Web-Name Expansion Must Ease Corporate Concerns, U.S. Says

The nonprofit group that manages the Internet’s address system needs to take steps to ease corporate concerns over a program to add hundreds of top-level domains beyond .com and .net, the U.S. Commerce Department said.

Once the application period for Web suffixes ends, the Internet Corporation for Assigned Names and Numbers should assess the need to phase in the introduction of domains, Lawrence Strickling, Assistant Secretary of Commerce, wrote in a letter yesterday to Icann Chairman Stephen Crocker.

During meetings with business representatives in recent weeks, the Commerce Department has “learned that there is tremendous concern about specifics of the program that may lead to a number of unintended and unforeseen consequences and could jeopardize its success,” Strickling wrote.

General Electric Co. (GE), Johnson & Johnson (JNJ) and Coca-Cola Co. (KO) are among more than 40 companies that have joined with the Association of National Advertisers to oppose the expansion, saying it will increase costs for companies, confuse customers and create new risks of Internet fraud.

Icann, operating under a Commerce Department contract, approved a plan in June to expand the number of top-level domains beyond .com, .net and .org to spur online innovation. The group will start accepting applications Jan. 12 for Web suffixes including company and brand names, cities and words such as .book. Applications will cost $185,000 for each domain.

Defensive Registration

In the letter sent yesterday, Strickling also urged Icann to take steps to “minimize the perceived need” for trademark owners to defensively register new top-level domains that they have no interest in operating, and improve awareness of the “purpose and scope” of the program.

Strickling runs the National Telecommunications and Information Administration, the Commerce Department unit that oversees the Icann-held contract. He said his agency does “not seek to interfere with the decisions and compromises” reached during Icann’s six-year deliberations over the expansion.

Icann appreciates that Strickling “recognizes that many of the recent concerns expressed about the new top-level domain program are more about ‘perceived’ problems than actual deficiencies,” Crocker said in an e-mailed statement today. Icann will review Strickling’s recommendations and those of other parties “with the intent of making this program truly beneficial to the global Internet community,” Crocker said.

Advertiser Group Disappointed

The Association of National Advertisers, while appreciative of the Commerce Department raising the industry’s concerns with Icann, is disappointed the agency didn’t call for a pause or delay in the domain-expansion program, Dan Jaffe, ANA’s executive vice president of government relations, said in an interview today.

Senator Jay Rockefeller, a West Virginia Democrat who leads the Senate commerce committee, urged the Commerce Department in a Dec. 28 letter to ask Icann to delay the application period or “drastically limit” the number of new domains it approves next year, citing the potential for increased costs to brand and trademark owners.

The plan, “as it is currently structured, does not address the concerns that many stakeholders have raised,” Rockefeller wrote in his letter, which was addressed to Strickling and Commerce Secretary John Bryson.

The Federal Trade Commission said in a Dec. 16 letter that Icann should introduce the expansion as a pilot program and reduce the number of domains created to lower the risk of consumer fraud. The FTC, which has no direct authority over Icann, can act when companies engage in deceptive trade practices.

Icann, based in Marina del Rey, California, has managed the Internet’s address system since 1998 for the U.S. government. It oversees 22 so-called generic top-level domains, including the commonly used .com, .net, and .org.

To contact the reporter on this story: Eric Engleman in Washington at eengleman1@bloomberg.net

To contact the editor responsible for this story: Michael Shepard at mshepard7@bloomberg.net

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