On December 8, 2011, The United States Senate Committee on Commerce, Science, & Transportation held a full committee hearing to examine the merits and implications of the New gTLD Program and ICANN’s continuing efforts to address concerns raised by the Internet community. Witnesses included Kurt Pritz, Senior Vice President of ICANN; Fiona Alexander, Associate Administrator, Office of International Affairs, National Telecommunications and Information Administration, U.S. Department of Commerce; Dan Jaffe, Executive Vice President, Government Relations for the Association of National Advertisers and representing the Coalition for Responsible Internet Domain Oversight; Angela F. Williams, Senior Vice President and General Counsel, Young Men’s Christian Association of the United States of America and representing ICANN’s Not-for-Profit Organizations Constituency (NPOC); and Esther Dyson, founding Chairman of ICANN.
Discussion of Cost Concerns
Early testimony and questioning centered on the costs associated with applying for and registering domain names in the new gTLDs. Indeed, the NPOC testified that many non-profit organizations could be shut out of the new program due to the significant resources required to apply for and run a registry for ten years. Moreover, with the possibility of hundreds of new gTLDs entering the root as soon as 2013, both for-profit and non-profit witnesses testified that they would potentially feel compelled to defensively register their marks in the Trademark Clearinghouse, as well as defensively register numerous second-level domains across the new gTLDs to protect their many different brands. They would also possibly have to file an increased number of URS or UDRP objections against cybersquatters. All told, witnesses testified that registering and enforcing their brands in the new gTLD space will potentially require additional funds and possibly increased staffing to monitor the new gTLD spaces and manage their expanded domain name portfolio. This highlights the potential need for brand owners to begin allocating additional capital to combat infringing domains through defensive registrations (including in the Clearinghouse), dispute resolution proceedings (including the new URS or UDRP), and litigation.
Discussion of Law Enforcement Concerns
Concerns about cybersquatting and online fraud led to a discussion about the efficacy of the authentication and integrity of the Domain Name System’s (“DNS”) security system and how it will operate in the new gTLDs. Largely, this discussion centered on the authentication of accurate domain name registrant information that is stored in a registry’s WHOIS database. ICANN testified that new gTLD registries will be required to operate “thick” WHOIS, which means that registries will be required to obtain a broader set of registrant contact information from each registrant than registries currently are required to keep, as well as searchable WHOIS and centralized zone data access to the WHOIS; all making it easier to locate potentially nefarious registrants. There was a discussion about concerns over the accuracy of WHOIS data, even in the “thick” model required with the program, followed by questions about standards for checking WHOIS data accuracy. While increased WHOIS requirements will likely be in place for new registries and their registrars, tracking down cybersquatters and fraudsters will likely be an ongoing issue for trademark holders and underscores the desirability of taking advantage of the Trademark Clearinghouse and Sunrise Period mechanisms in order to protect the goodwill inherent in their brands.
Other Program Updates
ICANN indicated in its testimony that it estimates that approximately 500 to 1,000 new gTLD applications will likely be seen in 2012 during the application window currently slated for January 12, 2012 to April 12, 2012. In addition, ICANN announced that its Board of Directors approved a new conflicts policy that will forbid any ICANN Board member from working for any new gTLD operator that they have voted on approving for 12 months after they leave ICANN. Also, notably, ICANN announced that the fee for applicants in need of financial assistance will be decreased from the standard $185,000 application fee to $47,000. ICANN has yet to release complete details on who will qualify for this reduced fee.
Next Steps for Congress
With ICANN set to accept applications on January 12, 2012, several members of the Senate stressed the need for ICANN to take very serious note of the cost and security concerns at stake before proceeding with the program’s launch. Indeed, at various points, various Senators including Chairman Rockefeller recommended that although we would all have to get used to the new names, ICANN should consider moving forward “slowly and cautiously.” However, the Senate did not indicate that further hearings would take place or that any strenuous efforts to delay the program would be initiated. However, the Senate hearing spurred a companion House Subcommittee on Communications and Technology hearing entitled “ICANN’s Top-Level Domain Name Program” which will take place on December 14, 2011 and address similar concerns.
Though unlikely to affect the planned January 12, 2012 launch of the new gTLD application window, this hearing is a firm indication that brand owners, trademark holders, and other stakeholders are becoming increasingly aware of the fact that the Internet landscape is about to change. Indeed, the hearing has provided ICANN with a renewed call to consider the timing of its launch, while ensuring that the costs and security concerns of all Internet stakeholders are sufficiently considered. In addition, the Congressional hearing should also serve to remind trademark owners that they should be taking preliminary steps to protect their rights in the new gTLD space by developing a strategy and budget for defensive domain registrations, planning to participate in the Clearinghouse, and taking advantage of the new rights protection mechanisms. In addition, we will continue to monitor details regarding the reduced fees for applicants in need of financial assistance, and provide updates as to which applicants are likely to qualify as soon as those details become available. Accordingly, all interested trademark and Internet stakeholders should pay close attention to the unfolding of the New gTLD Program over the coming months.