Agency asserts interest in trademark protections for Internet’s largest domain name registry

According to media sources, the National Telecommunications and Information Administration (NTIA) wrote to Verisign last Friday, objecting to the company’s plan to auction o.com to the highest bidder. The planned release for o.com—described by the Second Amendment to the .com Registry Agreement and intended as a pilot for the remaining reserved single-character .com names—involved an opaque consideration process that ignored community input and set aside hard-won trademark protections developed by stakeholders in order to maximize dollars earmarked for an unidentified cadre of non-profit organizations.

The two-page letter asserts that:

1. NTIA retains rights pertaining to single-character .com names stemming from the fact that it was the U.S. Government which required single-character names at the second-level to be reserved from initial registration in 1993;
2. the release of o.com, and presumably the other remaining reserved .com single-character names, requires NTIA approval; and,
3. such approval is likely to be withheld unless the release procedure incorporates “policies, procedures, and protections used for all domain names.”

This last point vindicates the position of the Intellectual Property constituency (IPC) and other stakeholders that specifically called for the implementation of the Trademark Clearinghouse and Sunrise Period mechanisms that were created to protect brand owners and trademark registrants. The omission of these hard-won protections can’t be considered an oversight because it was quite deliberate. The views of the IPC and others were offered during yet another example of the kangaroo court-style of public comment period that seems to be ICANN’s new normal and where community input is solicited only to fall upon deaf ears before hitting the circular file.

In this case, ICANN’s board dismissed intellectual property rights protections as inapplicable because the .com Registry Agreement is, among other things, a decaying relic from prehistoric times that predates the development of modern safeguards for intellectual property rights online. ICANN’s board also cited as precedent the release of .biz (2008), .info (2010), and .org (2011) single-character reserved names without a sunrise period—it’s a little surprising that the board seems to have forgotten that sunrise periods didn’t exist until 2013. But it’s difficult to be too surprised considering that when asked about the vote to approve the o.com auction at ICANN’s Kobe meeting, a number of board members didn’t recall the issue being raised in the first place, let alone voted on.

Given the propensity of Verisign and ICANN to seek absolution in the loopholes of an obsolete legacy agreement, stakeholders might have a brighter future if they follow their lead and stop asking for what isn’t in the .com Registry Agreement and get laser-focused on what is—particularly those elements that a federal appellate ruling says “unlawfully restrain trade.” In the meantime, NTIA’s timely intervention reinforces the position taken by the IPC and others that the release of o.com—along with the other remaining single-character .com names—must be subject to the same procedures, policies and protections as every other newly available domain name.

NTIA’s concerns mostly pertain to the charitable contributions, possibly constituting a price that exceeds what is currently allowed by the Cooperative Agreement and that this would require explicit NTIA approval. The agency further questioned whether the compensation for auction vendors would also exceed the allowable wholesale price for .com domain names.

The gravity of the letter is greatly expanded by considering that it was signed and sent last Friday by NTIA’s then-acting administrator, Adam Candeub, who has since been tapped by the White House for a new role as Deputy Associate Attorney General —a Justice Department job which oversees the Antitrust Division, among other things. It is counter-intuitive to assume that he would abandon such recently demonstrated interest in these issues after being elevated to a role that offers such greatly expanded opportunities for addressing them.

Another factor is the potentially shortened timeframe to effect solutions. January 20th is likely an important inflection point for Mr. Candeub and, thus, should be seen similarly for Verisign and ICANN as well. Ignoring NTIA’s letter or trying to run out the clock would be myopic and risks drawing greater scrutiny from DOJ and others that could carry over into the next administration—which isn’t far-fetched considering the president-elect was Vice President when the 2012 price cap was imposed. Any expanded inquiry would necessarily seek to know the motives of two organizations that, on paper at least, have no interest, rights, or standing for these single-character names beyond the maximum allowable price of $7.85—in essence, it would become necessary to determine why ICANN and Verisign accepted such rapidly ballooning risk by seeking so mightily to deny the rights of others for something that they themselves hold no rights to whatsoever?

Albert Einstein once said that “problems cannot be solved with the same thinking that created them.” However, given these evolving circumstances, it doesn’t take a rocket scientist to know that hoping intransigence will result in an outcome other than a full competition review of .com—a long-overdue follow-up to DOJ’s 2012 analysis which has already been requested by U.S. Senators Ted Cruz and Mike Lee—is putting a lot of shareholder value at risk for a gamble that, in retrospect, will be seen as arbitrary and capricious.

Besides—hope is not a strategy.