Guest Post: Has ICANN Already Taken the GAC’s Advice on “Closed Generic” gTLDs?

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This is a guest post By Philip S. Corwin, Esq, Founding Principal, Virtualaw LLC; Of Counsel, Greenberg & Lieberman; and Strategic Advisor, ICANN Sherpa

TheDomains.com publishes Guest Posts from time to time, by well known leaders and authorities in the domain industry. As always Guest Posts are posted in their entirety and unedited:

“”On the afternoon of April 11, 2013, the last day of ICANN’s recent Beijing Meeting, its Governmental Advisory Committee (GAC) delivered a highly detailed 12-page Communique outlining safeguards and other substantial alterations that its constituent governments want implemented before new gTLDs can launch.

The document has implications for every new gTLD applicant, but especially for those seeking gTLD names relating to regulated industries and professions as well as other sensitive categories. Its consideration and implementation-to whatever extent ICANN’s Board decides to accommodate the GAC – may well delay the program for at least several months. And large chunks of it are likely to be adopted – because there is a presumption in favor of ICANN accepting GAC advice, and because ICANN needs at least multi-governmental acquiescence, if not active support, to retain its long-term control over the DNS.”

“The Communique contains GAC advice on the controversial subject of “closed generic” gTLDs.

These are generic, dictionary words in which the applicant/registry operator holds no trademark rights yet proposes that it shall be the sole registrant, thereby excluding all present and future competitors from obtaining a domain address that may be the most relevant to its goods, services, and overall identity. Amazon and Google are the most noted new closed generic gTLD applicants, but companies such as L’Oreal and Richemont have also sought to register generic word, non-brand gTLDs consisting of a key industry term (e.g., .beauty and .jewelry) from which all competitors could be excluded.

On this matter, the GAC advice is simple and clear – a closed generic should only be allowed if it serves the public interest, not just the applicant’s private interest:

For strings representing generic terms, exclusive registry access should serve a public interest goal.

Following receipt of the GAC Communique, ICANN invited all new gTLD applicants to file comments on any aspect of it, with a closing date of May 10th. It also invited the general public to comment on the “safeguard” advice, which includes the “Exclusive Access” directive, with that window closing on June 4th.

It is probable, once all comments are analyzed by staff, that the ICANN Board will respond to the GAC at the next public meeting scheduled for Durban, South Africa in mid-July.

Yet, even while these comment periods remain open, it appears that ICANN may have already accepted the GAC advice on closed generics.

On April 29th ICANN released a revised draft of the New gTLD Registry Agreement (RA) – until this document is finalized no new gTLDs can be added to the Internet’s root zone, because there will not be a standard agreement for a registry operator to sign. Specification 9 of the RA, the “Registry Operator Code of Conduct” (COC), contains a significant modification that shuts an arguable loophole for closed generics and moves ICANN substantially toward the GAC’s position.

Section 6 of the COC contains an exemption provision that was developed in response to concerns of ICANN’s Business Constituency that the Applicant Guidebook did not allow an applicant to operate a .brand gTLD (consisting of a trademarked company name or product) solely for its own use. Section 6 was not altered in the new RA and states in its entirety:

Registry Operator may request an exemption to this Code of Conduct, and such exemption may be granted by ICANN in ICANN’s reasonable discretion, if Registry Operator demonstrates to ICANN’s reasonable satisfaction that (i) all domain name registrations in the TLD are registered to, and maintained by, Registry Operator for its own exclusive use, (ii) Registry Operator does not sell, distribute or transfer control or use of any registrations in the TLD to any third party that is not an Affiliate of Registry Operator, and (iii) application of this Code of Conduct to the TLD is not necessary to protect the public interest. (Emphasis added)

As can be seen, Section 6 contains the same “public interest” standard that the GAC articulated. It says that in deciding whether to grant a COC waiver ICANN must determine that enforcement of the COC is unnecessary for protection of the public interest, while the GAC wants closed generic gTLDs permitted only where ICANN makes an affirmative determination that a particular application serves a public interest goal. So, while the COC exemption and GAC approval standards are not identical they are close, with both based upon a “public interest” standard.

The provision of the COC that closed generic applicants would be seeking an exemption from is Section 1.b, which formerly stated that an applicant registry operator and all its subsidiaries, affiliates, contractors, and all other related entities would not register domain names in its own right, except for names registered through an ICANN accredited registrar that are reasonably necessary for the management, operations and purpose of the TLD.

That provision had been cited by some closed generic applicants as exempting them from any need to seek an ICANN exemption if they simply declared that the “purpose’ of their gTLD was to exclude all other registrants. While many lawyers would cite this as a classic attempt to “have the exception swallow the rule”, the argument was made with a straight face and whether ICANN would buy it remained an open question.

Until now – the revised RA contains a major reconstruction of Section 1.b, deleting the phrase “that are reasonably necessary for the management, operations and purpose of the TLD” and replacing it with new language stating that a registry operator “may withhold from registration or allocate to Registry Operator up to one hundred (100) names pursuant to Section 3.2 of Specification 5”.

Now the cross-referenced Section 3.2 is also an entirely new portion of the RA, and reads:

“Registry Operator may activate in the DNS at All Levels up to one hundred (100) names (plus their IDN variants, where applicable) necessary for the operation or the promotion of the TLD. Registry Operator must act as the Registered Name Holder of such names as that term is defined in the then-current ICANN Registrar Accreditation Agreement (RAA)…At Registry Operator’s discretion and in compliance with all other terms of this Agreement, such names may be released for registration to another person or entity”.

So, read in combination, revised Section 1.b of Specification 9 and new Section 3.2 of Specification 5 allows any gTLD applicant to reserve up to 100 domains necessary for the operation or promotion of the gTLD. “Management” and “purpose” are gone; “promotion” has been added.

These unanticipated modifications make it much more difficult for a closed generic applicant to argue that it can avoid the necessity of applying for a COC exemption – which ICANN will decide under the “public interest” standard discussed above. And even if such a loophole is argued and accepted, 100 domains is likely to be far short of what the applicant envisioned for the scope of its closed generic gTLD – for example, Amazon almost surely intended far more than 100 domains for a proprietary .book.

Now that’s not the end of the story.

ICANN still has to forge some overarching policy position on whether and when a closed generic gTLD does not harm the public interest. That policy might accommodate .brands on the basis of protecting trademark rights at the top level of the DNS, or it might not (the GAC advice mentions no exemption for trademarks consisting of generic words).

Whatever policy is adopted, each closed generic applicant applying for a COC exemption must be judged against it.

If the policy is heavily weighed against closed generic approval, the question will arise as to whether applicants for closed gTLDs who claimed they relied upon an earlier version of the COC will be permitted to alter their applications in the middle of the ongoing evaluation and approval process.”

So the story’s ending is yet to come. But, make no mistake, the COC revision in the latest version of the RA moves ICANN much closer to the GAC position on closed generics — making the public interest the paramount consideration for approval.

Comments

  1. BrianWick says

    The perception of “leveling the playing field” will do nothing more than completely level whatever market there could be for any .generic.

    Its just a remix of that sizzling hot .travel :)
    - i.e. legislating free enterprise out of existence

  2. says

    Hello Phil,

    This is the most refreshing and professional Content to hit this blog. Cleaerly written and most understandable content, in our Industry is a welcomed blessing.

    There has been lots of BS permeating the blog waves, and we are so glad to have you represented here. The flood of new gTLD data will make it more and more important for businesses to be clearly represented.

    The day of having Nonsensical and contrived names to be found in Cyberspace are clearly ending.

    (.COM ) Generic, Pure Play Addresses are key to future business successes in Online Marketing.

    Consumers will blunt any gTLD penetration of the marketplace and Google has many agencies watching them with their own Google glasses, and it will make any controlling inroads they are planning , most difficult.

    Thanks for your professional Observations.

    Gratefully, Jeff Schneider (Contact Group) (Metal Tiger)

  3. says

    Excellent post Phillip.

    If you are right, ICANN may have not thought in sufficient depth about what they are trying to achieve, because their thinking is dependent on the context/nature of a string. And as such, the wording in the proposed new agreements will actually run the risk of making the issues the GAC is try to prevent more prevalent/problematic in open gTLDs.

  4. BrianWick says

    “…actually run the risk of making the issues the GAC is try to prevent more prevalent/problematic in open gTLDs”

    Sounds exactly like what happens when you have too many lawyers in the White House and Congress :)

    And owen – I think I will now step outside and roam freely howling at the “.com” moon

  5. says

    Jeff

    Well perhaps you should know that I’m a major contributor to the ICA and on the Board, and I get all of the membership information as well as all correspondance on the issues that the ICA is dealing with, and I haven’t seen your name anywhere, therefore disputing your claim to be a member and therefore saying you are full of shit, perhaps

  6. says

    sounds like you’re just a faceless cyber ghost then Jeff..

    but seriously, this would pretty hilarious if i didnt realize how irritating it is for the blog owner. more and more a good number of posts (including mine) are directed at Jeff.

    heres the problem though: there is nothing to argue about with the guy. he just BS’s and makes you wonder if hes playing a character.

    if he is its the most amazing troll ive ever seen. get rid of the guy.. nobody will think you’re unfair for doing so. the posts are useless and do nothing for meaningful conversation.

  7. BrianWick says

    There is no difference in TLD generics like .info, .store, .shop, …

    And today with the .info registry Afilias Ltd is dumping their Sunrise Pending Reallocation domains on NameJet like:
    auto.info
    gold.info
    jobs.info
    hosting.info
    games.info
    creditcards.info
    job.info
    auction.info
    books.info
    casinos.info

    What are these (and any of the “choice” new non.com’s) really going to sell for in a secondary market relative to all the lawyers, laws, rules, regulations and legal fees stifling free market capitalism….
    Talk about “Full of Shit” :)

    This is all about one thing – new registries selling non.com’s that have essentially no secondary market that will likely never get used – just renewed.

    That is non a monopoly – that is just selling shit people do not need. So may the highest bidder win.

  8. LM says

    omfg did I Really just read that? Some one saying mhb “knows nothing” ? really? Really?
    Are you f’ing insane?? Everyone knows mike can just get on the horn and say hey Phil is this moron paying you $10k a year or what/ I think not.
    Thousands of people in this industry and closely related ones follow thedomains because amongst all the noise mhb is one of the ones (there are several of course) who actually do know just a little bit more than nothing, enough to rise above the noise and shine.
    Thats gone from the sublime to the ridiculous to the obnoxious and theres no call for it.

    On another note – while I completely support the ICA and Phil Corwin’s unrelenting efforts to actually hold the line against some of the nastiness coming our way theres no way in hell I can afford the members fee. Maybe you could do a line in tailored ICA hoodies and tees and Id gladly buy one :D

  9. says

    R.E. = ” Well perhaps you should know that I’m a major contributor to the ICA and on the Board, and I get all of the membership information as well as all correspondance on the issues that the ICA is dealing with, and I haven’t seen your name anywhere, therefore disputing your claim to be a member and therefore saying you are full of shit, perhaps ”

    You have this bad habit of twisting things. I said WE not ME belong which is absolutely fact, many of my colleagues and partners, have contributed.

    Whats this Character assassination attempt on me and my colleagues all about. Here we should be talking about Phils professional work and all you can think of is biting at my heels? I know my agenda whats yours ?

    Gratefully, Jeff Schneider (Contact Group) (Metal Tiger)

  10. BrianWick says

    Candidly Jeff (who passed up on a $6MM Offer for his USeBiz.com domain :))-
    Although I respect everybody has a business model – or agenda – candidly – I have no clue what you are talking about ALL the time – at least in my view nothing substantive – and in my 15 calendar year in the business – I am still one of the biggest students around in the business :)

    I think I am going back outside now to howl at the daytime moon.

  11. says

    Candidly Brian, although I respect your opinion you may have 15 years experience in Domaining and thats surely a plus. You obviously are not going to be hornswaggled into taking some so called professionals advice on buying .Whatevers to get lost with no traffic Online and that is to your credit.

    I do not expect you to know or understandJeff the Marketing Analytics that I do with th 40+ years experience that I have. History is recording all of us and 5 years from now the BS and the truth will be sorted out and I am very comfortable in making the comments that I do.

    Thank you for your opinion.

    Gratefully, Jeff Schneider (Contact Group) (Metal Tiger)

  12. says

    ontheinterweb,

    My IQ could decline by 20 points, and still be ahead of you.

    This is a chess game you are playing and you are obviously outmatched.

    Where do you get your Marketing Advice?

    Most people like you come in with guns blazing and no Marketing savvy and expect to win in Online Marketing.

    Make no mistake about it, all we talk about on this Blog is about New World Online Marketing savvy, that the B schools sadly do not teach.

    People who question me like you, with far less expertise in Marketing do not cut it.

    New World Online Marketing has very little to do with SEO Manipulated Search Engine Marketing that the Ad companies push to lead Online Business owners into The Search Engine Maze where their businesses are lost.

    Rick Schwartz could teach you whats up if you don’t believe me.

    Gratefully, Jeff Schneider (Contact Group) (Metal Tiger)

  13. says

    i dont even personally know Rick Schwartz but im going to take a wild guess and say he doesnt want you throwing his name around like it lends YOU any credibility.

    also Jeff, people who throw around the word “professional” and “experience” as much as you do are usually full of shit.

    and also, there is always the possibility i have MORE marketing experience than you. im not saying i do, but i could be 90 years old you know. its possible.

  14. says

    Hello Phil,

    In your opinion does it seem that the ICANN Clan has any concerns about the DNS Infrastructure handling the Massive loads of conflicting data that the introduction of the gTLDs will produce.

    Gratefully, Jeff Schneider (Contact Group) (Metal Tiger)

  15. says

    “because ICANN needs at least multi-governmental acquiescence, if not active support, to retain its long-term control over the DNS.”

    Can you explain why you think this is the case?

  16. says

    All these massive loads of conflicting data added to the already Massively manipulated search engines only push more online businesses to Direct Navigation Pure play Generic .COMs in order to be found efficiently.

    In effect ICANN is adding signifigantly to the DNS infrastruture instability.

    I thought ICANNs job , was to create DNS stability.

    Gratefully, Jeff Schneider (Contact Group) (Metal Tiger)

  17. LM says

    The DNS is one of the most stable systems in the world. It has had a very good run with close to 99.999% uptime. The addition of extra tld strings does not increase the actual load at all – things that do that are more devices/used more.
    This is so way over your head its untrue. Pundits like you love to throw out these scare stories but actually it has zero basis in reality.
    The addition of extra tld strings basically boils down to 1 line in the root servers, and some extra nameservers of which there are tried and tested models. Hell even verisign will be running some I have no doubt theyll crack the rather mundane technical requirements.
    We get you dont like the idea, but no need to make stuff up.

  18. says

    @LM

    Great opinion from what did you say your real name is?

    Whats your professional basis for making these claims? Because very qualified people are asking my same questions.

    Gratefully, Jeff Schneider (Contact Group) (Metal Tiger)

  19. BrianWick says

    Back on point – With the .info registry Afilias Ltd putting numerous pure great terms like loan.info and loans.info into NameJet auction – no different than “closed generic” terms like .Shop or .RealEstate – those sale prices will dictate – if all this has been over-lawyerized to “rhetoric” – sorry friends – just need to call the bullshit :)

  20. says

    Being Marketing Analysts ourselves, We collectively figured the gTLD Marketing angle immediately.

    From a Marketing standpoint,the gTLDs are designed specifically to Market Traffic back to the applicants (.COM Profit Centers )

    A Question you may ask yourselves is why would you purchase a gTLD if you did not already own the (.COM Profit Center ) ? ?

    So how long do you all think it will take the SMART MONEY to start Buying their own
    (.COM Profit Centers ) which they can rake in their own revenue traffic with??

    Gratefully , Jeff Schneider (Contact Group) (Metal Tiger)

  21. says

    @JEFF SCHNEIDER,

    Yes, you are right with that for them !!! Marketing will pay heed to the .com for the SMART MONIES, not with them, but FOR them !!!

    I do wish for the .com when they will take for it to me ??? When do the big players will see that ??? To be !!!

    - WSJ

  22. says

    @ WSJ

    You only have to look to the online business owners being lost to consumers by SEO Manipulated Search Engine Marketing for the answers. The Smart money is now and will increasingly use .COM Profit Centers to gain Revenue advantage over all other .Whatevers.

    There have been record #s of .COM startups entering the pipeline as we speak. The Parking Platforms are emptying out of .COM Profit Centers.

    The Online Business Expansion Wave is coming and its being led by .COM Profit Centers and not .whatever amusement sites.

    OCCAMS RAZOR

    Gratefully, Jeff Schneider (Contact Group) (Metal Tiger)

  23. says

    @JEFF SCHNEIDER,

    Yes !!! to the form manipulate of the .com takers !!!

    When for the do .com will have reign with SUPREME !!! I do agree with your stand – it will be the Expansion Wave indeed with them for the to take place with .com !!!

    Thank you, sir !!!

    - WSJ

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