Report (Part One) of

Working Group C of the Domain Name Supporting Organization

Internet Corporation for Assigned Names and Numbers

 

 

            This document is Part One of the Report of Working Group C.  It sets out the rough consensus of  the group regarding whether there should be new generic top-level domains (gTLDs), and if so, how quickly they should be added to the root as an initial matter.  Part Two of the Report, which will follow, will address other issues relating to the addition of new gTLDs.

 

Introduction and summary

 

            Working Group C has reached rough consensus on two issues. The first is that ICANN should add new gTLDs to the root.  The second is that ICANN should begin the deployment of new gTLDs with an initial rollout of six to ten new gTLDs, followed by an evaluation period.  This report will address each of these issues separately.  For each of the issues, it will summarize the discussions within the working group, arguments pro and con, and comments received from the public.  It will then briefly summarize the ongoing work of the group.

 

Procedural and outreach history

 

            The Names Council approved the charter of Working Group C on June 25, 1999, and named Javier Sola as its chair.  On July 29, the working group members elected Jonathan Weinberg co-chair.  The working group currently has more than 140 members, not all of whom are active.  It includes extensive representation from each of the constituencies.  (There is one partial exception:  For most of the life of the working group, no NSI representative participated.  When WG-C's co-chair solicited greater

participation from the Registry constituency, Don Telage explained that NSI had chosen not to involve itself in the WG-C process.  That representational gap has been filled now that Tony Rutkowski — an active WG-C member from the start — has joined NSI in a senior policymaking capacity.)

 

            On October 23, 1999, the Working Group released its Interim Report.  That report described the issues on which the Working Group had reached rough consensus to date.  It also included seven "position papers," setting out alternative scenarios for the introduction of new gTLDs.  On November 23, 1999, the Names Council formally requested public comment on the Interim Report.  This call for comments was publicized on a variety of mailing lists maintained by the DNSO, including ga-announce, ga, and liaison7c (which includes the constituency secretariats).  In addition, WG-C's co-chair spoke at the meetings of most of the constituencies at the Los Angeles ICANN meeting, and urged constituency members to file comments. Nearly 300 comments were filed in response to the interim report.  They included responses from leading members of all of the constituencies but two — the record does not include comments from the ccTLD or Registry constituencies (although ccTLD members and Mr. Rutkowski participated in the discussions that led to the Interim Report, and WG-C's co-chair expressly solicited the comments of both of those groups).

 

            This report was circulated to the working group one week before its planned presentation to the Names Council.  Two members of the group suggested small changes in wording.  There was otherwise consensus that the report accurately described the progress and conclusions of the working group.  No formal vote was taken.  One member of the group suggested that, in the absence of a formal vote, it was not appropriate to designate the document as a report of the working group.  The matter was put to the working group, and a  majority of the group members who expressed opinions considered a formal vote unnecessary for this purpose.

 

Issue One — Should There Be New gTLDs?

 

Discussions within the working group

 

            The working group quickly -- by mid-August, 1999 -- reached consensus that there should be new global top-level domains.  There was very little dissent from this position.

 

Arguments supporting the consensus position

 

            Expanding the number of TLDs will increase consumer choice, and create opportunities for entities that have been shut out under the current name structure.  Today, .com stands astride the name space: it has more registrations than all other top-level domain names combined, and is ten times the size of the largest ccTLD.  Yet it has become nearly impossible to register a new simple domain name there: Almost a year ago, in April 1999, a survey found that of 25,500 standard English-language dictionary words, only 1,760 were free in the .com domain.  Millions of additional names have been registered in .com since then.

 

            This situation is undesirable.  It requires companies to register increasingly unwieldy domain names for themselves, and is inflating the value of the secondary (speculators') market in .com domain names. Existing second-level domain names under the dot com TLD routinely change hands for enormously inflated prices. These are legitimate trades of ordinary, untrademarked words; their high prices reflect the artificial scarcity of common names in existing gTLDs, and the premium on .com names

in particular.

 

Companies that currently have a domain name in the form of <www.companyname.com> have an extremely important marketing and name-recognition tool.  They have an advantage over all other companies that do not have addresses in that form, because the companyname.com firms are the ones that consumers, surfing the Net, will be able to find most easily.  If the name space is expanded, companies will be able to get easy-to-remember domain names more easily, and the entry barriers to successful participation in electronic commerce will be lowered.  Addition of new gTLDs will allow different companies to have the same second-level domain name in different TLDs.  Those businesses will have to compete based on price, quality and service, rather than on the happenstance of which company locked up the most desirable domain name first.

 

            Similarly, addition of new gTLDs could enlarge noncommercial name space, and allow the creation of top-level domains designed to serve noncommercial goals.  One proposal made in WG-C, widely applauded in the public comments, advocated the creation of a new top-level domain to be operated by North American indigenous peoples.  Other examples are easy to imagine.

 

            In response to the unsatisfied demand for new gTLD names, several ccTLD registries, including .nu, .cc, and .to, have transformed themselves into gTLDs, marketing their names globally as alternatives to .com, .net and .org.  This is undesirable from the perspective of protecting trademark rights, since no mechanisms are in place to ensure that these TLDs enact the same trademark-protective procedures (such as the UDRP) now in place in the gTLDs.  The transformation of ccTLDs into globally marketed commercial gTLDs deprives the local Internet community of the benefits of a ccTLD more closely oriented to serving that community.  To the extent that ICANN wishes to deploy new gTLDs subject to community-determined policy guidelines, finally, the growth of ccTLDs in response to pent-up demand for TLDs frustrates that goal.

 

            Creation of new generic top-level domains can be beneficial in other ways.  One proposal before WG-C, with significant support, urges the creation of multiple registries, each capable of managing registrations for multiple TLDs, so as to eliminate the single point of failure for the registration process.  Under this view, multiple new gTLDs are necessary to support the multiple registries needed for stability.

 

            Adding new gTLDs to the root, finally, is an important part of ICANN's mandate.  ICANN was created because the institutions that preceded it were unable to resolve the intense political and economic conflicts created by demand for new top-level domain names. The U.S. Department of Commerce's White Paper saw the establishment of policy "for determining the circumstances under which new TLDs are added to the root system" as one of ICANN's fundamental goals.

 

Arguments opposing the consensus position

 

            Three arguments were made, or suggested, in WG-C that cut against the addition of new gTLDs.  The first relates to trademark policing concerns: Expansion of the domain space will create additional opportunities for the registration of domain names that are confusingly similar to existing trademarks.  The relationship between domain names and trademark rights presents an important and difficult issue, and is appropriately addressed by registry data maintenance requirements, dispute resolution mechanisms such as the UDRP, and any other device that ICANN may choose to adopt. Trademark owners' concerns in this regard are important ones, and not to be overlooked.  The argument that ICANN should impose substantial delays on the initial deployment of new gTLDs in the interest of adopting or perfecting such mechanisms, however, did not win much support within the working group except among Intellectual Property constituency members.

 

Second, some working group members suggested that an increase in the number of top-level domains could confuse consumers, because it would be harder for consumers to keep in mind and remember a larger set of top-level domains.  Accordingly, any increase in the number of new gTLDs should be cautious.  Notwithstanding requests, though, no working group member offered studies or other evidence backing up this view.

 

            Finally, some working group members suggested that the perceived need for new gTLDs was illusory.  For the reasons described above, it is the sense of the working group that that view is incorrect.

 

Public comments

 

            The comments received by the working group fell into several categories. A few commenters questioned whether new gTLDs were indeed needed: this group included Bell Atlantic, Marilyn Cade and John Lewis (writing on behalf of some members of the Business & Commercial constituency).

 

            Some commenters took no position on whether new gTLDs should be added. Rather, they focused their comments on the position that deployment should be delayed until after implementation of the uniform dispute resolution procedure, improved domain name registration procedures, and protection for so-called famous marks.  These commenters included, among others, Jonathan Cohen, Dr. Victoria Carrington, AOL, British Telecom, Disney, INTA, Nintendo of America and Time Warner.  Comments noting the need for caution in deploying new gTLDs, but not explicitly referencing famous-marks protection, were filed by the Software and Information Industry Association (which supports adding new gTLDs, but only after the creation of a robust, responsive whois system), John Lewis (writing on behalf of some members of the Business and Commercial constituency), and Steve Metalitz.

 

            A third set of comments urged the addition of new gTLDs without further delay.  These  commenters included, among others, Hirofumi Hotta (emphasizing that discussion of famous-mark protection should not delay the gTLD rollout), Kathryn Kleiman, Michael Schneider, Computer Professionals for Social Responsibility, Melbourne IT, AXISNET (Peruvian Association of Users and ISPs), the United States Small Business Administration's Office of Advocacy, Register.com, InterWorking Labs,  Tucows.com, InterAccess Company and   PSI-Japan.  Raul Echeberria filed comments urging that the establishment of new gTLDs was important and positive, but that rules should be devised to avoid massive speculative purchases of domains in the new TLDs, or trademark holders simply duplicating their existing domains.

 

            A fourth, and by far the largest, set of comments supported the creation of a specific proposed new domain: .NAA, proposed as a new gTLD to be run by North American indigenous peoples.

 

 

Issue Two — What Should be the Nature of the Initial Rollout?

 

Discussions within the working group

 

            In September 1999, the WG-C co-chairs made the determination that the working group had reached rough consensus supporting a compromise proposal that the initial deployment of new gTLDs should include six to ten new gTLDs, followed by an evaluation period.  Because there had been no formal consensus call, though, the working group held a vote in December 1999 to reaffirm that consensus.  Following the lead of Working Group B, the working group determined in advance that a two-thirds margin would constitute adequate evidence of rough consensus.  The vote reaffirmed the compromise position as the rough consensus of the working group, by a margin of 44 to 20.  (A substantial number of working group members did not cast votes.  In addition, some working group members, having been solicited to vote, sent messages to the list explaining that they were declining to take a position at that time, and listed themselves as consequently abstaining.  Neither the non-voters nor the abstainers were counted in

figuring the two-thirds majority.)

 

            Members of the working group had expressed sharply varying positions on the nature of the initial rollout.  Some working group members urged that ICANN should immediately announce its intention to authorize hundreds of new gTLDs over the course of the next few years.  While ICANN might interrupt that process if it observed serious problems with the rollout, the presumption would be in favor of deployment to the limits of the technically feasible and operationally stable.  If ICANN simply deployed a

small number of new gTLDs with no commitment to add more, they argued, the public would have to make registration decisions based on the possibility that the small number of new gTLDs would be the only options.  This would give the new registries oligopoly power and the ability to earn greater-than-competitive profits; it would encourage pre-emptive and speculative registrations based on the possibility of continued artificial scarcity.  By contrast, they urged, an ICANN decision to deploy a large number of gTLDs would enable competition and a level playing field: If ICANN announced an intention to add hundreds of new gTLDs over a three-year period, no new registry could exercise market power based on the prospect of a continued artificial scarcity of names.

 

            Other working group members took the opposite approach.  New gTLDs, they urged, could seriously aggravate the problems facing trademark rightsholders in the existing domain name space.  Accordingly, they urged, new gTLDs should be introduced only slowly and in a controlled manner, and only after effective trademark protection mechanisms had been implemented and shown to be effective.

 

            A third set of working group members took still another approach.  In the long term, they stated, it would be desirable for ICANN to allow the deployment of new gTLDs to the limits of the technically feasible and operationally stable.  As a short-term matter, however, the immediate deployment of hundreds of new TLDs would not be prudent.  The operationally safer course, rather, should be to deploy a smaller number, and to follow that deployment with an evaluation period during which the Internet community could assess the initial deployment.  ICANN would go on to deploy additional TLDs if no serious problems arose in the initial rollout.

 

            The proposal that ICANN start by deploying six to ten new TLDs, followed by an evaluation period, was crafted as a compromise position to bridge the gap separating the three groups, and to enable a rough consensus to form in the middle ground.

 

Arguments supporting the consensus position

 

            The consensus position has the advantage of being a compromise proposal supported by a wide range of working group members.  In a bottom-up, consensus-driven organization, broad agreement on a policy path is valuable for its own sake.  The sense of the bulk of the working group is that this proposal strikes an appropriate balance between slower, contingent deployment of new gTLDs and faster, more nearly certain, deployment.

 

Arguments opposing the consensus position

 

            Three arguments were made in the working group against the proposal.  The first was that the contemplated initial deployment was too large; rather, some WG members urged, it would be appropriate, following the implementation of effective intellectual property protections, for ICANN to roll out no more than two or three new gTLDs.  Most WG members felt, however, that this figure was smaller than caution dictated, and that such a modest deployment would not give ICANN the information that it would need to make sensible later decisions.

 

            The second argument was that the contemplated initial deployment was too small: that, as detailed above, a deployment of only six to ten, without an upfront commitment to roll out many more, will be a  half-measure that would grant oligopoly power to the lucky registries selected for the initial rollout.  This argument has considerable force.  Most of the working group members felt, however, that an initial  commitment to many more than six to ten would not be operationally sound.  Until we see the consequences for the domain name space of adding new gTLDs, there are advantages to a more

circumspect path.

 

            The final objection raised was that the consensus agreement answered the wrong question: The working group, said some, should not be addressing the number of new gTLDs at all before resolving such issues as whether the new top-level domains should be general-purpose (like .com), special-purpose, or some combination of the two.  The working group is currently addressing these issues (they will be discussed in Part Two of the WG's Report), and certainly it would not have been inappropriate for it to have sought to reach conclusions on those matters before discussing Issue Two.  But most members of the working group concluded that the size of the initial rollout could and should be addressed first, before resolving less tractable issues.

 

Public comments

 

            As with Issue One, public comment on this issue was divided.  Bell Atlantic and Marilyn Cade supported the introduction of just a single new gTLD at the outset.  John Lewis, on behalf of some members of the Business & Commercial constituency, suggested the introduction of a very small number; British Telecom and Time Warner urged the initial rollout of only a few.  Other commenters, including Jonathan Cohen, Dr. Victoria Carrington, AOL, Disney and Nintendo of America, generally endorsed the statement that the introduction of new gTLDs should be slow and controlled, and should incorporate an evaluation period.

 

            By contrast, Hiro Hotta, Kathryn Kleiman, Michael Schneider, Computer Professionals for Social Responsibility, AXISNET, InterWorking Labs, Tucows.com and InterAccess Company supported the  position that ICANN should, at the outset, announce a schedule for introducing hundreds of new TLDs.  The Office of Advocacy, U.S. Small Business Administration concluded that ICANN should start with a limited introduction of new TLDs followed by an evaluation period, but that ICANN should announce in advance that it would continue with a steady introduction of additional TLDs so long as pre-announced technical criteria were met.  Raul Echeberria, by contrast, emphasized that ICANN should evaluate the operation and market acceptance of the TLDs added in the initial rollout before creating or announcing more.  Melbourne IT, PSI-Japan and Register.com all supported the compromise position of an initial rollout of six to ten new gTLDs followed by an evaluation period.

 

Ongoing work

 

            The section that follows has not been distributed to and approved by the working group, and should be read solely as a report of the co-chair.

 

            Issues that must be resolved before ICANN can deploy new gTLDs include the following:  What process should ICANN use to select new gTLD registries?  By what process should new gTLD strings be selected?  Must a new gTLD be “chartered”?  What minimum qualifications must a gTLD registry have?  Must all gTLD registries operate an open SRS?  What rules should be in place regarding access to registrant data?

 

            There is a consensus call outstanding on the issue of ICANN’s selection of new gTLDs and registries for the initial rollout.  Working group members have been asked to convey, by March 19, their approval or rejection of the following compromise position:  “Registries would apply describing their proposed TLD, and an ICANN body or process would make selections taking into account the characteristics of both the registry and its proposed TLD.”

 

            There has been extensive discussion within the working group of a set of eight “principles,” drafted by Philip Sheppard and Kathryn Kleiman, against which applications for new TLDs might be judged.  The proposed principles, in their current iteration, incorporate the keywords Certainty, Honesty, Differentiation, Competition, Diversity, Semantics, Multiplicity and Simplicity.  It is too early to say whether the working group will reach a consensus favoring the use of a version of these principles in evaluating gTLD applications.

 

--------------

 

A detailed summary of the public comments on Issues One and Two is available at <http://www.dnso.org/wgroups/wg-c/Arc01/msg00490.html>.


OBJECTION TO THE RELEASE OF THIS REPORT AS "REPORT (PART ONE) OF WORKING GROUP C OF THE DOMAIN NAME SUPPORTING ORGANIZATION, INTERNET CORPORATION FOR ASSIGNED NAMES AND NUMBERS"

 

As a member of Working Group C, I object to the release of this report "Report (Part One) of Working Group C of the Domain Name Supporting Organization, Internet Corporation for Assigned Names and Numbers" (hereafter referred to as "Report of Working Group C")  for the following reasons:

 

1.   The  members of Working Group C have never given approval of this Report.  As such, this is not a "Report of Working Group C".

 

2.   The members of Working Group C have not given approval to allow the co-chairman of Working Group C to use his absolute discretion in determining what goes in this particular report and then releasing this report as a "Report of Working Group C".  As such, this is not a "Report of Working Group C".

 

3.  The co-chairman of Working Group C has decided to release this report as the "Report of Working Group C" over the known  objections of some members of Working Group C to releasing the report as the "Report of Working Group C'.

 

4.   Some members of  Working Group C probably do not know this "Report of Working Group C" exists.  An extremely short period of time (approximately 7 days) was allowed to review and provide any suggestions regarding this document.

 

5.   The co-chairman has refused to change the name of the report to "The Co-Chairman's Report on the Progress of Working Group C".  This would permit the material in the report to be released but allow the members of Working Group C  to approve and release a report from Working Group C entitled "Report of Working Group C".

 

6.   The issuance of this report, without the members of Working Group C approving, either the language in the report or granting this authority to the co-chairman, sets a bad precedent for future reports.  Why have members?

 

7.   Public Comments have never been requested on this "Report of Working Group C".  Prior public comments were received on an Interim Report.  The "Report of Working Group C"  being released now has new materials for which public comments have never been received.

 

8.   The release of any "Report of Working Group C" without first obtaining public comments on a draft of the report is contrary to ICANN's stated policy of " the development of consensus based policies (such as policies concerning new names) in an open, transparent and bottom-up manner in which interested individuals have an opportunity to participate and comment" (see ICANN FAQ on new generic top level domains - posted September 13,1999).

 

9.  This report was hurriedly prepared and little time allowed for review because "Members of the Names Council" requested "WG-C file a report before the NC's meeting in Cairo next week."   Either Working Group C should be allowed sufficient time to study the issues, explore all the options and timely complete a report or the Names Council should disband the Working Group.  To require a Working Group to hastily prepare a report for the sake of an upcoming meeting, with insufficient time for members to study, provide comments and approve the report, does not establish a lot of faith in the ICANN process.

 

 

Bob Broxton

Member of Working Group C

Richmond, VA