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    New gTLDs Weird Doings at the FTC: Shoddy 'Consumer Alert' Appears, Vanishes
    posted by michael on Thursday May 17 2001, @06:23PM

    Now this is passing strange. First the Federal Trade Commission (FTC) issues a pro-ICANN, anti-alternate root, consumer advisory entitled What's Dot and What's Not: Domain Name Registration Scams that is partisan and inaccurate. Then the power goes out for most of a day at the FTC (since the FTC is in DC and not California, I assume this is not part of the new energy crisis), and their web site is down. Then the power comes back, followed by the web site, and the advisory is there...but then suddenly it's gone. The rest of the FTC e-commerce consumer advisories are still there, and there's even a listing for the alert on the index page.

    Well, since the FTC won't host it, ICANNWatch will. With some pointed comments. UPDATE: Friday afternoon, the alert at http://www.ftc.gov/bcp/conline/pubs/alerts/domainalrt.htm brings up the text of the previous, much shorter and more accurate FTC warning issued in December 2000. The missing alert is still missing...



    Annotated Text of the Missing FTC "Consumer Alert"

    My comments in red

    FTC Consumer Alert!

    Hot Dot? Not. Domain Name Registration Scams

    May 2001

    What's in a name? Plenty, if you want to register a website. New scams are targeting would-be website owners by offering the opportunity to pre-register names in new top level domains, and offering access to unofficial top level domain names. Domain names, such as "ftc.gov," are the unique terms that enable Internet users to locate a specific website. The top level domain is the final extension, such as ".com" or ".org." Wait a minute. Why is offering access to so-called "unofficial" TLDs a "scam"? Is new.net a "scam"? Are the ICANN TLDs "official"? If so, does the US government now accept that decisions about them are subject to US Constitution and statutes regulating official activity?

    According to the Federal Trade Commission (FTC), the nation's consumer protection agency, scam artists are taking advantage of the news that the Internet Corporation for Assigned Names and Numbers (ICANN) is making new top level domains available to the public. The new top level domains are .aero, .biz, .coop, .info, .museum, .name, and .pro. Now, we have some more trouble. First, none of these names is official yet, since none have been approved by the Department of Commerce. Second this paragraph fails to distinguish between the proposed .biz to be operated by Affilias and the actual, existing (if rather tiny), .biz, run by Leah Gallagos.

    The FTC says consumers are getting unsolicited faxes and emails that offer a chance at a name in a new top level domain, for a fee, as soon as it becomes available. Some registration services are guaranteeing new top level domain names, Yes, ICANNWatch recently discussed press releases from ICANN and Neustar promising new TLDs in advance of federal approval promising preferential treatment in the registration process, Yet, preferential approval for big businesses and other trademark holders is the essence of the 'sunrise' proposal being used by Affilias in its .info proposal, while the milder preferences for trademark owners offered by Neulevel in its .biz plan are being attacked by big trademark interests as failing to give them sufficient preferences or taking unauthorized pre-registrations for extensions like ...coop. Additionally, some operators are offering unapproved extensions, such as .web. The suggestion that there is anything fraudulent about Chris Ambler's .web registry, which has as far as I know has always been open about its absence from the ICANN root appears to me to be utterly unfounded. These offers and claims are misleading.Actually, it's this paragraph by the FTC that is misleading.

    The organizations that are responsible for assigning the .biz and ...info domain names have adopted procedures to assure that access to new top level domains is done fairly.I beg to differ. Why is it fair to give preferential access to .info to businesses with trademarks, and not to individuals, non-profits, churches, activists and others who have equally legitimate commercial and non-commercial interests in our shared language? All requests for .biz domains to ICANN-accredited registrars will be combined and randomly selected. Again, this leaves out the 'sunrise' aspect -- the time when some are more equal than others. All requests for .info domains will be considered in a round-robin selection process. That is, only one randomly selected registration request from each of the ICANN-accredited registrars will be processed per round. It is likely that similar procedures will be adopted for the .name and .pro domains.

    The National Cooperative Business Association, the Societe Internationale de Telecommunications Aeronautiques SC, and the Museum Domain Management Association will establish the eligibility and registration procedures for the .coop, .aero, and .museum domains respectively. No other organization or business is authorized to set eligibility requirements for these domains.

    The FTC advises consumers to protect themselves by:

    1.avoiding any domain name registration service that guarantees preferential treatment in the assignment of new top level domain names. Stay away from services that claim to increase your chances at getting a new top level domain. Hmmm. The only organization I know of that has every claimed to be able to affect my chances of getting a top level domain is ICANN. They wanted $50,000 for it. Is the FTC saying that was a scam? If so, it would hardly be the first to suggest that. Alas, the FTC probably means second level domain here. But wouldn't that suggest that this 'sunrise' thing is a scam?

    2.registering only in approved top level domains (.com, .net, .org, ...aero, .biz, .coop, .info, .museum, .name, and .pro). Domain names with unapproved extensions are not readily found in routine Internet searches nor can email be directed to those sites. Here is where the FTC really loses its grip. Recall that as a legal matter, from the average Internet user's point of view, the choice to patronize the DoC-ICANN-DNS is a private choice. Users who point their machines to it do not do so under any legal compulsion. As regards the individual's decision where to resolve DNS queries, the DoC-ICANN root and an alternate root are legal equals although the DoC- ICANN root has an overwhelmingly dominant market share. To understand just how outrageous this statement of the FTC's is, just imagine that four or five years ago the FTC issued a statement warning consumers not to buy any unix-based word processors because most documents are in Word format, and unix-based programs produce TeX and .ps files that Microsoft Word cannot read.

    3.reading the disclosures and fine print before paying any pre-registration fees.

    4.avoiding doing business with people who send unsolicited faxes and emails - regardless of the offer. Unsolicited faxes are illegal.

    5.dealing only with ICANN-approved registrars. The ICANN website, www.icann.org, has a list of registrars. Again, the FTC takes sides, against legal, legitimate, if somewhat marginal (at present) businesses. Non-ICANN registrars selling entries into alternate roots who are clear about what they are doing are engaged in a fully lawful activity. Those who fail to disclose that their names won't resolve on the majority of users' computers are indeed running a scam, but it is odious for the FTC to lump the two groups together. If that wasn't enough, it stifles competition.

    The FTC works for the consumer to prevent fraudulent, deceptive and unfair business practices in the marketplace and to provide information to help consumers spot, stop and avoid them. To file a complaint, or to get free information on any of 150 consumer topics, call toll-free, 1-877-FTC-HELP (1-877-382-4357), or use the online complaint form. The FTC enters Internet, telemarketing, identity theft and other fraud-related complaints into Consumer Sentinel, a secure, online database available to hundreds of civil and criminal law enforcement agencies U.S. and abroad. FEDERAL TRADE COMMISSION FOR THE CONSUMER 1-877-FTC-HELP www.ftc.gov. I hope this is not a representative sample of the FTC's work on e-commerce issues.

    [To respond, or start a new comment thread, click the "Send Your Comment" button in the yellow box to the right.]

     
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    Weird Doings at the FTC: Shoddy 'Consumer Alert' Appears, Vanishes | Log in/Create an Account | Top | 8 comments | Search Discussion
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    Re: Weird Doings at the FTC: Shoddy 'Consumer Aler
    by Grumpy on Friday May 18 2001, @04:44AM (#606)
    User #2759 Info
    No offense, but I disagree with the characterization of the .biz start-up plan as a "sunrise." Neulevel goes to great pains to emphasize that filing a SIPN claim guarantees NOTHING to the claimant beyond notice if anyone (including the claimant) applies to register a .biz domain name matching the claimed string. It's a chance to head off a lot of trademark fights before they hit the UDRP (or some mutated UDRP specific to .biz) or the courts... "knowledge is power."

    By contrast, Afilias is giving away huge chunks of real estate to trademark owners. That's far more troubling than Neulevel's attempt to reduce overall transaction costs.

    As for New.Net and the non-DoC roots, the average Internet user (i.e. NOT a regular on this web site) is not likely to understand how to reconfigure their DNS settings to view the other roots. If they're AOL users, they may not know how to install the New.Net plug-in. And those users need to know that they can't receive e-mail through a New.Net .shop domain name.

    The FTC notice appears excessive, and I would guess that they pulled it in order to scale back some of the claims and warnings. (I agree that any slams, implied or otherwise, against IOD are misplaced.) The concept behind the message, however, remains valid.

    - Grumpy
    [ Reply to This | Parent ]
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    Re: Weird Doings at the FTC: Shoddy 'Consumer Aler
    by tbyfield (reversethis-{moc.xinap} {ta} {dleifybt}) on Friday May 18 2001, @04:56AM (#607)
    User #44 Info
    And let us not forget the curious past of this "warning" before the FTC pulled it yesterday.

    First, the remarkable 29 September 2000 warning, "Names Council Warns Pre-Registration of Speculative New Domain Names Is Premature." Why exactly the NC, then chaired by Ken Stubbs, was behind this warning is anyone's guess; they hadn't done anything like that before.

    Then, on 16 November 2000, the FTC issued a "Consumer Alert" about "Domain Name Registration Scams" (ICANN's announcement page still dead-links to it as of this writing). A cached Google copy of a page at the same URL incudes not 5 long warnings, like the one Michael annotated above, but merely 3 terse ones:

    1. 1. Avoiding any domain name pre-registration service that guarantees particular top level domain names or preferential treatment in the assignment of new top level domain names.
    2. 2. Avoiding doing business with people who send unsolicited faxes - regardless of the offer. Unsolicited faxes are illegal.
    3. 3. Staying on top of the news about top level domain names at the ICANN website, www.icann.org.

    This iteration seemed mostly to be a response to Regland, a subject in which ICANN VP/GC allegedly took a keen interest in (e.g., shouting at Regland to change the wording from "reserve" to "pre-register," shouting at registrars not to cooperate with Regland, and so on). For details of that odd episode, see my roving_reporter column here and here.

    Sometime thereafter, DomainBank -- an Afilias-borg component in which then-NC Chair Stubbs had (he may still have) an interest -- set itself apart from the Afilias pack by making a lot of hay about these warnings (see the r_r here).

    What I'd like to know is:

    • How many iterations of this FTC warning were published?
    • What events prompted the FTC to change the warning's text?
    • Whoever drafted the various iterations was clearly clueless; who was s/he talking to?
    [ Reply to This | Parent ]
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