This week ICANN held a public consultation in Washington, D.C., where ICANN’s President’s Strategy Committee (PSC) solicited remarks from a packed audience of intellectual property (IP) lawyers, domain name registrars and other Internet stakeholders on how the organization can improve institutional confidence. An audio cast of the meeting and the PSC’s presentation is available on ICANN’s Web site.

No surprise, ICANN’s decision to add new generic top-level domains (gTLDs) to the Internet was on many participants’ minds. Given the high turnout and fervor of the group, time to speak was limited so I had to summarize my points during the meeting; the full text of my prepared remarks is provided below. The crowd’s supportive response to my suggestions confirmed how ICANN needs to work more closely with the global business community to craft Internet policy that improves the overall security of the Internet.

My name is Margie Milam, and I am the General Counsel of MarkMonitor, an ICANN accredited registrar and provider of brand protection services. MarkMonitor is the world’s largest corporate domain name registrar, providing services to over 50 Fortune 100 companies, as well as 5 of the top 10 most popular internet sites in the world. Through our relationship with these customers, we understand how ICANN policy affects their ability to protect their brands and customers from abuse such as phishing, malware, identity theft, cybersquatting, and counterfeiting.

I would like to focus my comments on how to improve institutional confidence in ICANN as it tries to become more independent. Much of the criticism regarding ICANN from the corporate community arises from the perception that ICANN policy processes are unduly swayed by parties that are able to regularly attend ICANN meetings, particularly the contracting parties, namely the registrars and registries. Because very few corporations are able to send representatives to ICANN to advocate for business and consumer friendly policies, new policies tend to be spearheaded by the contracting parties with little attention to the concerns of the larger business and consumer communities.

ICANN needs to recognize that the corporate community is frustrated by the rampant abuse of the domain registration system over the last few years under ICANN’s watch. From their viewpoint, ICANN has been slow to respond to abuse, and it appears that very few non-compliant parties are held accountable. The sudden rise of domain tasting and phishing, and WHOIS related abuse, are just a few examples. For statistics on these abuses, I invite you to review the MarkMonitor Brandjacking Index, published in September, that provides insight on how the world’s largest brands are targeted by cybersquatters or “brandjackers” as we refer to them.

The perception from our clients is that this problem will get worse with the introduction of new gTLDs. This topic is a source of aggravation for our client base. On July 31, 2008, MarkMonitor held a webinar entitled “New gTLDs: Perspectives from ICANN”, featuring Karla Valente, the new gTLD Program Director from ICANN. Much to our surprise, over 500 registrants signed up for this event. We polled the participants and learned that approximately 72% of the attendees expressed some level of fear or uncertainty regarding the process, with only 28% viewing the introduction of new top level domains as an opportunity. Of the companies that intended to apply for new gTLDs, over 60% intended to do so for defensive reasons or to prevent brand abuse. Only a small subset of our participants saw the new gTLD process as a way to rebrand and to take full advantage of the imminent gTLD opportunity which could be the next generation of the Internet. We believe that this subset will grow as companies see the branding potential of the new gTLDs but ICANN needs to work more closely with the business community to realize that potential.

We believe that institutional confidence in ICANN may suffer under the new gTLD process as currently proposed. There are insufficient mechanisms to protect rights holders (large and small) from abuse by deep-pocketed interests who seek to abuse this process both during the application period and beyond.

Though many rights holders see the advantages of applying for their own top level domain eventually, they may only be able to capitalize on the benefits of that top level domain later. Therefore, the immediate result will be more applications from the corporate community motivated by fear of brand abuse. To the extent that this occurs, the process will reflect badly on ICANN, since this will be viewed as a type of “blackmail” by the companies that are forced to apply out of fear. On the other hand, if the new gTLD process results in use by companies and individuals who truly desire to take advantage of a new way to communicate, ICANN will surely benefit.

The new gTLD process is just one example of how ICANN policy can adversely affect the business community. ICANN can improve its standing in the global business community and increase institutional confidence if it finds a way to increase the level of participation from the business community in its policy making initiatives.