[bc-gnso] New gTLDs – Final Reports Available on Competition and Pricing

[BC Secretariat]

http://www.icann.org/en/announcements/announcement-06jun09-en.htm

New gTLDs – Final Reports Available on Competition and Pricing
6 June 2009

ICANN posted today two reports relating to the introduction of new gTLDs, 
both by Dr. Dennis Carlton:
Report Of Dennis Carlton Regarding ICANN's Proposed Mechanism for 
Introducing New gTLDs [PDF, 628K], and
Comments on Michael Kende's Assessment of Preliminary Reports on Competition 
and Pricing [PDF, 52K]

Both reports are briefly summarized below. A public comment forum has been 
opened on these preliminary reports prepared by Professor Carlton for 45 
days, until 20 July 2009. Post comments to 
competition-pricing-final at icann.org and view comments at 
http://forum.icann.org/lists/competition-pricing-final.
Summary: Report of Dennis Carlton Regarding ICANN's Proposed Mechanism for 
Introducing New gTLDs

This report combines and updates Dennis Carlton's two preliminary reports 
from March 2009 that address ICANN's proposed mechanism for introducing new 
gTLDs. This paper analyzes, from an economic perspective, costs and benefits 
of ICANN's proposed introduction of new generic top level domain names 
(gTLDs) and addresses concerns raised by the Department of Justice and other 
parties about the ICANN proposal.
The paper concludes that ICANN's proposed framework for introducing new 
gTLDs is likely to facilitate entry and benefit consumers by expanding 
output, lowering price and increasing innovation. Even if new gTLDs do not 
compete with .com and the other major TLDs for existing registrants, it is 
likely that consumers would nonetheless realize significant benefits due to 
increased competition for new registrants and increased product choice. 
Thus, evaluation of ICANN's proposal does not depend on addressing the 
extent of competition between existing TLDs, a question posed by the ICANN 
Board in 2006.

While a variety of commenters have expressed concerns that the introduction 
of gTLDs will require trademark holders to undertake defensive 
registrations, alternative mechanisms for addressing such concerns are 
available. Several proposals are currently being reviewed by ICANN which may 
address these concerns while precluding the consumer harm that is likely to 
result from the draconian remedy of restricting entry of new gTLDs. The 
ability of ICANN to protect trademark holders through dispute resolution 
mechanisms also implies that price caps on new gTLDs are not necessary to 
protect trademark holders.
Summary: Comments on Michael Kende's Assessment of Preliminary Reports on 
Competition and Pricing

This paper responds to the report submitted on April 17, 2009 by Dr. Michael 
Kende, prepared on behalf of AT&T entitled "Assessment of ICANN Preliminary 
Reports on Competition and Pricing" which comments on Dennis Carlton's two 
preliminary reports submitted to ICANN in March 2009. In this reply, Carlton 
concludes that there is no basis for Dr. Kende's claim that the study of the 
scope of the market for registration services authorized by the ICANN Board 
in 2006 is necessary for evaluating ICANN's gTLD proposal. This is because, 
even if new gTLDs did not compete with .com and other major TLDs for 
existing registrants, new gTLDs would be expected to result in greater 
product choice and increased competition for new registrants. Additionally, 
Dr. Kende provides no basis for concluding that restricting the entry of new 
gTLDs is the best solution to trademark holders' concerns that new gTLDs 
will increase the need for defensive registrations. Alternative mech! anisms 
for protecting trademark holders are being reviewed by ICANN that are likely 
to protect trademark holders interests while preserving the benefits to 
consumers of entry. In addition, data presented by Dr. Kende appears to 
exaggerate the need for defensive registrations by failing to distinguish 
between productive supplemental registrations which attract and maintain 
traffic from those which are undertaken only to protect trademarks. Finally, 
this paper explains that there is no apparent basis for Dr. Kende's 
suggestion that the absence of price caps for new gTLDs will require 
elimination of price caps for existing TLDs.

New GTLDs and the Internet
Openness Change Innovation
After years of discussion and thought, new generic top-level domains (gTLDs) 
are being expanded. They will allow for more innovation, choice and change 
to a global Internet presently served by only 21 generic top-level domain 
names. As a not-for profit corporation dedicated to coordinating the 
Internet's addressing system, ICANN is not doing this to add to its revenue. 
An implementation plan is being developed with opportunities for public 
comment.  There will be processes for objections. There has also been 
detailed technical scrutiny to ensure the Internet's stability and security. 
There will be an evaluation fee but it will recover costs only (expenses so 
far, application processing and anticipated legal costs).
Promoting competition and choice is one of the principles upon which ICANN 
was founded. In a world with 1.5 billion Internet users (and growing), 
diversity, choice and innovation are key.  The Internet has supported huge 
increases in choice, innovation and the competition of ideas, and expanding 
new gTLDs is an opportunity for more.

Glen de Saint Géry
GNSO Secretariat