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Can ICANN Be Challenged on Antitrust Grounds?
 

by Jamie Love
Webposted on 31 March 2000



 ICANN's proposed restrictions on use of famous names raises questions about antitrust actions involving private sector "self governance" organizations. 

ICANN is the Internet Corporation for Assigned Names and Numbers. It is a California Non-Profit organization, and is operating under a memorandum of understanding with the US Department of Commerce that might be terminated as early as this year (or might not, of course, if DOC decides to extend it). 

ICANN now controls the main root server for the Internet DNS system, the thing that permits people to use names like www.usdoj.gov or www.ftc.gov instead of numbers like 149.101.10.32 or 164.62.7.15. 

The names are organized in a series of domains. The top level domain (TLD) is the last name in the string, such as .com, .org, .gov or .uk. The next one is the second level domain, or SLD, and so on. NTIA is the third level domain in ntia.doc.gov. 

Right now there are 244 2 digit country code top level domains (ccTLDs) like .uk, .fr and .jp, and seven so called "generic" top level domains (gTLDs), out of the country code space, of which only three are widely available, .com, .net and .org. All three of the generally available gTLDs are manged by NSI, a firm that was recently sold for about $22 billion. 

While several country TLDs have tried to compete against NSI for registering domains, for the most part the action is in .com, a single TLD. IMO, this is because ccTLDs like .to, .de, .au etc are not particularly well known, intuitive or appealing. The 2 letter limit for ccTLDs is a also severe constraint. (There are a few exceptions, of course, like the .fm ccTLD which is marketed to fm radio stations, for example). 

For the public, the .com space is very overcrowded. People are paying huge sums to buy the rapidly dimminishing remaing regular names on the .com space, and people apparently pay millions for generic names. MSNBC reported today that someone paid $38 million for cool.com. I don't know if this is a bona fide offer or not, but there are surly lots of high priced sales, and many businesses, NGOs and individuals cannot buy the names they want from .com, .net or .org.

Technically, the TLD space could be huge, perhaps as large as a million TLDs with today's technology, and who knows how large later. 

While anyone can set up a computer to run a TLD registry, very few people will be able to find it, unless ICANN includes the TLD in the main root. 

Several years ago, the pre-ICANN authority proposed to create 150 new TLDs, run by 50 new NSI competitors. The main thing that stopped this was the (big) trademark lobby. There are also non-trivial but resolvable issues concerning the policies associated with new TLDs. 

Now ICANN is considering once again to expand the root, first with a 6 to 10 TLD testbest, and once that is done, perhaps a much larger expansion. We have called for the addition of thousand of new TLDs. There is much demand for new TLDs. 

Within the proposed new TLD space would be lots of types of new TLDs. Some would be .com clones, like .inc, .biz, .web, .zone, .store. .firm, .mall, etc. Others would be particular to types of activity, such as .software, .consultant, .sex, .usedcars, .flowers or .drugstore. And this is just scratching the surface. There would also be a variety of noncommercial TLDs, such as .union, .sucks, or .isnotfair, and lots of different management styles, some unrestricted and some restricted. For example, .union might be controlled by labor unions, or .usbank might be restricted to FDIC insured bands (an actual proposal by an FDIC official). 

All of this is being held up by a handful of big corporate trademark lawyers, who have generally opposed adding new commerical TLDs. These by and large are firms that already have staked out or taken various domains like att.com, mattel.com, pepsi.com, etc, and they don't want to have to fight to protect their trademark name in thousands of new TLDs. 

These trademark groups are saying they will block any new TLDs unless their demands are met. One current one is to create an open ended list of "famous" names that would be reserved on new TLDs. There are various issues in these negotations, including such items as how many uses of a "string" (use of a name) would be reserved. For example, would cokevpepsi.comparison be blocked? Would boeing.union be reserved for boeing? Would Exxon.sucks be reserved for Exxon? (There may be some openess to consider non-commercial exceptions). 

There is no legal basis for this type of reservation of famous trademarks in the US or in nearly any country, and many of the proposed reservations don't make any sense. For example, why would ford motor company be able to reserve ford.flowers, ford.plumbing or even ford.foundation (not to mention ford.modeling)? Why would one not have lotus.cars, lotus.flowers and lotus.software, one ICANN participant asked? 

The trademark lobby is seeking to "own" a string across all TLD space on the Internet, and of course, you can't blame them for trying. But they are seeking this not in a national legislature or through a treaty, but through ICANN's control of the Internet's root. 

The failure to expand the root is now beginning to have serious anticompetive consequences, because new entrants are disadvantaged, by not having very much space to find domains. This is an artificial regulatory scaricity, but largely by a private sector self regulation body. 

Would there be antitrust grounds to challenge a decision by ICANN to place restrictions of the use of famous names?