort to be effective. In our case, that effort has only been possible through the support of the Markle Foundation, which early on committed to support efforts to improve the public voice in ICANN. We have received further support from the Ford Foundation as well. These grants provided CDT with the ability to attend and follow ICANN activities, which many other potentially interested organizations in the educational, civil liberties, or library communities cannot do.

ICANN's bottom-up structures offer imperfect avenues for public participation. While ICANN explicitly provides representation to a number of commercial interests, it fails to properly represent the millions of individuals that own Internet domain names or have an interest in ICANN's decisions. The main outlet for individual participation-the General Assembly of the Domain Names Supporting Organization-appears increasingly ineffective. Non-commercial organizations have a constituency, the Non-Commercial Constituency, but it is only one of seven groups making up one of the three supporting organizations.

[The General Assembly has literally no voice in ICANN policy making decisions. Recommendations made at the Melbourne meetings were ignored. In addition, the board meeting was called to order a half hour early with no visible notification to the public (I attended via webcast) and important issues were discussed prior to the public's attendance at that meeting. Furthermore, the agenda did not include discussed items and public statements had been made that no decisions would be made regarding the gTLDs. The board then proceeded to resolve that final decisions would be made without further review and contracts would be negotiated and signed as well. At 9:00 am, the Chairman announced that he was leaving early to catch a flight to

the US and he left at 10:00 am. In addition, when there was an announcement by a local barrister that legal action had been instituted against ICANN, board members laughed openly and encouraged the audience then in attendance to laugh as well. Professional, open and transparent? No.

As a typical example of ICANN's closed door procedures and exclusion of the majority of stakeholders, the ICANN/Verisign agreement was amended and approved within a twenty-four hour time frame with no allowance for input from the DNSO. As should be expected, this action has not been well-received by stakeholders. The GA, rightfully, feels disenfranchised and ,in fact, is disenfranchised. There was an inadequate time frame allowed for the entire process. Instead, negotiations were handled without public input for months and Verisign was permitted to dictate revisions to the original agreement and completely avoid the APA. The perception globally is negative. ICANN/DoC could have avoided the negativity with openness and consideration for the Internet's users. It did not.

With regard to new TLDs, if ICANN were to listen to stakeholders more, the resulting TLDs would be more likely to serve the public than those selected.

It should be noted that one of the major objections to IOD's application was that it would run both registry and registrar for a period of time. Hans Kraaijenbrink was adamant in his objection to this stating , "IOD goes against everything we ve worked on the last two years they join registrar and registry, and they have a high price."

An excerpt from a General Assembly post states:

> I still think that to be able to run (and now without time
> constraints and/or other future limitations) the Registry and the
> Registrar for the major generic TLD *is* giving to VeriSign
> unfair competitive edge. As I said, the matter may now be moot,
> but IMHO we have just witnessed the formalization of a change in
> policy by ICANN.

I do not see a problem with a registry/registrar model, especially for a start-up registry. Our initial model is one such. It is in the best interests of the registry to bring on registrars, but there should be a "breaking in" period prior to adding such models. IOD's plan was practical and prudent. It allows development cost recovery in the initial months and a phase in of participating registrars. Jumping into an shared registration system (SRS) with no beta testing is detrimental to users. The objection to IOD's price is disingenuous since it is the exact price charged by Verisign.

There was little consistency on the part of the ICANN BoD in the selection of new TLDs. There was obvious bias, Directors participated with definite conflicts of interest and did not recuse themselves until after that participation. In addition, there was not a legal quorum for the final votes. And this is in addition to the entire flawed process leading to the final selections. ]

ICANN's Board of Directors fails to adequately represent the public voice.

In the absence of other structures for representation, the main outlet for public input is the nine At-Large Directors of the Board. These nine directors are to be elected from within a broad At-Large membership, but there has been a great deal of debate about the election mechanism and even the existence of the At-Large Directors. To date only five of the nine At-Large directors have been elected (the seats were otherwise filled with appointed directors), and even those five were not seated in time for the gTLD decision in November.

CDT, along with Common Cause and the Carter Center, has strongly advocated for broadly representative and fair mechanisms to fill all nine At-Large seats as quickly as possible. Last March CDT and Common Cause prepared a study of ICANN's election system, concluding that the proposed "indirect election" would not adequately represent the public's voice. ICANN agreed to hold more democratic direct elections (held last October), but only for five of the nine At-Large Directors, to be followed by a study of the election process. CDT is currently engaged in an international research effort, the NGO and Academic ICANN Study (NAIS), examining last year's election, and in June will offer its suggestions to ICANN regarding future selection of Directors.

[ICANN has posted a notice on its website: "At large Membership" with a closed sign. There have been numerous statements and signs that there is no intention of having an "at-large" membership. One board member stated to Karl Auerbach (Melbourne BoD meeting) that board members who where there before him (Mr. Auerbach) saw no need for an at-large membership and were opposed to it. The white paper and MOU are being systematically ignored.]

In the meantime, serious questions remain about adequate public representation on the current board, and the future of the public voice in selecting the Directors who will make decisions about additional gTLDs.

[In my testimony on February 8, I stated that one major change should be the election of the board. Most have been "squatting" for over two years when they should have had an election within two months.]

ICANN has shifted away from bottom-up coordination.

ICANN's founding conceptual documents, the Green and White Papers, called for "private bottom-up coordination" as the governance model for ICANN. Despite early attempts at consensus-based decision-making, authority in ICANN increasingly rests at the top, with the Corporation's nineteen-member Board of Directors. The Supporting Organizations have proven to have limited roles in policy generation and consensus-building. Increasingly, final ICANN policies are generated by ICANN staff and Board members. As a result the Board has moved away from the consensus-based, bottom-up practices which were originally a critical element of its conception.

[The board is captured by special interests and even the elections for the at-large were tainted by ICANN's selection of candidates rather than completely open nominations by the at-large. community. It is anything but bottom up, open and transparent.]

4. ICANN's process for selecting new gTLDs was flawed.

CDT has not taken a position on the merits of any particular gTLD or registry operator chosen by ICANN. Our focus has been on the process ICANN has used to select these domains and the potential rules it may impose on the use of domains. A different, better process might have yielded very similar results.

[ Perhaps it would not have. ICANN should not have accepted applications for existing TLDs. While CDT does not single out any applicant, it also does not take into consideration that many applications were for pre-existing TLDs. This should never have occurred. In addition, there is no reason why existing TLDs should have to be under contract to ICANN in order to be included in the root. Furthermore, the $50,000 fee is outrageous and unnecessary. It was arbitrarily chosen at the last moment and is designed to include litigation that ICANN knew would come as a result of its flawed plans. Why should losers fund ICANN's defense against them and also fund implementation of the winners of this lottery?

In addition, the application questions themselves precluded applications by any entity that did not agree with sunrise or UDRP. ICANN states it was not a criteria, but the intimidation was there and all applicants for gTLDs who were selected had agreed to these terms. Another requirement was no involvement with other roots or having registrations. That also precluded application by all pre-existing TLDs. At first there was concern that .WEB registrants would be cancelled.

We have been criticized for not applying to ICANN. Our response is that application for us would have been a waste of money that could be better spent for customer service, development and infrastructure, for one thing. For another, we feel that our existence as a viable business and registry should be sufficient as proof of concept. As many of the ccTLDs have no contract with ICANN and do not adhere to ICANN policies and rules, we have a viable business and should not be compelled to suddenly contract with ICANN for our existence or inclusion in the USG root. Had ICANN not selected .BIZ for award to a competitor, we would not have been placed in this position. Having done so, ICANN has indicated to the world that co-opting another's business product is okay as is duplication in the name space. One obvious result is New.net's introduction of 17 colliders out of the 20 TLDs they launched. They insist that since no one "owns" a TLD, they have every right to make those business decisions. They are correct, of course. There is nothing to stop them and the precedent has been set by ICANN. Neither New.net nor ICANN is considering the chaos this arbitrary decision is causing in the DNS. As time progresses, it will become more obvious. We are witnessing the tip of the iceberg.

No amount of legislation will prevent the fracture and will certainly not cure it. Only reversing the precedent by preventing DoC from allowing it to occur in the USG root can assist in the global effort to maintain a stable, collision-free name space. It must be the responsibility of the caretaker of the largest market share to set the pace for the rest of the world. That caretaker is the U S government that assigned the task to the Department of Commerce. A wise president once said "The buck stops here." So it does. ICANN's burying it's head in the sand is not the answer. It must take responsibility for the result of its actions and take the initiative to mitigate its stubborn refusal to cooperate. However, in the end, it is the U S Government that has the final authority to mitigate this problem since ICANN has shown it is not inclined to do so.]

We note also that ICANN and its staff undertook this final selection in a very compressed period at the end of a years-long debate about the addition of new gTLDs. They did so in the face of tensions between at least three competing goals: an open, inclusive, and fair process; rapid completion of that process, with less than two months between the submission of proposals and the selection by the Board; and a "proof of concept" goal of a small number of finalists. These often irreconcilable goals led to many of the problems with the process.

[Because both DoC and ICANN have been reluctant for many years to move forward with new gTLDs and because of lack of cooperation with existing entities, scarcity and pubic pressure were factors in ICANN's actions. However, there was no reason to accelerate this process to the detriment of all concerned or to avoid an open and transparent process. Had there been an elected board, a full at-large contingent and cooperation, very little of the controversy would have reared its head. In view of the white paper and MOU, it is more important to have a fair and open process than to meet an unreasonable time constraint.]

ICANN staff made substantial efforts to conduct an open and accountable process in the face of these constraints, including the publication of hundreds of pages of applications and the creation of forums to discuss the proposals. Still, it is important to recognize features of the selection process that were flawed, that had anti-consumer and anti-competitive impacts, and that should not be repeated.

[There was inadequate notification to the public in all areas. Only those who were familiar with the ICANN website could find them. The majority of the public does not even know what ICANN is. It is the duty of ICANN to publicize their processes in order to invite the widest possible discussion. At the very least, all domain name holders should be notified via e-mail. The website should be re-designed to allow the public to find all documents and correspondence easily. Instead, much is buried and requires a sophisticated search to find anything.]

Initial Criteria - ICANN took the helpful step of publishing a set of criteria it would use in judging applications. In general, the substantive areas of the criteria reflected objective goals that had support within much of the ICANN user community. However, the criteria themselves were vaguely worded and their ultimate application was poorly understood. Most importantly, they were not purely technical in nature - reflecting policy goals as much as technical needs - and were not precise enough to be purely objective in their application.

[Again, the application criteria was intimidating at the very least and strayed quite far from technical issues. As for the user community, there was a great deal of concern regarding that criteria and some of it was expressed on the ICANN message boards. It was not objective and some have said it went as far as to restrain trade. ]

High Application Fee - ICANN required a $50,000 non-refundable application fee for all gTLD applicants. This high fee was a clear barrier to entry for many potential non-commercial applicants and biased the applicant pool in favor of large organizations that could risk the fee. This issue was raised by CDT at the Yokohama ICANN Board meeting, and the Board specifically refused to offer any form of lower application fees for non-profit or non-commercial proposals. Additionally, it appeared that the selection process would weed out applications without sophisticated business plans, legal counsel and technical expertise. These important qualifications for a strong application required access to large resources. Given the very short timeframe of the application period, non-commercial applicants were therefore put at an even greater disadvantage.

[I covered this earlier. The fee excluded not only non-commercial applicants, but small businesses as well. It was also meant to fund ICANN's litigation expenses against the very applicants who paid it, and to fund other ICANN activities. No small business could afford the requirements of the ICANN process. So once again, we are faced with big business ruling the Internet to the detriment and exclusion of the average user and small business.

There is truly no reason to exclude the smallest organization or business from entering the TLD market. The public will determine the success or failure of any registry. While there should be contingencies for failure in place, there is simply no good reason to exclude any entity that can make a TLD "live" and accept registrations. Many ccTLDs do not have sophisticated systems in place, and they are not necessary. Registries will evolve over time.]

Legitimacy of the Board - As noted above, policy-making at ICANN is still hampered by institutional challenges regarding its legitimacy and decision-making mechanisms. ICANN took the unorthodox step of seating newly elected At-Large Directors after the gTLD decision was made (even though in previous years new Board members had been seated at the beginning of meetings.) The argument that new Directors would not be sufficiently up to speed on the new gTLD decision is specious. The entire ICANN community was highly focused on the gTLD debate, the new Board members showed in public appearances that they were highly versed in the issue, and each of them had gone through an intense campaign in the Fall answering numerous questions that likely made them more expert on the nuances of the gTLD issue than many sitting Board members.

[It is true that the public and especially the at-large community was irate at the decision of the board to exclude the elected directors from decision making for the new TLDs. The attitude of the remaining directors toward the newly elected directors at the Melbourne meeting was indicative of the disdain toward the at-large community. The Chairman cut them off almost every time they spoke. I felt it was an embarrassing display. There were many comments made on the ICANN forums, the domain-policy mail list maintained by NSI and many other mail list forums. The at-large community was generally incensed that their elected Directors had no input in these decisions. ICANN should have either delayed the selections for the next quarterly meeting or seated the elected Directors prior to the MDR meeting.]

Evaluation of Applicants - The ICANN staff attempted, with the help of outside consultants, to apply its criteria to the 47 applications received. The published Staff Report provided a useful guide to this evaluation, but was published just days before the Marina Del Rey meeting with little opportunity for public comment or debate. There was little time for public presentation by each of the applicants, or for each appl