<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.0 Transitional//EN">
<HTML><HEAD><TITLE>Assessing the "Domain Name Exchange" service proposed by VeriSign</TITLE>
<META content="text/html; charset=us-ascii" http-equiv=Content-Type>
<META name=GENERATOR content="MSHTML 8.00.6001.18904"></HEAD>
<BODY>
<DIV><SPAN class=591503620-08042010><FONT color=#0000ff size=2
face=Arial>Steve,</FONT></SPAN></DIV>
<DIV><SPAN class=591503620-08042010><FONT color=#0000ff size=2
face=Arial></FONT></SPAN> </DIV>
<DIV><SPAN class=591503620-08042010><FONT color=#0000ff size=2 face=Arial>Thanks
for giving all of us more background on the proposed Verisign service. My
view is that because this proposal could pass through very quickly with little
ICANN input and has very serious potential consequences for businesses and brand
owners, we should quickly reach out to ICANN staff and tell them that there are
enough concerns that the process must be slowed down and studied
carefully.</FONT></SPAN></DIV>
<DIV><SPAN class=591503620-08042010></SPAN> </DIV>
<DIV><SPAN class=591503620-08042010></SPAN><SPAN class=591503620-08042010><FONT
color=#0000ff size=2 face=Arial>The concerns I've raised have nothing to do with
someone registering generic names. Whether we call it "tasting" or
something else, the fact remains that this service allows someone for the
price of a single domain name, to register at least 12 different domain
names a year. So, if you spent $8 to register 100 domain names
under the exchange service, you could wind up registering nearly 10,000
different domain names. On its face, this seems to be a recipe for
mischief and abuse.</FONT></SPAN></DIV>
<DIV><SPAN class=591503620-08042010><FONT color=#0000ff size=2
face=Arial></FONT></SPAN> </DIV>
<DIV><SPAN class=591503620-08042010><FONT color=#0000ff size=2 face=Arial>When
we had full blown domain name tasting under the AGP for free, the number of
infringements skyrocketed, but even today, brand owners face thousands of
instances of new infringements because cybersquatters are still willing to
pay a relatively low registration fee for the high quality names that drive
traffic. The recent report on cybersquatting out of Harvard shows
that even vigilant companies like Verizon still face many hundreds of
typosquatting incidents -- all from infringers who are willing to pay a fee
for our trademarked names. The report estimates that the top
100,000 websites containing cybersquatted domains collectively receive at
least 68.2 million daily visitors. If these cybersquatted sites were
considered as a single website, they would be ranked by Alexa as the 10th most
popular website in the world. So it is reasonable to be concerned that a
service which allows one to register multiple domain names for a single price
will only add to this problem.</FONT></SPAN></DIV>
<DIV><SPAN class=591503620-08042010><FONT color=#0000ff size=2
face=Arial></FONT></SPAN> </DIV>
<DIV><SPAN class=591503620-08042010><FONT color=#0000ff size=2 face=Arial>I
appreciate that Verisign believes it has taken some steps to make their service
more "transparent," but I don't believe transparency is the same as fixing your
business model to prevent infringements in the first place. A few
questions, comments and ideas:</FONT></SPAN></DIV>
<DIV><SPAN class=591503620-08042010><FONT color=#0000ff size=2
face=Arial></FONT></SPAN> </DIV>
<DIV><SPAN class=591503620-08042010><FONT color=#0000ff size=2 face=Arial>1) A
"free" reporting service on exchanged names is better than no reporting service
-- but it appears that the burden, administrative costs and enforcement costs
shifts to business and brand holders, who on a daily or even hourly
basis, must check this reporting service for possible
infringements. What will Verisign do when the brand holder writes to them
and demands they stop selling the name? My guess is that they would
not be accountable for taking this name out of circulation
and the trademark owner would be sending numerous cease and desist
letters, filing more UDRP actions and filing more lawsuits.</FONT></SPAN></DIV>
<DIV><SPAN class=591503620-08042010><FONT color=#0000ff size=2
face=Arial></FONT></SPAN> </DIV>
<DIV><SPAN class=591503620-08042010><FONT color=#0000ff size=2 face=Arial>2)
Your mention of the WHOWAS service does not say whether this will be provided
for free or at a cost. In any case, the same concerns about pushing the
burden on trademark owners remains. Also, what steps does Verisign intend
to take to ensure the accuracy of the information provided in its WHOIS, WHOAS
and its reporting service associated with this service? Will it permit
applicants to "exchange" names through a proxy service?</FONT></SPAN></DIV>
<DIV><SPAN class=591503620-08042010><FONT color=#0000ff size=2
face=Arial></FONT></SPAN> </DIV>
<DIV><SPAN class=591503620-08042010><FONT color=#0000ff size=2 face=Arial>3)
Will there be a cap on the number of domain names someone could register under
the exchange service?</FONT></SPAN></DIV>
<DIV><SPAN class=591503620-08042010><FONT color=#0000ff size=2
face=Arial></FONT></SPAN> </DIV>
<DIV><SPAN class=591503620-08042010><FONT color=#0000ff size=2 face=Arial>If
Verisign is serious about limiting harms to brand owners, why not:
</FONT></SPAN></DIV>
<DIV><SPAN class=591503620-08042010><FONT color=#0000ff size=2
face=Arial></FONT></SPAN> </DIV>
<DIV><SPAN class=591503620-08042010><FONT color=#0000ff size=2 face=Arial>1)
Limit the service to generic names only? Why not allow trademark owners to
provide Verisign with a list of their registered trademarks that should not be
permitted to be sold under the exchange service and allow them to opt names out
of this service? </FONT></SPAN></DIV>
<DIV><SPAN class=591503620-08042010><FONT color=#0000ff size=2
face=Arial></FONT></SPAN> </DIV>
<DIV><SPAN class=591503620-08042010><FONT color=#0000ff size=2 face=Arial>2) Why
not build in protections for the trademark owner up front when offering the
service? For example, when an applicant searches for the availability of a
name, the trademarked names provided by owners who opt out would pop
up with a warning telling the applicant that the name is a trademark owned by a
third party, warning them about the penalties associated with cybersquatting and
requiring them to declare that they have a legal right to use such
name.</FONT></SPAN></DIV>
<DIV><SPAN class=591503620-08042010><FONT color=#0000ff size=2
face=Arial></FONT></SPAN> </DIV>
<DIV><SPAN class=591503620-08042010><FONT color=#0000ff size=2 face=Arial>3) Why
not beef up requirements for accurate WHOIS contact information and prohibit
exhanging names through a proxy?</FONT></SPAN></DIV>
<DIV><SPAN class=591503620-08042010><FONT color=#0000ff size=2
face=Arial></FONT></SPAN> </DIV>
<DIV><SPAN class=591503620-08042010><FONT color=#0000ff size=2
face=Arial>Obviously, the issues are all quite complicated as are the potential
fixes, so more reason that this proposal be slowed down and studied carefully
with all affected stakeholders.</FONT></SPAN></DIV><SPAN
class=591503620-08042010>
<DIV><BR><FONT color=#0000ff size=2 face=Arial>Thanks,</FONT></DIV>
<DIV><BR><SPAN class=591503620-08042010><FONT color=#0000ff size=2
face=Arial>Sarah</FONT></SPAN></SPAN></DIV>
<DIV> </DIV>
<DIV align=left><FONT size=2 face=Arial><BR><BR><FONT color=#000080>Sarah B.
Deutsch <BR>Vice President & Associate General Counsel <BR>Verizon
Communications <BR>Phone: 703-351-3044 <BR>Fax: 703-351-3670
</FONT><BR></FONT></DIV>
<DIV> </DIV><BR>
<DIV dir=ltr lang=en-us class=OutlookMessageHeader align=left>
<HR tabIndex=-1>
<FONT size=2 face=Tahoma><B>From:</B> owner-bc-gnso@icann.org
[mailto:owner-bc-gnso@icann.org] <B>On Behalf Of </B>Steve
DelBianco<BR><B>Sent:</B> Thursday, April 08, 2010 11:05 AM<BR><B>To:</B> bc -
GNSO list<BR><B>Subject:</B> [bc-gnso] Assessing the "Domain Name Exchange"
service proposed by VeriSign<BR></FONT><BR></DIV>
<DIV></DIV><FONT face="Optima, Times New Roman"><SPAN style="FONT-SIZE: 10pt">BC
Members:<BR><BR>On April 5, VeriSign (operator of .com, .net, and .name)
proposed a new registry service called "Domain Name Exchange." VeriSign’s
proposal and QA& is posted at <A
href="http://www.icann.org/en/registries/rsep/verisign-dnex-05apr10-en.pdf">http://www.icann.org/en/registries/rsep/verisign-dnex-05apr10-en.pdf</A>
Here’s how VeriSign describes the
service:<BR><U><BR></U></SPAN></FONT>
<BLOCKQUOTE><FONT face="Optima, Times New Roman"><SPAN
style="FONT-SIZE: 10pt"><I>Based on ongoing discussions with registrars who
represent diverse business models and market segments, VeriSign has developed
the concept for the Domain Name Exchange Service to allow a registrar to
repurpose a domain name registration that has significant time remaining until
expiration. Today when a registrant terminates a package of
services from a registrar after, for example, an introductory 1 or 3 month
period, the registrar is forced to recoup the investment in the associated
domain via monetization or the secondary market. The domain exchange will
allow a registrar to offer another registrant a package that sits on top of
that same registration using a new domain.<BR>The Domain Name Exchange Service
is an optional service that is designed to provide registrars and registrants
with an effective and efficient way to manage domain name registration terms
for domain names that are no longer
needed.<BR></I><U><BR></U></SPAN></FONT></BLOCKQUOTE><FONT
face="Optima, Times New Roman"><SPAN style="FONT-SIZE: 10pt">For many website
hosting service providers, the registration of a domain name is a secondary
service. For example, the European registrar <BR>1and1 offers web hosting
with “free domains included” ( <FONT color=#0000ff><U><A
href="http://1and1.eu">http://1and1.eu</A></U></FONT> ) in order to attract new
clients to establish their online presence. Domain Exchange lets 1&1
re-use the registration if a client wants to drop the website and domain after
just a few months. Registrars would pay around 1.5x the cost of a
regular annual registration in order to get the Exchange option, and they could
exchange once per month. Perhaps there will be significant demand for this
service from registrars who have lots of turnover with hosting
clients.<BR><BR>Domain Exchange is being proposed only for .net domains, but
VeriSign may propose it for .com at some point. And that’s where several
BC officers are already raising concerns that Domain Exchange could be a new
form of “domain tasting” that would lead to even more cyber-squatting and
typo-squatting. <BR><BR>“Domain tasting” is a loaded term in ICANN
circles. “Tasting” is how domainers test a domain name to learn whether
type-in traffic generates enough advertising revenue to cover costs of
registering the domain. The names typically tasted were
generic words and phrases (like SpringCleaning.com or SpringFashions.com) that
some users might guess at by entering the URL ( instead of going thru a
page-ranked search engine). <BR>Domainers make money on these domain names by
“parking” a page with ads for related products and services. <BR><BR>The parked
pages that result from tasted names are objectionable in the way that highway
billboards are objectionable, but there’s nothing illegal about monetizing
domain traffic with advertising. Moreover, several BC members are
domainers who monetize traffic this way, and other BC members providing online
advertising services to support the trade. <BR><BR>But nothing infuriates BC
members and Internet users more than tasting or parking domains that involve
trademarked terms or typographical variants designed to deceive users.
Cybersquatting and typosquatting could increase if a new service makes it
easier to discover domain names that mislead users into thinking they have
landed on a page belonging to a known business or organization they intended to
reach.<BR><BR>Domainers discovered they could taste traffic for 5 days for zero
cost by using the Add Grace Period (AGP) that has always been offered by
registrars and registries. That led to rampant tasting in domains
like .com. The ICANN community, incl many in the BC, pushed ICANN to
end the practice of free tasting thru abuse of the AGP privilege. Using
the policy development process, ICANN effectively eliminated free AGP tasting in
2009 (<A
href="http://www.icann.org/en/tlds/agp-policy-17dec08-en.htm">http://www.icann.org/en/tlds/agp-policy-17dec08-en.htm</A>
)<BR><BR>Question is, will a new Domain Exchange service increase the incidence
of trademark and typographical squatting? I asked my friends at VeriSign
(a NetChoice member) about this concern, and here’s what I learned:
<BR><BR>Domain Exchange is not going to replace the free and unchecked tasting
that was done with AGP before 2009. First, a domain 'taster' has to
actually buy a 1-year registration to be able to use domain exchange at 11
monthly intervals. That’s cheaper than buying a dozen registrations, but its not
free. Second, it would take a year just to 'taste' a dozen names for ad
traffic. <BR><BR>Still, VeriSign acknowledges that some parties may
see Domain Exchange as a way to “taste” and then register names that infringe on
trademarks. So VeriSign is offering additional IP protection tools
described in their proposal, such as limitations on exchanges, free reporting on
exchanged names, and the WhoWas service (a permanent record of historical
Whois). <BR><BR>VeriSign is open to suggestions from the BC (and IPC)
about other tools that would minimize use of Domain Exchange for TM infringement
or other illegal purposes. They’re also prepared to answer questions in a
direct dialogue with our members if that’s easier and quicker than using the
public comment process described below.<BR><BR>So let’s begin internal
discussions on BC List, with an intent to send concerns and questions to staff,
to VeriSign, and eventually in ICANN public comments.<BR><U><BR><BR>Finally, a
word about the ICANN process for review and approval of new registry
services</U>: <BR></SPAN></FONT>
<BLOCKQUOTE><FONT face="Optima, Times New Roman"><SPAN
style="FONT-SIZE: 10pt"><BR>ICANN evaluates new registry services thru its
Registry Service Evaluation Process (RSEP). ICANN staff has 15-days to
make a "preliminary determination" whether this Registry Service requires
further consideration by ICANN because it could raise significant issues with
Security & Stability or competition. There’s no official comment
period during these 15 days, but BC members can always explain concerns to
staff. See RSEP at <A
href="http://www.icann.org/en/registries/rsep/rsep.html">http://www.icann.org/en/registries/rsep/rsep.html</A><BR><BR>If
ICANN determines that the service might raise significant Stability or
Security issues, it goes to the Registry Services Technical Evaluation Panel
and simultaneously invites public comment on the proposal (2nd chance to
comment). This panel has 45 days to do a written report regarding the
proposed service effect on Security or Stability.<BR><BR>ICANN’s Board then
posts the report for public comment (3rd chance to comment), and the Board has
30 days to reach a decision. “In the event the ICANN Board reasonably
determines that the proposed Registry Service creates a reasonable risk of a
meaningful adverse effect on Stability or Security, Registry Operator will not
offer the proposed Registry Service.”<BR><BR>So there are 2 or 3 chances to
comment over a period of 45 days (or 90 days if the panel raises S&S
concerns). <BR></SPAN></FONT></BLOCKQUOTE><FONT
face="Optima, Times New Roman"><SPAN
style="FONT-SIZE: 10pt"><BR><BR></SPAN></FONT></BODY></HTML>