ICANN Stakeholder Comments Show Some Support for, But Mainly Strong Opposition to, Closed Generic TLDs

ICANN asked the Internet community for input on how to determine when a proposed domain name is generic, and under what circumstances a particular TLD operator should be allowed to have “open” or “closed” registration policies. Existing provisions of ICANN’s new gTLD program don’t give specific guidance on the issue, it said. Potential new provisions may be considered based on comments received and further analysis, it said. The staff analysis will go to the board’s new gTLD program committee for consideration.

Google has run into such strong opposition from the public and private sector to its applications for .app, .blog, .cloud and .search that it will change them to open gTLDs. “Details of these plans will be forthcoming in the near future,” wrote Chief Information Officer Ben Fried. Exclusive control of .cloud by either Google or Amazon, which also wants the gTLD, “would enable them to feasibly foreclose entry into the gTLD space by either emerging or existing competitors,” USTelecom said. TLDs “that consist solely of an industry generic term like .app, .cloud, mobile, insurance or .news should not be run as a closed registry” but must be open to all comers to achieve real competition and consumer choice, Yahoo said.

CTIA slammed the multiple applicants seeking to wall off for their exclusive use generic terms like .mobile, .phone, .call, .talk and .cloud. Each word is “central to the wireless and telecommunications industry’s highly competitive markets,” but applicants want to use them in a closed and potentially anticompetitive manner, it said. “These are not hypothetical concerns.” Dish said if it receives .mobile, it will operate it as a restricted, exclusively controlled TLD and won’t offer registration to the general public, CTIA said. Google has proposed to operate .talk as a closed registry, “despite the fact that it has millions of subscribers to its Google Voice product, and recently entered the United States domestic markets as a facilities-based provider of information services,” said USTelecom.

Google, however, said many of the innovations expected from the new gTLD program will emerge from single-registrant models, mainly because purely open registries have only one function: selling domains. “There is nothing wrong with that, but it is neither new nor unique,” the company said. In contrast, it said there are many creative models for TLDs that serve a more curatorial purpose “and we believe it is these models that will make the Internet better for both users and brand owners."

Much of the discussion about competition has to do with whether new gTLDs, or specific strings, have an inherent value from which applicants can somehow create competitive advantage, Google’s Fried wrote. In reality, Internet users tend to use the TLD names they're already comfortable with, such as .com, he said. Any new gTLD operator seeking to overcome users’ propensity to use .com names will have to make significant investments to raise awareness of the TLD and make the case for users to change their behavior, he said. If the new TLDs are successful, it won’t be due to the intrinsic value of generic term but because users have been enticed into using the domains, Fried said. Nevertheless, he said, Google will respond to the “particular sensitivity” within the Internet community about certain broad terms that serve as industry descriptors such as .cloud.

Google and Amazon’s plans “are extremely problematic,” said Consumer Watchdog, a frequent critic of Google over its privacy practices. It urged ICANN either to deny their applications or at least require generic TLDs to be open to all with a clear interest in the term. It’s one thing to use a TLD associated with your brand name, such as .Google, .Android or .Kindle, but “generic words used in a generic way should belong to all people,” wrote John Simpson, director of Consumer Watchdog’s Privacy Project.

Microsoft has applied for .azure, .bing, .docs, .hotmail, .live, .microsoft, .office, .skydrive, .skype, .windows and .xbox. It said a “generic” TLD should be defined as one that “represents an industry category in which the applicant competes,” and that ICANN should ban closed generics. The company noted that it owns the trademark rights for most of the names but not .docs, which it has applied for as a closed registry. Despite the fact that its policy position may affect its own pending application, Microsoft said it believes ICANN should promote competition, innovation and a free and open Internet by rejecting generic terms as closed gTLDs.

Google and Amazon got support from TechFreedom and some members of ICANN’s Non-Commercial Users Stakeholder Group (NCSG). ICANN has no business being a competition regulator and deciding whether to approve an application based on its own antitrust analysis, said TechFreedom. No domain name has market power today and it’s unlikely that any TLDs do either, it said. It said there’s no reason to think closed TLDs or the domain names within them would be any different, and it’s possible that the existence of new domain names will limit any market power that might currently exist. ICANN should “allow otherwise sufficient applicants to adopt closed registration policies and refer competition concerns to the relevant competition authorities,” said TechFreedom, a technology group that often opposes regulation.

"We oppose any attempt by ICANN to become the world’s arbiter of what constitutes a ‘generic word,'” as well as ICANN’s suggestion that it have the right to decide whether applicants for generic terms may operate in an open or closed space, wrote Internet Governance Project co-founder Milton Mueller and several other -- but not all -- NCSG members. Their position is based on a “principle commitment to the ‘permissionless innovation’ that has made the Internet a source of creativity and growth.” By seeking a managed or vertically integrated generic domain, Amazon and the others “are simply choosing a business model,” Mueller and the others said. Those companies want to use their domain space not for the sale of subdomains but to support a set of goods and services outside the domain name industry, the NCSG members wrote: “We see nothing inherently wrong with this."

Amazon’s application for .book and other closed gTLDs concerned the publishing industry. The Association of American Publishers said it opposes closed gTLDs generally and particularly Amazon’s requests. “Allowing a single private company to secure exclusive use of a string like ’.book’ -- a gTLD of vast potential application and scope -- would defeat the purposes for which new gTLDs are being authorized and is, therefore, not in the public interest,” AAP General Counsel Allan Adler wrote. The Federation of European Publishers said the fact that nine different entities have applied for .book shows the high level of interest in the gTLD “and gives an indication of the enormous potential it would offer an exclusive proprietor."

Barnes & Noble blasted its competitor’s attempt to operate .book, .read and .author gTLDs. As the dominant player in the book industry, Amazon shouldn’t be allowed to control the book TLDs, “which would enable them to control generic industry terms in a closed fashion with disastrous consequences not only for bookselling but for the American public,” said Barnes & Noble General Counsel Eugene DeFelice.

"The attack on Amazon by the publishers and by Barnes and Noble should be exposed as what it is: retribution for Amazon’s lowering prices and increasing competition in the book space,” Mueller, also a professor at Syracuse University’s School of Information Studies, told us in an email. It has nothing to do with their “feigned shock” at the use of the generic word “book,” he said. The U.S. Department of Justice accused publishers and Apple last year of colluding to raise book prices to prevent Amazon from lowering prices, and they are now “trying to strike back at Amazon in any way they can,” he said. “Am I the only one to notice that Barnes and Noble, which complains about the terrible market power one gets by registering .BOOK, is the current registrant of BOOK.COM?"

"That’s just silly,” AAP’s Adler told us. AAP’s letter to ICANN makes a very straightforward case against Amazon’s .book application based on the applicant’s stated intentions to use the gTLD solely for its own proprietary interests, he said. “Do publishers and authors need other reasons for opposition?” Adler questioned whether concerns about Internet freedom, competition and consumer choice will be taken at face value these days only when raised by those who oppose copyright interests. “This issue should be a no-brainer for anyone claiming to care about these matters,” he said.

Amazon countered that it had relied in good faith on ICANN’s rules for gTLD applications; that the Internet body shouldn’t disfavor specific business models over others; and that ICANN should let applicants innovate and develop new opportunities through expansion of gTLDs. The applicants’ guidebook only differentiates specific “community” applications, with all other “open,” “sponsored,” “closed” and “brand” requests falling under a standard application, it said. Those who want to bar only “closed” gTLDs must recognize that it will put ICANN in the position of having to make judgments on “difficult and unsettled issues” such as what terms are “generic,” and in what language, and what happens if a generic term has several meanings, it said. In addition, the use of generic terms in the second level (widget.com) generally hasn’t raised competition issues, and neither do new gTLDs, it said.

Claims that generic TLDs will harm competition are “hysterical and completely unpersuasive,” the NCSG members said. “There is no automatic linkage between possession of a generic domain and domination of the market signified by that domain.” They pointed to Barnes & Noble, which owns books.com, losing market share in the retail book market to the holder of Amazon.com because Amazon has better e-book fulfillment, infrastructure, pricing and selection.