Expanded Internet domains: Boon or bane?

Depending on your point of view, the expansion of Internet domains is either a threat to intellectual property and trademarks that will cost legitimate business millions of dollars in legal fees and defensive name registrations, or a boon to consumers that will increase competition, improve service and create jobs.

Anjali K. Hansen, an intellectual property attorney for the Council of Better Business Bureaus, told a House panel that the council already has to support unneeded domain names in existing Top Level Domains to protect its trademarks.

“We own over 300 domain names and many of those are defensive registrations in TLDs where we have no intention of operating a website, but we nonetheless feel compelled to purchase in those TLDs to keep our trademarks out of the hands of fraudsters,” Hansen said in prepared testimony. “Without more controls on Internet registries and registrars, the Internet will increasingly serve criminal interests over the public interest.”

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But the operator of one expansion TLD said there is private-sector demand for more domains to create more competition and better serve communities on the Internet.

“Competition is what leads to innovation, drives business, creates jobs and provides opportunities heretofore unknown,” said Thomas Embrescia, chairman of Employ Media, registry operator for the .jobs TLD.

The .jobs domain is a sponsored TLD serving a defined community and sponsored by the Society for Human Resource Management. It was added to the Internet as part of the 2004 expansion. Embrescia said the latest round of expansions scheduled to kick off in January could do for the Internet what FM spectrum did for radio and cable did for television.

“Regardless of medium, history has shown there are substantial benefits to consumers and businesses alike when spectrum and bandwidth are expanded,” he said.

The House Energy and Commerce subcommittee on communications and technology held a hearing Dec. 14 on plans by the Internet Corporation for Assigned Names and Numbers to open up the Internet to potentially hundreds of new generic Top Level Domains. The whole Energy and Commerce Committee held a similar hearing Dec. 8.

Top Level Domains are the suffixes on URLs and e-mail addresses that appear to the right of the final dot in the address. Generic TLDs are broad categories that serve large communities, such as businesses for .com, public service groups for .org, educational organizations for .edu, and government for .gov.

There currently are 22 gTLDs. ICANN announced the expansion program in June after six years of discussions and will open a three-month window for applications for the new TLDs on Jan. 12. Objections to applications can be filed through Dec. 1, 2012, and the first new gTLDs could go online by January 2013 if there are no objections. Current estimates are that from 500 to 700 applications could be filed, at a cost of $185,000 each.

Critics in the business community complain that the new TLDs would open up a new landscape for cyber squatters and criminals, forcing legitimate owners of brands and trademarks to spend millions of dollars in defensive registration of names within the new domains. ICANN has responded that those concerns were addressed in developing the program.

“New TLDs offer more protection for consumers and trademark holders than today’s TLDs, with abuse mitigation measures and trademark protections that will sharply reduce the need for defensive registration,” ICANN senior vice president Kurt Pritz told the subcommittee.

ICANN says it has set a high technical and financial bar for new domain applications. In addition to the steep application fees, individuals cannot apply — only corporations, organizations and institutions are eligible. ICANN also has established a formal objection process for trademark holders and other potentially aggrieved parties.

Critics say the protections put too much of a burden on legitimate trademark holders. The CBBB’s Hansen said that ICANN’s procedures give trademark holders only first right to buy trademarked domains and do not permanently block use by others. She said ICANN should offer blanket protection to trademark holders.

“The launch of new Top Level Domains is going to make protecting our brand – and those of many other businesses and nonprofits -- a great deal more difficult and costly unless specific measures are taken,” Hansen said.

Josh Bourne, president of the business organization Coalition Against Domain Name Abuse, offered a list of improvements to the gTLD expansion short of shutting the program down completely:

• Declare when the next applicant round will take place so that trademark holders would not feel pressured to immediately apply for TLDs defensively.

• Require registries in new TLDs to give brand owners the option to purchase a block for their trademarks before any registration period opens.

• Increase government oversight of ICANN.

• Strengthen the Anti-Cybersquatting Consumer Protection Act to provide better deterrents against cybersquatting.

• Lower the cost of multiple applications for trademark holders applying for domains to protect multiple trademarks.