[AfrICANN-discuss] New gTLDs – Final Reports Available on Competition and Pricing

[Anne-Rachel Inné]

http://www.icann.org/en/announcements/announcement-06jun09-en.htm
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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
gTLDs<http://www.icann.org/en/topics/new-gtlds/carlton-re-proposed-mechanism-05jun09-en.pdf>[PDF,
628K], and
   - Comments on Michael Kende's Assessment of Preliminary Reports on
   Competition and
Pricing<http://www.icann.org/en/topics/new-gtlds/carlton-re-kende-assessment-05jun09-en.pdf>[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
competition-pricing-final at icann.org 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.

*Media Contacts:*

Brad White
Director of Media Affairs
Corporate Affairs
ICANN
Ph: +1.202.429.2710
E: brad.white at icann.org

International: Andrew Robertson
Edelman (London)
Ph: +44 7921 588 770
E: andrew.robertson at edelman.com
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