ICANN releases two new papers from Professor Dennis Carlton regarding the economic consequences of releasing new top level domain names.
Surprise! When you pay the same person to evaluate critical comments about his original work, he decides that his original work was correct.
That’s what happened when Internet Corporation for Assigned Names and Numbers (ICANN) paid Professor Dennis Carlton to evaluate (defend) critiques of his original papers. ICANN just released two new papers by Carlton that refute critiques of his original reports.
Here are some of the more interesting tidbits:
1. Carlton says the report that ICANN’s board called for in 2006 to study the competitive advantages of new TLDs isn’t really necessary. As it turns out, it doesn’t really matter if new TLDs compete with incumbent TLDs such as .com, says Carlton.
2. Carlton reiterates his claims that price caps are not necessary on new top level domain names. He even addresses the concerns that incumbent registries could claim “equitable treatment” clauses in their contracts to remove their price caps. Carlton says ICANN has assured him there’s nothing to worry about:
We understand from ICANN that there is no basis for this concern. The language in this clause does not require identical treatment among all registries and recognizes that differences across ICANN contracts with different registries can be “justified by substantial and reasonable cause.â€ ICANN’s contracts with existing TLDs recognize that different practices may be appropriate for different registries and allow ICANN latitude to implement different procedures. I am aware of no statement either by ICANN or the Commerce Department favoring the elimination of price caps specified in existing registry contracts.
Unfortunately, Carlton ignores the history of the existing .com registry contract between VeriSign and ICANN (which is currently the subject of an antitrust lawsuit). VeriSign abused its position by introducing SiteFinder, which resulted in lawsuits between VeriSign and ICANN. To settle the suit, ICANN granted a no-bid contract to VeriSign for .com domain names that included 7% annual price hikes. So to assume that ICANN would just ‘say no’ to VeriSign about removing price caps and go on its merry way is preposterous. Furthermore, it may be in ICANN’s interests (but not domain registrants’) to agree to hike .com fees in return for a greater cut of VeriSign’s revenues.
Carlton also addresses price caps in regards to trademark holders having to pay a lot to register their trademark domains with tiered pricing (e.g. Google being charged extra because it has a big name). He says this can be handled through ICANN’s intellectual property protection mechanism. The problem is, Google could “protect” a domain by getting it through UDRP, only to have to pay the registry $10,000 a year to keep it registered.
3. On Page 13, Carlton goes through examples of innovations that could be created using new TLDs. One example is a financial services domain that provides secure transactions. But this can be achieved with existing TLDs and laws.
4. In a claim that is sure to raise the ire of trademark owners, Carlton claims that registering typos of your trademarks is not defensive. Instead it’s productive, since it funnels traffic to your main web site. I guess it’s only productive if you don’t let the domains resolve.
There’s a lot more than that. You can read the reports and submit comments. Just be advised that if you make a good argument, ICANN may use more of your domain registration fees to pay Carlton to defend them.
Reece Berg says
This whole thing disgusts me to be honest…
So if I put in hundreds of hours developing a domain, all of the sudden they’re going to make me pay more to keep it? How can this possibly not be illegal? Extorting money out of Google because they know Google can afford to pay? Price discrimination at it’s finest right there.. Carlton seems perfectly happy to prostitute himself for a few bucks, so I couldn’t care less about his opinion.
I don’t know why ICANN even pretends they’re listening to others — it’s clear they’ve already made up their mind on these new TLDs and know are just trying to convince silly domainers and others who actually think ICANN is listening to what they say.
To be honest, I think the only way domainers have a chance of getting ICANN to change it’s plans would be to start emailing large corporations and explaining to them what ICANN plans on doing. As little as $10,000/year may sound like for a company like Google or Microsoft, with many of them owning hundreds and even thousands of domains, it’s not like this is going to cost them $10,000 per year — more like $10MM per year if their renewal fees were to get hiked.
What are their options — let cybersquatters register Microsoft/Google typos because it’s not profitable to own them when you’re paying $10,000 to renew them? Doesn’t that go against the whole purpose ICANN was setup for? Complete joke.. Now they just have to convince the fools who have a say in this decision that it’s in their best interest to go along with it.
If we did not all know ICANN was crooked, we’d think they have the intellect of five year olds judging from the way they run ICANN.
Someday something nasty is going to surface about bribes or favors b/c it is absolutely impossible to act this way without one’s interests being aligned to a some third party. Otherwise, there is no reason for Paul Twomey and his constituents to act so lackadaisical and unmoved domain owner’s concerns.
Then again, maybe it is just Paul Twomey’s $800,000 a year salary from a non-profit organization….which is ICANN….that keeps Paul’s interests in line with Paul’s interests.
Domain Investor says
Reece, if domainers started contacting large corporations they wouldn’t believe us.
Johnny, you made an interesting point about possibly one day a rumor or fact arising about bribery at Icann. Maybe, it is happening. Maybe, not.
I don’t care how much Paul T. was making if I felt he was working for the common good of ALL stakeholders.
But, I feel Icann cares about one thing – themselves.
Andrew Allemann says
@ Domain Investor – actually, Verizon recently picked up on this tiered pricing thing and mentioned it in its last round of comments. When I interviewed them a couple months ago they said they had just become aware of it. So reaching out to intellectual property people at these firms might help.
Andrew Allemann says
Is it just me, or did PCWorld just call Carlton a “cheerleader”?
Reece Berg says
Andrew, I just came across that article myself LOL — was coming back hear to send you a link 🙂
Philip Corwin says
Back when I was growing up Jimmy Breslin wrote a comic novel about organized crime titled “The Gang That Couldn’t Shoot Straight”. At moments like this you want to recycle that title for a study of ICANN.
Here we have the whole U.S.-ICANN relationship up for review, with a broad range of interests saying in unison that ICANN has never produced a credible economic analysis to justify the possibility of unlimited numbers of new gTLDs, and they respond to that criticism by paying the same individual (with funds that originate from registrants) to issue an updated paper that deflects all criticism and asserts he was right the first time around. And they announce these self-serving papers as “Final Reports”, as if this should end all further discussion. Clueless doesn’t even begin to describe such behavior!
For the record, ICA has consistently voiced strong opposition to differential pricing between domains at the same registry because permitting that would be to authorize registry operators to tax the economic success of registrants and their websites. Registries are monopoly data service providers and deserve a reasonable return for their work, but must not be granted the power to extort.