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[council] New gTLDs – Final Reports Available on Competition and Pricing

  • To: Council GNSO <council@xxxxxxxxxxxxxx>
  • Subject: [council] New gTLDs – Final Reports Available on Competition and Pricing
  • From: Glen de Saint Géry <Glen@xxxxxxxxx>
  • Date: Mon, 8 Jun 2009 11:39:30 -0700
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  • Thread-topic: New gTLDs – Final Reports Available on Competition and Pricing

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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 
 [PDF, 628K], and
 *   Comments on Michael Kende's Assessment of Preliminary Reports on 
Competition and 
 [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 
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

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