The Brave New World of Internet Domains

Beginning tomorrow, you too can have your own domain!  Perhaps.  

The Internet Corporation for Assigned Names and Numbers (“ICANN”) begins accepting applications tomorrow for new generic top-level domains (“gTLDs”), a development that  PCWorld.com recently labeled one of the  “5 Major Changes Facing the Internet in 2012.” 

Currently, there are 22 gTLDs, including .com and .net, which operate at the highest “root” level of the internet’s Domain Name System.  Under the new system, applicants can apply for gTLDs of their choosing, opening up the internet to a range of interesting possibilities. 

ICANN’s Applicant Guidebook explains that the new gTLDs can be either “community based” or “standard.”  “[A] community-based gTLD is a gTLD operated for the benefit of a clearly delineated community,” and the application process requires applicants to propose dedicated registration and use policies, among other requirements.  Standard gTLDs, in contrast, “can be used for any purpose” and “may or may not employ eligibility or user restrictions.”

The new system has triggered much concern.  Just last month, both the House and Senate held hearings on the issue, and both the U.S. Federal Trade Commission (“FTC”), in conjunction with various members of Congress and the Department of Treasury, and the U.S. House of Representatives issued public letters expressing concern regarding the new gTLDs.

Key to this concern is the potential for increased fraud on an internet operating on an exponentially expanded number of gTLDs.  The FTC cites consumer confusion, proliferation of existing scams, like phishing, and the ability for fraudsters to register misspellings of businesses on each of the new gTLDs, create copycat websites and obtain sensitive personal information with relative ease.  FTC is also concerned about the accuracy and reliability of “Whois” data used to identify website operators.            

FTC urged ICANN to make several changes to the proposed system before the new gTLDs “go live”:

1. implementation of the new gTLD program as a pilot to substantially reduce the number of gTLDs that are introduced in the first application round;
2. bolstering the contractual compliance program by hiring additional staff and strengthening contractual provisions related to consumer protection, enforcement and sanctions;
3. development of a consumer complaint monitoring program;
4. inclusion of  a consumer harm assessment as part of the evaluation and approval process for each proposed gTLD; and
5. improvement in the accuracy of Whois data (which enable the public to identify owns of domain names). 

ICANN CEO Rod Beckstrom responded yesterday during a speech at the Center for Strategic and International Studies that ICANN intends to proceed as planned, citing a number of the potential benefits of the expanded gTLD plan.

 Although physically located in the United States, ICANN is not subject to U.S. governmental authority.  The U.S. government’s only real option is to pursue wrongdoers directly – at least those that fall within its jurisdictional reach.  

It’s likely that the world will see a drastically different internet in 2012 and perhaps a noticeable uptick in both litigation and FTC enforcement actions brought against sites alleged to be deceptive or otherwise unlawful.  We will keep you posted.