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July 30, 2012 Articles

ICANN Struggles to Manage its Expansion of the Web

ICANN still has a lot of work to do to fix technical malfunctions and to correct procedural oversights that look to hamper the implementation of the gTLD program.

By Stephen Flug

The Internet Corporation for Assigned Names and Numbers (ICANN) finally closed the first phase of its generic Top-Level Domains (gTLDs) expansion program on May 30 and released the results of this initial phase on June 13. The closing of the application window and information release date were delayed from the original expected deadlines of April 12 and May 1 after a technical glitch that allowed some applicants to view the application data of other program participants was discovered. This program aims to drastically increase the universe of gTLDs, which are roots such as .com, .gov, and .org used to indicate the character of the owner of an address or the intended purpose of the site located there. ICANN's program was expected to greatly expand the 22 existing gTLDs and 225 country-specific domain names by allowing a broad range of parties, including businesses, cities, and industry groups, to register their own unique domain names.

Exceeding even these high initial expectations, ICANN received applications for 1,410 new gTLDs from 1,930 different candidates, including a total of 751 disputed gTLDs being claimed by 231 unique applicants. For example, ICANN received 13 different applications for the .app string, including submissions by both Google and Amazon. In addition, there were 116 applications for non-Latin gTLDs, many of which relate to translations of .com and .net, and 84 applications for "community" strings such as .halal and .ngo. Many leading companies participated in this first round, as demonstrated by Google's 101 submissions and Apple's sole application for .apple, but other internet stalwarts, such as Facebook, were conspicuously missing from the submission list. Also included among the applicant pool were startup companies created with the sole goal of building a portfolio of gTLDs through this process. Donuts Inc., for example, raised $100 million from investors and applied for 307 gTLDs, including .llc, .baseball, .app, and .business, to name a few.

ICANN released a new application guidebook on June 4 detailing the updated review process and dispute-resolution mechanisms, although actual deadlines are no longer clear. The review process will begin with initial evaluations [PDF] in which third-party evaluators will consider a variety of issues, including the applicant's intended implementation of the gTLD string and its feasibility; any similarities to existing domain names or other requested gTLDs; whether applicants have demonstrated appropriate technical standards and financial resources; and whether requested strings are appropriate for the registrant. In addition, the review process is currently undergoing a public-comment phase that runs 60 days from the June 13 revelation date, during which anyone may raise concerns similar to those being reviewed by the evaluators. After the initial evaluation, a variety of factors determine whether the application may be deemed ineligible or whether it may proceed along one or more of four modules [PDF]: the Transition to Delegation Module; the Extended Evaluation Module; the Objection and Dispute Resolution Module; and the String Contention Module.

If an application passes the initial evaluation tests and is not forced to advance under one of the other three modules detailed below, it will proceed to the Transition to Delegation Process [PDF], which can last up to nine months and generally deals with sorting out administrative and contracting issues. This module represents the final step in the gTLD expansion program prior to approval.

Those that fail the initial evaluation will proceed to the Extended Evaluation [PDF] module, during which an applicant can clear up specific types of issues. This module will mainly deal with operational concerns, and applicants may be required to pay a $50,000 fee to sort out these technical issues. The Extended Evaluation may last five months, and applicants that clear this module can then proceed with the Transition to Delegation Process.

An applicant may also fail the initial evaluation due to four specific types of objections—confusion with an existing or applied-for gTLD (String Confusion); Legal Rights infringements; public-interest or morality objections (Limited Public Interest); and community-based objections against a specifically targeted string (Community)—in which case the applicant will be placed in the Objection and Dispute Resolution [PDF] module. Parties with standing, which generally means existing TLD operators, as well as other applicants requesting the string for String Confusion claims, potentially infringed rights holders for Legal Rights claims, all reasonable objectors for Limited Public Interest claims, and established institutions for Community claims, have approximately seven months from the June 13 disclosure date to file a formal claim with a dispute resolution service provider (DRSP). DRSPs are selected from among the International Centre for Dispute Resolution, the World Intellectual Property Organization, and the International Center of Expertise of the International Chamber of Commerce, depending on the particular type of objection being raised. Once the filing window closes, applicants will be able to file responses to claims against them, and the selected DRSP will hear the dispute through a panel of appointed experts. Both parties involved in a dispute will be required to pay an up-front administrative fee that ranges from $5,000 to $10,000. At this point, applications will either be denied, approved and sent to the Transition to Delegation Process module, or be referred to the fourth possible module, String Contention [PDF], for additional review.

The String Contention module represents the final hurdle applicants may face prior to the Transition to Delegation Process contracting phase. While many applications currently overlap, some of these disputes may be weeded out or rendered moot while proceeding through one or more of the earlier modules. The conflicts that remain will undergo a dual-track review, depending on whether any of the applicants are designated as a community-based institution. If both applicants are private entities, the gTLD dispute will be settled via an auction, with the highest bidder winning the rights to the string. If at least one of the contending applicants is a community organization and has declared a community priority, ICANN will appoint a community priority panel to review and score this claimed priority against four specific criteria using a detailed evaluation system. Following this evaluation, either the community applicant will be awarded the gTLD or the panel will determine that no clear priority exists, pushing the dispute into the auction phase. Proceeds from the auction process will be remitted to ICANN, and, while losing bidders will not be required to pay their auction bids, they will notably not receive a refund of their application fees. Following this final module, an applicant who either has been given community priority or has won a private auction will then enter the nine-month Transition to Delegation Process and be on the same track as the other approved applicants. All other applicants, having lost in the String Contention module, will have their applications rejected.

In addition to the technical error that delayed the application finalization deadline, other significant systemic errors persist as well. ICANN's initial application review mechanism was only built to handle the processing of roughly 500 applications at a time, with an estimated five-month evaluation period for each batch of applications. To address timing issues, ICANN created a "digital archery" timestamp system to allow for an efficient and equitable grouping of these applications. This system was to determine the phasing of application review based on the smallest variance between an applicant's targeted and recorded time through its time-stamp system, while giving consideration for geographic diversity and the joint grouping of contested strings.

Due to the ineffective operation of the time-stamp system, however, the much-criticized digital archery program has been suspended, and ICANN has yet to decide on a suitable replacement process to allocate applications into batches. This has caused much confusion, as applicants are now unclear on how the evaluation process will be determined and what effects this will have on the expected duration of the evaluation window. ICANN has stated that it is still proceeding with the initial evaluation phase. Cherine Chalaby, chair of the gTLD program committee, has stated that ICANN is working on a new road map for the review process, while ICANN's chairman of the board, Steve Crocker, has confirmed that there will not be any refunds of the $5,000 registration fee or $185,000 official application fee.

ICANN's new gTLD program, which was hotly debated and criticized by both experts in the field and business associations, generally exceeded all expectations of participation for the first expansionary phase. Despite this success, ICANN still has much work to do in fixing technical malfunctions and correcting procedural oversights that look to hamper the implementation of this program, at least in the near term.

Keywords: litigation, intellectual property, ICANN, gTLD, internet, copyright, infringement, cybersquatting, domain names, dispute resolution

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