Business community rips plan to expand Internet's top domains

Plans to open up the Internet to hundreds of new generic top-level domains would be a costly nuisance that could create new opportunities for trademark infringement and consumer fraud, business and nonprofit representatives told a Senate panel.

The new TLDs, which as early as 2013 could add generic TLDs such as .softdrink alongside familiar domains such as .com and .gov, would open up a new landscape for cyber squatters and criminals, forcing legitimate owners of brands and trademarks to spend millions of dollars in defensive registration of names within the new domains, they said.

The Internet Corporation for Assigned Names and Numbers will open a two-month window for applications for the new TLDs Jan. 12.

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“It’s a big waste,” founding ICANN chairwoman Esther Dyson told the Senate Commerce, Science and Transportation Committee at a Dec. 8 hearing. She said she had changed her mind about the need for new domains since leaving ICANN in 2000. “They don’t really create any value for the economy.”

Kurt Pritz, ICANN’s senior vice president for stakeholder relations, defended the program, saying it includes robust consumer and trademark holder protections and sets a “very high bar” for new registries that would sell second-level domains in the new TLDs.

He said the committee was voicing its concerns for the program late in the game, noting that it had been “a topic of discussion and compromise for seven years.”

Federal Trade Commission Chairman Jon Leibowitz said the new domains could create new headaches for the FTC in protecting consumers from false and misleading websites. He said in an interview with The Hill that protections are inadequate and the program could be costly to consumers and companies.

Congress does not have authority to halt the expansion, but the U.S. government had input in developing the program through the Commerce Department’s National Telecommunications and Information Administration, which sits on the ICANN Government Advisory Committee.

Associate NTIA Administrator Fiona Alexander told the committee that its input helped to ensure that the program provides adequate law enforcement and consumer protection.

“The fact that not all of the GAC’s proposals were adopted as originally offered does not represent a failure of the process,” Alexander said. She said NTIA would continue to monitor the program as it develops.

ICANN, which oversees administration of the Internet’s name and addressing system, approved the expansion of the Domain Name System in June. Pritz said organizations are holding their plans for registering new generic TLDs “close to the vest,” but that ICANN is expecting more than 500 applications in the initial round. The approval process could take from nine to 20 months, so the first new TLDs probably will not begin appearing after the final dot in URLs until early 2013 at the soonest.

Applicants will pay a cost-based $185,000 fee for each proposed new domain name.

Domain names are the easy-to-read names, separated by dots,  that are used in URLs on the Web and in e-mail addresses. These are associated with numerical IP addresses for routing data over the Internet. There currently are 22 generic TLDs and about 250 country code TLDs, such as .us.

The decision by ICANN will open the Domain Names System to an unlimited number of new generic TLDs, up to 1,000 a year, in not only ASCII or Latin script, but also in any other script, such as Arabic or Chinese.

ICANN touts the program as increasing competition and choice in the Internet community. The ability to use non-Roman alphabets is intended to help prevent the Internet from fragmenting into regional networks as local populations seek a more visible presence.

Dan Jaffe of the Association of National Advertisers said an explosion of domain names would present a threat to companies that would have to protect their brands against squatters and misuse in the new domains. He said trademark protections are inadequate and that the cost of defensively registering names in the new domains to prevent misuse could quickly spin out of control.

The problem could be even worse for nonprofit organizations, said Angela Williams, general counsel for the YMCA of America. Many of these organizations have limited resources, and the cost of protecting their names online would be either a serious drain or beyond the means of most nonprofits, she added.

Pritz said protections built into the plan should allow brands to protect themselves without defensive registrations in each new TLD. Holders would be notified of someone registering a trademark as a domain, there are rapid take-down provisions, and trademark owners would be able to take action directly against an Internet registry rather than having to identify and locate the entity accused of abusing a domain name.

New Internet registries also would be required to implement in DNS Security Extensions within their TLDs to help combat threats to the Domain Name System.