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June 14, 2014

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Here's the The Lowdown from DN Journal,
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to fill you in on the latest buzz going around the domain name industry. 

The Lowdown is compiled by DN Journal Editor & Publisher Ron Jackson.

Phil Corwin's Wake Up Call to ICANN: Time for the Oversight Body to Clean Up the Network Solutions/.XYZ Mess 

For those of you who have not been following the Network Solutions/.XYZ news closely and are wondering what all of the hubbub is about, Internet Commerce Association Legal Counsel Phil Corwin has just published the most comprehensive article about this sad situation to date. In the article Phil recaps all of the key revelations that have been published across multiple industry publications to date but also points out some even more important long term issues for domain registrants and the industry as a whole if ICANN doesn't step in and nip this kind of manipulative and dangerous activity in the bud.

While a lot of the publicity has focused on Network Solutions stuffing close to 100,000 unrequested .XYZ domains in their own customer's accounts, grossly inflating the perceived popularity of the TLD, Corwin notes that NetSol's actions appear to violate their Registrar Accreditation Agreement with ICANN. Even worse for the unsuspecting NetSol customers who have had their trust violated by 

ICA Legal Counsel Phil Corwin 
wonders why "ICANN is MIA on .XYZ

their registrar, the company's actions could leave those registrants open to legal action ranging from UDRPs to lawsuits. Why? Because, as Corwin points out, some of the domains NetSol registered in their customer's names are clearly trademark infringing domains like DisneyTime.xyz

So being a Network Solutions customer not only allows you to pay a registration fee that is dramatically higher than competitors (one black eye), they now offer a potential lawsuit against you at no extra charge in the form of the free .XYZ domain you never asked (another black eye). If ICANN does what they are supposed to do and investigates what is going on, NetSol could wind up with a broken nose to go along with the two black eyes and how could anyone feel sorry for them?

As Corwin notes, hundreds of other new gTLDs are on their way. If NetSol and .XYZ are allowed a pass how many others are going to mimic this kind of "marketing" - stuffing the accounts of current .com owners with domains they didn't register, don't want and could get in trouble for having in their accounts? 


This has to be examined now and if ICANN doesn't live up to their duties as an oversight body the mess currently sitting on their doorstep is going to move into their executive suite. They created the new gTLD program and it is up to them to keep it from turning into a Frankenstein monster running amok in the global domain village by allowing those seeking shortcuts to use existing registrants as pawns in their sales game. 

As Corwin notes, currently unanswered questions are ones that "the Federal Trade Commission (never a fan of the new gTLD 

program) or other national consumer protection agencies, as well as states’ attorney general, might want to investigate, especially if ICANN doesn’t move quickly."

Corwin's piece is a serious one that deserves widespread attention. It will take more time to digest than the Tweet-sized bites many of us have become used to in this age of the short attention span,  but if you consider yourself a professional in this business (or hope to be one) it should be considered must reading. In the closing summary of the article Corwin wrote:

There’s a lot more at stake in this situation than which registry has the most registrations. There are significant contract compliance and consumer protection issues, compounded by possible involuntary trademark infringement. Thousands of registrants are directly affected, and all registrants are potentially at risk. Can it really be permissible for any ICANN-accredited registrar to involuntarily assign new gTLD domains to existing customers on an opt-out basis, given the substantial potential legal liability that accompanies domain registrant status? If that is permitted then we could see hundreds of thousands or even millions of involuntary domain registrations occur over the coming months as hundreds of new gTLDs become available to the general public. Aside from the risks to “registrants”, such a development could substantially erode the public perception and reputation of the entire new gTLD program – and of ICANN.

It should be as simple as ABC for ICANN to realize it needs to step up to the plate and take responsibility for initiating a full inquiry and report on what has transpired in the initial .XYZ registration phase. The answers are important for registrants, for registrars who don’t engage in opt-out registration practices, and for the other operators of new gTLD registries who are busy trying to create value that attracts willing registrants.

It’s also of immense consequence for ICANN’s own reputation as a critical time in its history. As the community is beginning to deliberate on enhanced accountability measures to accompany the IANA functions transition, it would be exceedingly useful for ICANN to demonstrate that it can act of its own volition and investigate suspicious situations involving contracted parties — and hold them duly accountable if transgressions are found.

(Posted June 13, 2014)

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