At the ICANN meeting in Seoul, the ICANN board decided to push back the roll out of new gTLDs to at least after the second quarter of this year.  A few weeks later, ICANN opened up a public comment period soliciting feedback on the possibility of creating a type of pre-application program where parties could express their interest in applying for new gTLDs.  In December the Corporation released a draft model for the “Expression of Interest” (EOI), the proposed gTLD pre-registration period, and accepted comments on the draft through the end of January.  As proposed, the EOI requires interested parties to indicate their intentions to apply for new gTLDs and pay a fee of $55,000. Additionally, only those parties who participate in the EOI will be eligible to officially apply for new gTLDs in the first round.
 
According to ICANN, the motivating factor behind developing the EOI program is to measure demand for new gTLDs.  But there’s one big problem – because participation in the EOI is required in order to apply in the first round of gTLDs, the demand measured by the EOI will be artificially inflated by those parties who are unsure of whether or not they really want a new gTLD but don’t want to be locked out of the first round just in case.  (There is a whole host of other problems with the EOI as well, including the fact that it would be introduced before the gTLD Applicant Guidebook is even close to being finished.)
 
Another problem is the “demand” ICANN and others refer to is confusing.  Any EOI results would not signal Internet user demand, but demand among groups that are seeking to possess top level domains either for private use (a company’s .BRAND) or to sell domain names to the public (a gTLD entrepreneur of any kind that wants to sell sunrise and live registrations to businesses and the general public). If an intended purpose of introducing new gTLDs is to offer the public more choices, isn’t the public’s demand for those choices the real “demand” that ICANN should be measuring?
 
I was reminded of this issue when I received a periodic newsletter from one of the corporate-facing domain registrars.  The newsletter mentioned the EOI as a means of measuring “demand for new gTLDs.”  First off, as I just said, it clearly is not an effectual means of measuring meaningful demand. But as I read it, I started thinking about how much it behooves domain registration companies, as well as ICANN, to say that the EOI is measuring demand.  If the so-called “demand” is high enough (and who will determine if it’s high enough?  That’s right, ICANN), then ICANN will be justified in pushing forward with the rollout of new gTLDs without determining if Internet users really want them.

After ICANN and the National Telecommunications and Information Administration (NTIA) signed the Affirmation of Commitments (AOC), Rep. Henry A. Waxman, Chairman of the House Energy and Commerce Committee, and Rep. Rick Boucher, Chairman of the Communications, Technology, and the Internet Subcommittee spoke out in support of the agreement.  Rep. Boucher praised the AOC’s ability to ensure accountability and transparency within ICANN. 
 
Back in June, Rep. Boucher’s committee held a hearing at which the then-CEO of ICANN, Paul Twomey, testified.  A pressing issue at that time was the amount of accountability ICANN had, not only to the government but to all of its shareholders.  There was a consensus among committee members that ICANN needed to be more transparent in its processes and more accountable to the general public.  Later this summer, in August, Rep. Boucher and Rep. Waxman, along with other members of the Energy and Commerce Committee, wrote a letter to Secretary Gary Locke of the DOC calling for an extension of the Joint Project Agreement (JPA) in some form, as well as permanent ties between ICANN and the U.S. government.
 
So it would appear that the mission has been accomplished.  ICANN and the U.S. government are now linked through the new AOC.  There’s just one problem – the AOC doesn’t provide the level of accountability that these Congressmen have called for, never mind the level ICANN needs as an organization.  The AOC creates a number of panels that will periodically review ICANN, and the U.S. government only holds a seat on one of them.  Yes, it is a positive thing that ICANN is still tied to the U.S. government through this agreement, but ICANN is no more accountable than it was under the JPA. 
 
In reality, the AOC simply does not include the accountability mechanisms that they had been pushing for. It is unlikely that this agreement will solve the problems that have existed within ICANN, and there is a chance that those problems will actually get worse.  ICANN cannot fall off Congress’s radar, because there is still work to be done. I hope the AOC is not just a way to check the ICANN issue off their list and check out of the matter without doing more of the important work that needs to be done.

The House Judiciary Committee’s Subcommittee on Courts and Competition Policy held a hearing yesterday on the potential rollout of new TLDs and how such a rollout would affect competition.  At start of the hearing, House Judiciary Committee Chairman Conyers made a very good point—this is not a hearing that Congress should have had to pull together. As Steve DelBianco (Executive Director at NetChoice and a witness at the hearing) pointed out, if ICANN was working properly, there would be no need for Congressional intervention. Unfortunately, ICANN is broken and needs to be fixed if there is to be hope for a safe, stable and flourishing Internet in the future.

Just how broken is ICANN? Check out CADNA’s Top Ten list of things wrong with the organization. The Coalition has gotten positive feedback on this evaluation thus far- what are your thoughts?  
 

It is no surprise that brand owners have registered countless domain names that they don’t need.  Over the past few years, ICANN approved and released TLDs such as .EU, .INFO, and others.  Since there was a lack of real data, brand owners did the only thing they could, which was to register names defensively because of the threat of what might happen.  When .ASIA was released, we saw the number of registrations from brand owners begin to drop – likely a result of being fed up with registrar/registry profit driven domain policies.

The problem is that these prior new TLDs have rightly caused brand owners to be suspect of new launches. After so many sunrise periods that hyped the need for defensive domain name registrations, now it's like the boy who cried wolf- many launches are largely ignored. However, every now and again an important TLD change occurs that does necessitate action by brand owners.  One example of that is .CM.

This landscape of the .CM TLD was just recently formed. When FairWinds published a “Perspectives” on .CM cybersquatting back in 2006, the Cameroonian government was running the .CM registry.  At that time, there were only 200 domain names registered to .CM and all other names ending in .CM resolved to a PPC site.  NETCOM.cm Sari took over control of the registry in 2009 and opened registration of domains in .CM. Trademark owners were allowed to apply for their corresponding domains during a one-month sunrise period between June 14 and July 15 of 2009. Sunrise periods allow those with valid trademarks to register their domain name for a hefty sum before all domains become available to the general public. As of August 1, 2009, .CM domains can be registered on a first come, first serve basis regardless of trademark rights.

Because .CM, the ccTLD for Cameroon, is a very common typo error of .COM, its recent launch of unrestricted domain names opened up a new front on the war against cybersquatters.  As with typosquatting of domain name roots (as in “comcasft.com” for “comcast.com”), this form of typosquatting also involves third parties registering domains containing brand names with the intent of profiting off of users’ typing errors. 

In light of this change, we conducted a study to examine the actual response to .CM’s change.  We drew on the data used for a forthcoming study on general typosquatting to examine this phenomenon.  We began with Quantcast’s list of the most highly trafficked domain names, and from that list, we selected the top 250 that ended in .COM and whose root contained more than six characters.  That initial number expanded to 255 in order to include possible hyphenated versions (i.e., wal-mart.com and walmart.com).  Along with these 255, we included typo variations that receive high volumes of traffic and then checked to see whether each of these domains had been registered in the .CM extension.  A total of 183 had been registered in .CM; 121 domains contained the target root and the remaining 62 were typo variations of those targets. 

Out of the 183 domains, an astounding 97 percent are owned by a third party—only 6 domain names are owned by the target company.

Of those owned by the target company, only 4 resolve to the target site, while one displays search results and the last does not resolve.  In total, 97 of the domains owned by a third party lead to pay-per-click sites, meaning cybersquatters are directly profiting off 55% of those domains. 

Another interesting tidbit was found in four domains that led to sites for competing brands.  Staples.cm resolves to OfficeDepot.com, Travelocity.cm resolves to Expedia.com, Walgreens.cm resolves to DrugStore.com and Walmart.cm resolves to eBay.com.  None of these four domains are owned by the competitor, but rather by third parties.  While cybersquatters are not profiting directly from these sites, they are still causing damage to the brands in question and potentially depriving them of sales. 

When ICANN approved new TLDs in the past and registries held sunrise periods for brand owners, many brands rushed out to buy domain names in TLDs like .PRO and .INFO only to realize later that they held very little value for their business.  Although .CM has opened to the public, the registration rates among brand owners remain low. This may be a result of brand owners being skeptical of the value of a .CM domain name. Some may be failing to realize how different this new TLD is—after all, it is common for Internet users to accidentally type .CM in place of .COM. Others may be distrustful of a new registry sunrise period given that ICANN’s policy of allowing registries to operate however they want has essentially resulted in brand domain names being held for ransom by the registry in the form of sunrise periods. In the case of .CM though, brand owners must learn that even if they have no intention of doing business in Cameroon, owning key names in that extension is critical because users are typing them into the browser bar accidently.

What I take from this situation is that while we are all growing incredibly frustrated with the name space and ICANN policies, we need to be diligent in our review of each change.  It is usually best to be conservative with launches, but there are cases – like .CM – where a more aggressive and targeted strategy is warranted.