Ad Industry Associations Rail Against gTLDs

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ADOTAS – You know, I got a bad feeling that next year is going to suck all around. Yeah, the ancient Mayans predicted the world’s going to end in December 2012, but now a bunch of advertising trade associations are suggesting that the end of the Internet is even closer (nigher?) — January 2012!

January 12, 2012, more precisely, is the date when the Internet Corporation for Assigned Names and Numbers (which you probably know as ICANN) will begin accepting applications for customized generic top-level domains (gTLD) in an attempt to expand the Internet registry space.

So you’re probably familiar with traditional TLDs: .com, .net, .org, etc. The idea behind gTLDs is to let companies and brands insert their trademarked names into the top-level domain — think .facebook, .target, .amazon, etc.

Back in June, ICANN’s board members voted in the proposal 12 to 1 (with two members abstaining) — as ABCNameBank’s Naseem Javen pointed out in an Adotas column yesterday, there was some fluttering in the media about the move following the vote, but suddenly association outcry is piercingly loud. Likely, it’s to tag the discontent to the launch of an ICANN page with detailed information about the gTLD program.

In particular, the associations are mad about the lack of “bottom-up” participation from the global Internet community, with the Association of National Advertisers (ANA) citing “insufficient research and guidance from expert authorities” and “inadequate oversight by the U.S. Department of Commerce.” Basically the association is mocking ICANN’s claim that “Representatives from a wide variety of stakeholders—governments, individuals, civil society, business and intellectual property constituencies, and the technology community—were engaged in discussions for more than 18 months.”

In addition, there are rumors of a “cyberspace land rush” — Law.com makes a humorous comparison to the Oklahoma Land Rush of 1889, when 50,000 would-be Oklahoman land owners raced to grab 12,000 plots. The fear here is an epidemic of cyber squatting — people buying up prime domain names for cheap and then reselling them to brands for ridiculous amounts. This is still a popular practice, with many squatters these days buying up mispellings of company names to pick up typos entered in the address bar. (I imagine they’d do the same for gTLDs.)

But the real issue here? Cash: The Interactive Advertising Bureau (IAB) suggests it’s unfair and costly burden to brands and marketers, and could cause “incalculable financial damage.” 4A President and CEO Nancy Hill added, “These changes would cost brand owners billions of dollars, severely, if not irreparably, diluting the value of trusted and respected brand names, as well as abrogate the good work 4A’s members have done on behalf of their clients.”

It’s arguable that major brands are going to be forced to buy up gTLDs with their trademarks — I’m not saying ICANN will break their kneecaps if they don’t, but brands don’t want such an image-affecting tool out of their control.

However, the FAQ section of ICANN’s gTLD section suggests that not just anyone can purchase one of these custom top-level domains — would-be cybersquatters may be SOL. From section 3.16:

First, an objection-based process will enable rights holders to demonstrate that a proposed gTLD would infringe their legal rights. In the event that the legal rights objection is successful the application will not proceed. Second, applicants for new gTLDs will be required to describe in their applications the rights protection mechanism, which must meet certain minimum standards as described in the Applicant Guidebook, they propose for second-level registrations. Third, all new gTLDs must ensure that second-level registrations are subject to ICANN’s Uniform Domain Name Dispute Resolution Policy (UDRP), a process that has worked well to protect rights for many years.

OK, so maybe the Internet won’t come crumbling to the ground come January 12, 2012 — ICANN is reportedly expecting between 300 and 1,000 applications — but it’s easy to see why the advertising industry associations are vociferously pleading for ICANN to withdrawal the gTLD proposal. Where do you fall in the debate?

Here are some choice quotes from industry reps:

IAB CEO and President Randall Rothenberg: “ICANN’s potentially momentous change seems to have been made in a top-down star chamber. There appears to have been no economic impact research, no full and open stakeholder discussions, and little concern for the delicate balance of the Internet ecosystem. This could be disastrous for the media brand owners we represent and the brand owners with which they work. We hope that ICANN will reconsider both this ill-considered decision and the process by which it was reached.”

ANA President and CEO Bob Liodice: “By introducing confusion into the marketplace and increasing the likelihood of cybersquatting and other malicious conduct, the ICANN top-level domain program diminishes the power of trademarks to serve as strong, accurate and reliable symbols of source and quality in the marketplace. Brand confusion, dilution and other abuses also pose risks of cyber predator harms, consumer privacy violations, identity theft and cyber security breaches. The decision to go forward with the program also violates sound public policy and contravenes ICANN’s Code of Conduct and its undertakings with the United States Department of Commerce.”

AAAA President and CEO Nancy Hill: “All marketers share the goal of a stable global marketplace, served by an Internet system that consumers can rely on to accurately reflect the quality and history of a product or service. ICANN’s actions would remove that trust and place consumers at a significant disadvantage in making marketplace choices and decisions. We join with advertisers, manufacturers, media and consumer groups in strongly urging ICANN to reconsider this ill-advised and harmful proposal.”

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