New gTLDs and the 1%

November 26, 2013

Beitrag von Minds + Machines CEO Antony Van Couvering

While Occupy Wall Street and other groups representing the so-called 99% are getting most of the press, the 1% is raising its profile as well, at least when it comes to gTLDs. They are complaining that introducing global choice and competition to the Internet will cost them money. The chief of the Association of National Advertisers (ANA) now says that it has “spent the last few months” considering the new gTLD program, and has found it lacking. They want ICANN to shut the whole thing down.

The ANA sprang up in August to “vigorously oppose” the new gTLD program. Recently it has morphed into a larger group called CRIDO, and this group (which, ironically, counts among its membership companies that are actively pursuing new gTLDs) is picking up the pace by issuing more threats at ICANN, telling them that they must abandon the new gTLD program or — something. There are vague murmurs of a lawsuit, which I’ll discuss below. Their number one cause of complaint? New gTLDs will cost “the industry” money.

ICANN has seen fit to allow this opposition to go unanswered for nearly two months. It might therefore be useful to review why the CRIDO effort is doomed to failure, and why it deserves its doom. While the companies behind CRIDO and the ANA are powerful, in this case the 1% is not going to frustrate innovation in the name of keeping a small blip in “industry” costs. This article explains why they won’t succeed.

The ANA and CRIDO may control 99% of the money, but they have about 1% of the facts. Facts may not matter that much when you’re running a FUD (fear, uncertainty, and doubt) campaign, but for completeness’ sake it is worth pointing out that the figures being presented by the ANA and CRIDO have as tenuous a relationship with reality as Somalia does with law and order.
As Jeff Ernst of Forrester Research points out in a recent article, the ANA claims that new gTLDs will cost their members “billions of dollars” without once providing any verifiable basis for this claim.

Minds + Machines, by contrast, put together a study, “What Cost New gTLD Trademark Infringements to Brands?” that is easily replicable by anyone. Completely fact-based, relying on publicly available data, our study shows that infringements are correlated very highly with volume, and that if new gTLDs increase the number of names in the market by 15%, there would be an additional 316 UDRP filings per year, or an average of ten cents cost per trademark. If the domain name market grew more (which indicates greater public benefit), there would undoubtedly be more UDRPs, but the costs would remain very low.

GoDaddy has also done a study, which concludes that UDRPs have gone up in volume due as much to the ease of filing as to any increase in cybersquatting:

Although there is little doubt that the ongoing practice of cybersquatting factors into the tide of arbitration cases, the ease of filing, along with more vigilance on the part of IP holders, undoubtedly influenced the measurable increase in cases.

In addition ICANN has hired numerous economists, who all reach the same conclusion: yes, there will be costs to brands, and even though the public benefits are not yet clear, there are some obvious benefits that can be predicted. In general (the economists say) competition is in general a good thing, and there is certainly no compelling case to be made that the introduction of new gTLDs will cause harms that will outweigh the public good.

Last Come, First Served?
The ANA and CRIDO face a credibility problem. After 5 years (or 10 years, depending on how you count) of very public, noisy, open debate about these issues, these groups show up (or are formed) at the 13th hour, after the gTLD policy was approved and the ship had left the harbor. Where were they all these years? The ANA published some comments on the 2nd Draft of the Applicant Guidebook, but otherwise, in face of the program that they now claim is the worst thing since unsliced bread, they were completely silent. Although their absence wouldn’t matter much if they had some compelling evidence, they don’t. In effect, what they are saying is that we never gave it much thought, but now that they’ve woken up, they want everything changed. Try going to GoDaddy and telling them that you’ve suddenly realized that sex.com is valuable, and they need to overturn all their procedures and give it to you because you want it. The ANA is receiving a distinct lack of sympathy around their timing.

Congressional Hearings to Protect the 1%?
It appears that there is no appetite in Congress for hearings on this subject, even leaving aside the questions of whether the U.S. can or should act unilaterally. Of course appetites in Congress can be created, and that is what CRIDO is trying to do. But “Protect the 1%!” is hardly a rallying cry in the U.S. these days.

What Does the U.S. Government Think?
The NTIA, an arm of the Department of Commerce that oversees ICANN, has been lobbied intensively by interests opposed to the new gTLD program for the better part of a decade. The extensive new protections for trademarks are one result, as is the the Early Warning System for governments worried about TLDs that might threaten law and order. Another indication of the view of the U.S. Administration comes from the modified IANA contract specification. The IANA is the largely technical function, now in ICANN’s hands, that would actually enter new gTLDs into the root zone. The IANA contract comes up for bid periodically, and it would be a disaster for ICANN to have IANA’s technical function changed into a technical + policy function — effectively adding another layer of policy development on top of ICANN’s, outside and separate from the multistakeholder model and controlled exclusively by the U.S. Government. There was some fear of this when the bid specifications first came out. The initial Notice of Inquiry said:
For delegation requests for new generic TLDS (gTLDs), the Contractor shall include documentation to demonstrate how the proposed string has received consensus support from relevant stakeholders and is supported by the global public interest.

But the amended notice says:

The contractor shall verify all requests related to the delegation and redelegation of gTLDs are consistent with the procedures developed by ICANN. In making a delegation or redelegation request, the Contractor must provide documentation verifying that ICANN followed its policy framework including specific documentation demonstrating how the process provided the opportunity for input from relevant stakeholders and was supportive of the global public interest.

In other words, the US Government has removed the policy-making component from the IANA contract. Instead of IANA making a decision about whether the application is in the public interest, IANA is now asked only whether ICANN policy was followed. This is very a much of vote of confidence in ICANN policies, and a turning away from setting up any alternate source of authority. Asking the U.S. Government to overturn a process it initiated, participated in, and supports seems forlorn — especially when just two days ago they received the blessing of the European Union, who said in a press release, “the new IANA tender is a clear step forward for global internet governance.”

Overturning 10 Years of Global Consensus Based on a Lobbying Campaign
Even if ICANN really wanted to be ordered around by trade associations, it really doesn’t have the power to just overturn policy that’s been developed through its processes. The Board does have a lot of power, but overturning the new gTLD program, with its hundreds of thousands of volunteer hours, its votes of consensus on provisions, its carefully tuned compromises, is tantamount to throwing away its entire governance model. If CRIDO really expects ICANN to abandon the gTLD program, it needs to provide a rationale of why the multi-stakeholder process is a mistake and should be jettisoned. Until it can do that convincingly, ICANN can’t cancel or even much modify the gTLD program — and the governments who have lined up behind ICANN’s governance model (including the U.S.) will have a hard time supporting any initiative that vitiates it.

ICANN Has Been Preparing for This
ICANN fully expects to be sued over the new gTLD program. They believe this for the same reason that it took them ten years to come up with the new gTLD program — there are huge number of affected people, and you won’t make all of them happy. That’s why ICANN has fully examined the legality of their program, and has set aside a lot of money to fight any challenges. Where do you think a big portion of that $185,000 fee is going to be spent? ICANN has budgeted a large amount to be spent in court. I can guarantee that ICANN has spent a lot more time thinking about this than the ANA has.

On What Grounds Would an Injunction Be Granted?
If the ANA or CRIDO were to sue ICANN, on what grounds would they succeed in getting a judge to enjoin ICANN from continuing the program? I’m not a lawyer, but I invite those who are to comment and present an compelling rationale. I haven’t heard any.

Why Are They Doing This?
The effort of ANA and CRIDO has been pretty substantial. They have already spent more in lobbying and marketing than any introduction of new gTLDs could cost them. So the question is, why? Why are they putting all this effort, so late in the day, into a cause that seems quixotic at best? The answer has nothing to do with defensive registrations, or cybersquatting. Instead, it’s because new gTLDs will change the face of advertising and branding, and like a lot entrenched industries, they’re terrified of change. Here’s what Thom Kennon, SVP and Director of Strategy at Y&R says:

Shame on the ANA for taking such a misinformed and myopic view of one of the most significant changes in how brands and consumers find each other since the birth of the commercial Web.

Although none of us have any idea of the broad, deep implications of this re-architecting of the interwebs, it doesn’t take much of a creative bent to see the powerful opportunities this will likely afford every brand — and organization, and industry and even cities, states and towns.

Unlike the ANA — whose argument here seems to be nothing more than a repetitive loop of “ICANN’s wrong, it doesn’t add up…”- some of us are working to explore what this change might offer for the future of the brands and businesses we represent.

As the ANA (and sadly any of its members who take this Luddite advice) sit on the sidelines, some of us are exploring how the early brand movers — in the right category with the right architectural strategy — can reap huge, long-term rewards and competitive advantage from leading instead of lagging.

Here’s some better advice: every single brand manager, marketing strategist, technologist, content developer and CMO should start spending some serious time understanding what these changes can and will bring to how the ‘human web’ is evolving. Be smart, nimble and opportunistic and be ready to steal the march from those who chose to worry and wait.

What Would Happen if the ANA Got Its Way?
People who have been involved in the ICANN process scratching their heads. Where were all these companies and associations over the last five years of policy developments? What is this group and what is their aim? Are they really going to sue, and do they have any hope of succeeding? Is there anything fact-based about their assertion, or is this a pure lobbying play? And since ICANN is in its usual dilatory fashion saying nothing in response to these groups, many are wondering what’s going on, and what will happen to the new gTLD program.

The ANA and CRIDO, using the same arguments, but in a louder voice, are not going to succeed in overturning a hard-fought consensus that has involved all the significant interests in the space. The arguments have been taken seriously, been given years of hearings, have resulted in numerous changes to the gTLD program to accommodate the concerns that they raise, additional protections have been put in place, and the finally the program passed on a vote by the ICANN Board. Governments, businesses, intellectual property owners, ISPs, civil society, everyone participated.

Internet innovation doesn’t stop because it upsets someone’s business model. Let me refer readers to an article published in 1995 by Newsweek (now nearly defunct). Among other the many reasons it gives as to why the Internet will never work, it says:

The truth is no online database will replace your daily newspaper… no computer network will change the way government works. We’re promised instant catalog shopping — just point and click for great deals. We’ll order airline tickets over the network, make restaurant reservations and negotiate sales contracts. Stores will become obsolete. So how come my local mall does more business in an afternoon than the entire Internet handles in a month? Even if there were a trustworthy way to send money over the Internet — which there isn’t — the network is missing a most essential ingredient of capitalism: salespeople.

That’s what the ANA is saying: you need to prop up our outdated business model as an “essential ingredient” — or else capitalism will end. But actually we don’t, and it won’t.

The new gTLD program is not going to be undone. For that to happen would mean jettisoning 10 years of the ICANN experiment and all the work that has gone into it. Too many people, governments, and institutions have put in too much work, and have too much at stake for that to happen. If, on the basis of a lobbying campaign in the United States by some fearful people, a global consensus were overthrown, the splitting of the root is not far behind, and if that happens the results will be much worse for ANA and its members (and everyone else) than the introduction of new gTLDs.

The Long Gestation and Afterlife of New gTLDs

August 12, 2013

Beitrag von Minds + Machines CEO Antony Van Couvering:

ICANN continues to flail, pointlessly. The latest in a series of missteps that could easily have been avoided is its recommendations on what to do about a report on the potential for confusion and misaddressing when someone’s internal network names match the name for a new gTLD, and they have misconfigured their routers and/or DNS to the extent that someone typing in a new gTLD name might end up in the middle of someone else’s network.

You’d think that if someone misconfigured their machinery it might be a good idea to get them to fix it, instead of reconfiguring the entire new gTLD program, particularly when it’s not clear that anyone would notice. But that’s what ICANN has done. New gTLD applicants have now been consigned to three categories:

  • Hell (.corp and .home), which means everlasting torment. These names are unlikely ever to be delegated, but so that the torture can continue, there is always hope.
  • Limbo (20% of all new gTLD apps), which means waiting around for six months while ICANN slowly decides that there is no danger.
  • Purgatory (the remaining 80%), which means that no names may be made live (although they may be allocated/sold) for at least 120 days after their contract has  been signed.
  • In case you were wondering, there is no Paradise.

This is all based on a 197-page study by Interisle, which purports to show which new gTLDs are most at risk for “causing” confusion. I will leave it to others more technically gifted than me to talk about the various ways in which the ICANN staff recommendations based on this study do not reflect reality. Suffice it to provide just one example: “HSBC” (in Limbo) is probably a name that is found almost exclusively found in HSBC’s own network, and since HSBC won’t be selling names anyway, and is presumably happy to fix any errors in its network in double-quick time, it hardly warrants a long delay in delegation. There are other similar common-sense snafus in the staff recommendations.

ICANN could have avoided what promises to be another embarrassment by publishing the study and asking the wider community what to do about it, instead of making ad-hoc recommendations. There are actually some smart people who could have helped turn this report into something actionable and reasonable — the multi-stakeholder model has many advantages, if ICANN would only use them.

Here are some of the flaws in the recommendations that will be raising eyebrows and tempers across the globe:

  • The 20% cutoff (the dividing line between Limbo and Purgatory) is entirely arbitrary. There is no scientific basis for such a division.
  • The Curve of Confusion (the distribution of names that according to the report may cause confusion) follows a power curve. There are many orders of magnitude between the top few and the rest of the 20%. Basically, there are 5 to 10 names that have any potential for real trouble, and a long way between those any of the other 20%.
  • There is no good reason given (nor any that I can imagine) for taking six months to come up with further recommendations.
  • There is no consideration given to the likelihood of confusion at the end-user level, and no consideration of the damage it would cause if it did occur. Some have already noted that network misconfiguration already occurs with some frequency in the .com and .net zones, and yet the Internet continues to function.
  • There is no consideration given to how trivially easy it is (in many cases) to fix any errors that do occur.

The New TLD Applicant Group (NTAG), which comprises many of the new gTLD applicants, will be writing to ICANN on these (and other) obvious points, and also responding to the methodology and reliability of the study itself.

The new gTLD program itself is a recognition that the ICANN Board and staff shouldn’t be in the business of choosing which new gTLDs get delegated. ICANN will be receiving a number of suggestions over the coming weeks, from NTAG and from individual companies, on how to undo this debacle-in-the-making. There are ways to mitigate potential problems caused by network configuration errors short of semi-randomly condemning new gTLDs to needless and costly delays.

ICANN startet Vertragsunterzeichnungen

July 25, 2013

Letzte Woche ist das 47. ICANN Treffen in Durban zu Ende gegangen.

Die wichtigste Nachricht dürften die abgeschlossenen Verträge zwischen ICANN und den ersten new gTLD-Bewerbern gewesen sein.

Fast 7 Jahre nachdem das new gTLD Programm von der GNSO (Politikbestimmendes Gremium innerhalb der ICANN) beschlossen wurde und fast 2 Jahre nachdem das Programm vom ICANN-Vorstand verabschiedet wurde, hat die ICANN den ersten Vertrag von insgesamt über 1.000 new gTLDs unterzeichnet.

Diese Ehre wurde شبكة. (.shabaka) zuteil. „Shabaka“ bedeutet so viel wie „Webadresse“ in arabisch. Voraussetzung für den Start der relevanten Top-Level-Domain ist das Bestehen eines “Pre-Delegation” Tests, im Zuge dessen die technische Infrastruktur der Top-Level-Domain getestet wird, um einen reibungslosen Betrieb zu gewährleisten.

Zuerst wird ICANN die Verträge der ca. 100 IDN (Internationalized Domain Names) Bewerbungen unterzeichnen. IDNs sind Top-Level-Domais in nicht-lateinischen Buchstaben wie z.B. kyrillischen, chinesischen oder arabischen.

ICANN plant die Unterzeichnung von ca. 20 Verträgen pro Woche. Die Reihenfolge der Top-Level-Domains entscheidet sich durch eine zugeordnete Nummer aus einem 2012 stattgefundenen Losverfahren. Es können nur die TLDs ihre Verträge unterzeichnen, gegen die keine Beschwerden vorliegen und die sich nicht in einem sogenannten „Contention-Set“ (mehrere Bewerber befinden sich im Wettbewerb um ein und dieselbe Top-Level-Domain) befinden. Es wird erwartet, dass Beschwerde-Verfahren und „Contention-Sets“ bis November durchgeführt werden.

Der Vertrag zwischen der Minds + Machines GmbH und ICANN für „.nrw“ wird voraussichtlich im Dezember 2013 unterschrieben. Der Start für „.nrw“ wird im März 2014 erwartet.

.nrw hat bestanden!

June 11, 2013

Die Top-Level-Domain „.nrw“ hat den Bewerbungsprozess der ICANN erfolgreich überstanden. Somit können bald Domains mit der Endung „.nrw“ registriert werden.

Düsseldorf, 12. Juni 2013 – Die „Internet Corporation for Assigned Names and Numbers“ (ICANN) hat über ihre Webseite bekannt gegeben, dass die Bewerbung der Minds + Machines GmbH für die Top-Level-Domain „.nrw“ erfolgreich war. „Somit hat sich jahrelanges Warten und die monatelange Arbeit an der „.nrw“-Bewerbung gelohnt. Wir sind über die Entwicklung sehr glücklich und gehen davon aus, dass „.nrw“-Domains Anfang 2014 registriert werden können“, begrüßt Minds + Machines Geschäftsführer Caspar Veltheim die Entscheidung.

Die ICANN kündigte im Jahr 2011 eine revolutionäre Änderung des Internet-Namensraumes an. Jedem Unternehmen und jeder Organisation war es nun möglich, sich um eine eigene Domainendung bei der ICANN zu bewerben. Die ICANN geht davon aus, dass neue sinnvolle Endungen das Internet übersichtlicher machen und Wettbewerb gefördert wird.

Gerade Bewerbungen um geografische Endungen wie „.bayern“, „.london“ oder eben „.nrw“ waren von großem Interesse. In der mehrere hundert Seiten langen Bewerbung, die von der nordrhein-westfälischen Regierung unterstützt wurde, überprüfte die ICANN den Bewerber intensiv. Die Messlatte war dabei sehr hoch, denn die ICANN ist für die Stabilität des Internets verantwortlich und eine Top-Level-Domain muss wirtschaftlich betrieben werden und auch hohen technischen Standards genügen.

Die nächsten Schritte

Als nächstes stehen der Vertragsabschluss mit der ICANN sowie letzte technische Tests bevor. Nachdem „.nrw“ dann in das Internet eingespeist worden ist, kann die erste Registrierungsphase – die sogenannte Sunrise-Phase – starten. Ausschließlich Inhaber von Markenrechten können in dieser Phase partizipieren. Deshalb empfiehlt Minds + Machines Unternehmen, sich in einer speziell von ICANN eingerichteten Markendatenbank zu registrieren, um sich für die Sunrise-Phase zu legitimieren. Rechteinhaber sollten sich frühzeitig an ihre Rechts- und Patentanwälte wenden, um die Wahrung ihrer Rechte vorzubereiten. Weiterführende Informationen findet man unter dem Trademark Clearinghouse.

Nach der Sunrise-Phase steht „.nrw“ der Öffentlichkeit zur Verfügung.

Über Minds + Machines

Die Minds + Machines GmbH wird mit „.nrw“ für Nordrhein-Westfalen eine Heimat im globalen Internet schaffen. Voraussichtlich Anfang 2014 werden Bürger, Organisationen und Unternehmen Nordrhein-Westfalens die Möglichkeit bekommen, ihre Domain mit der Endung „.nrw“ zu registrieren. Durch die langjährige Erfahrung des Teams von Minds + Machines in der Domain-Branche, ist das Unternehmen für den Betrieb der „.nrw“-Top-Level-Domain bestens gewappnet. Das Projekt wird ebenfalls von der nordrhein-westfälischen Regierung unterstützt.

Sinkt die Zahl der TLD Bewerbungen weiter?

May 23, 2013

Die ICANN geht laut ihrem Budgetplan für das Jahr 2014 davon aus, dass 646 von insgesamt 1.930 TLD Bewerbungen zurückgezogen werden.

Die ICANN geht davon aus, dass 105 Bewerber sich noch vor dem Ende der “Initial Evaluation” zurückziehen werden, um wenigstens noch von der Rückerstattung von 70% der Bewerbungsgebühr zu profitieren. Weitere 540 Bewerber werden sich laut ICANN nach der “Initial Evaluation” zurückziehen. Diese Bewerber bekommen immerhin noch 20% – 35% der Bewerbungsgebühr zurück.

Zurzeit meldet die ICANN insgesamt 66 zurückgezogene Bewerbungen.

Die Gründe für den Rückzug liegen dabei oft daran, dass es häufig Bewerbungen um ein und dieselbe Endung gibt. Die ICANN nimmt an, dass sich die Bewerber entweder untereinander einigen oder ein Joint-Venture gründen.