2015-04-14

The dot SUCKS Conundrum: ICANN, FTC, OCA, New gTLD Domains

“… they say shipwrecked fellows’ll make a meal of friend as quick as they would of a total stranger... But I don’t see the conundrum in your case, I guess it’s up to both parties to take care of their own skins.” --Edith Wharton, The Custom of the Country.
Things just keep going from bad to worse for ICANN and its new gTLDs. A year ago, ICANN predicted that 33 million new gTLD domain names would be registered in FY2015 (July 1, 2014-June 30, 2015), then lowered that estimate to 15 million domain names, and today, with only a little more than two months to go, we have a total of only about 5 million new gTLD domain names registered according to ntldstats.com, of which less than 4 million were registered in this fiscal year (about 1.4 million new gTLD domain names were already registered in June, 2014, before this fiscal year began). And now new gTLD domains are hemorrhaging registrations as first-time renewals come due and registrants decide new gTLDs are not worth the renewal registration fees.

In addition, after ICANN had collected its money and started delegating new gTLDs into the Internet Root, it was reported that the new gTLDs compromise the stability and security of the Internet DNS, fail to work across Internet, and reportedly "break stuff."

How much worse can it get? Well, as almost everyone now knows, ICANN, when confronted by the results of its own ill-conceived and misbegotten new gTLDs policy and program, decided last week to throw under the bus one of its own new gTLD contractors a/k/a ICANN's "customers" or "partners"--Vox Populi, Registry operator of .SUCKS--without any ICANN finding of wrongdoing or breach by Vox Populi of its Registry Agreement with ICANN!

How did we arrive at this sad state of affairs? Unsurprisingly, it's all about the money--there was money, a lot of money, to be made, by ICANN itself, as the sole monopoly in the world with the ability to "sell" new generic top-level domains, thanks to authority granted it by the United States Department of Commerce, as well as money to be made by the domain name industry--registry operators, registrars, consultants, lawyers, service providers, et al. In that kind of environment, the ideals of Jon Postel et al, and the public interest, were sacrificed on the high altar of Mammon.

All along the way, there were numerous warnings that ICANN chose to ignore:

"We strongly believe that ICANN should substantially reduce the maximum number of new gTLDs that could be introduced in the initial round to a much smaller number. Indeed, doubling the number of existing [22] gTLDs in one year would be an aggressive increase. The imposition of a more reasonable limit is necessary to curb the risks inherent in expanding the number of gTLDs, including the proliferation of malicious conduct. We recommend that ICANN use this round as a limited pilot program, as it has done in previous rounds, assess the organization’s ability to evaluate, introduce, and manage additional gTLDs, conduct an assessment of the increased risks posed by the program, and then consider whether a more significant expansion would be appropriate. --US Federal Trade Commission, letter to ICANNDecember 16, 2011 (emphasis added).

“'The public at large, consumers and businesses, would be better served by no expansion or less expansion' of [new gTLD] domains." -- Jon Leibowitz, former Chairman of the US Federal Trade Commission (New York Times, August 17, 2013, emphasis added).

“…. I view it as little more than a predatory shakedown scheme. The business model behind this gTLD [.SUCKS] seems to be the following: force large corporations, small businesses, non-profits, and even individuals, to pay ongoing fees to prevent seeing the phrase “sucks” appended to their names on the Internet… a gTLD like “sucks” has little or no socially redeeming value and it reinforces many people’s fears that the purpose of gTLD expansion is to enrich the domain name industry rather than benefit the broader community of Internet users …” --US Senator John D. Rockefeller IV, letter to ICANNMarch 12, 2014 (emphasis added).

Now resulting in this:

"... It [.SUCKS pricing] creates a mockery of the new TLD process and calls into question the very ability of ICANN as an organization to be able to administer the new gTLD program. This issue is particularly timely, given the accountability debate in which ICANN is embroiled... we call on ICANN to put a stop to this coercive scheme based on an abusive modification of ICANN’s RPMs. ICANN is the sole entity in the world charged with the orderly introduction of new gTLDs in a secure, reliable and predictable manner. If ICANN is unwilling or unable to put a halt to this, then who is?..." --Gregory S. Shatan, President, Intellectual Property Constituency (IPC), letter to ICANNMarch 27, 2015 (emphasis added). 

To which ICANN responded:

Regular Meeting of the New gTLD Program Committee of the ICANN Board of Directors was held telephonically on 1 April 2015 "... At the Committee's request, staff provided an overview of the points raised in a 27 March 2015 letter from the Intellectual Property Constituency concerning the .SUCKS TLD (pdf)... Committee members expressed various views about the claims made in the IPC letter, and staff noted that it was evaluating the claims, and exploring possible alternatives to address the noted issues. The Committee asked to receive updates on this matter going forward. The Chair called the meeting to a close."

"... John Jeffrey, ICANN’s General Counsel & Secretary, has sent a letter to the United States’ Federal Trade Commission (FTC) and Canada’s Office of Consumer Affairs (OCA) asking them to consider assessing and determining whether Vox Populi is violating any laws or regulations enforced by their respective offices... We are following up to request responses from these two regulatory agencies and hope that you and the IPC might also encourage these entities to evaluate this, and additionally might offer your assistance should they have any questions..." --ICANN's Akram Atallah letter to Gregory S. Shatan, April 9, 2015. (emphasis added)

"... ICANN, through its registry agreement, may seek remedies against Vox Populi [.SUCKS Registry] if the registry’s actions are determined to be illegal… ICANN has limited expertise or authority to determine the legality of Vox Populi’s positions, which we believe fall within your [FTC and OCA] respective regimes… should the FTC or the OCA make a determination of illegal activity, it could be that Vox Populi will also be in breach of its registry agreement…” --John O. Jeffrey, ICANN General Counsel, Letter to the U.S. government's Federal Trade Commission (FTC) and the Government of Canada's Office of Consumer Affairs (OCA), April 9, 2015 (emphasis added).

Beyond the Contract: Partnering to Strengthen Business and Consumer Protections - ICANN blog post by Allen Grogan, ICANN Chief Contract Compliance Officer, April 9, 2015: "... ICANN is not a regulator ... if Vox Populi is not complying with all applicable laws, it may also be in breach of its registry agreement. ICANN could then act...." (emphasis added)

Apparently, even if the FTC and OCA find Vox Populi has violated a regulation or law, ICANN says only it "may" then do something, and by that time, months, if not years, will have passed!

UPDATE: The ICANN Business Constituency on May 8, 2015, sent its own letters to ICANN, the FTC, and OCA, reiterating and supporting the position taken by the IPC above:
Questions:
  • Will the FTC (or OCA) even open an investigation? Will the FTC open an investigation and expand it to include ICANN and all of its new gTLD contractors (registry operators)? Will the FTC utilize its full and broad authority and powers in both competition (anti-trust) and consumer protection matters--ICANN is a monopoly granting new gTLD registry operators a monopoly (sole authority over a TLD)?
  • Will the European equivalents of the FTC and OCA (and perhaps other governmental authorities throughout the world) open their own investigations into these matters?
  • How will Vox Populi, the Intellectual Property Constituency, and other interested parties now respond to ICANN, the FTC, and OCA?
  • How will all of this impact the US Congress, House and Senate, and their opinions and views of the IANA transition proposed by Larry Strickling, NTIA, US Department of Commerce?
  • Will the global multistakeholder community now, finally, turn away in disgust from ICANN and its conflicted, inept management and coordination of the global Internet DNS, and seek an international solution based on the global public interest, not special interests, based in Geneva or some other neutral locale and jurisdiction?
In the meantime, the media are having a field day:



Caveat Emptor!


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