However, as the BC suggested in its Constituency Impact statement to the Task Force (Part B, Part 7 of the Final Report), we remain highly concerned that the proposed new TLD policy seems to ignore the problem of abusive registrations almost entirely.  As we said in our Constituency Impact Statement, without substantial policy development designed to curb abusive registrations, we foresee, upon introduction of more new TLDs, a world of increased opportunity for abusive competitive practices and fraud -- including typo-squatting, phishing, malware distribution and other forms of bad faith activity.  We then outlined a number of recommendations that could help to control these abusive practices:

• graduated sanctions for contract non-compliance by Registries and Registrars
• avoiding confusingly similar domain names
• avoiding infringement of third party prior rights especially trade mark rights
• clear, quick and low-cost procedures for dispute resolution and the removal of bad faith registrations
• measures to prevent abuse of personal data or other commercially-valuable data.

 

The Task Force has recommended that new TLDs not be confusingly similar to existing TLDs, but otherwise has largely avoided these recommendations and the issue of cybersquatting generally.  It remains to be seen how this confusing similarity standard for TLDs could be adjudicated in practice, given the existing similarity of many existing TLDs (e.g. .com, .co, .cm,  .cn, .ch ).  The Task Force did not consider any other policy recommendations to attempt to curb abusive registrations.  Rather, the Task Force has agreed to state potential Rights Protection Mechanisms (“RPMs”) as Implementation Guidelines which could be employed by new TLD operators at their option.  A small ad hoc group is working to draft those RPMs, but it is unclear whether new registry operators will choose to employ them since they will have no obligation to do so.

 

Consequently, unless ICANN tackles the abusive registration problem directly and implements new policies prior to public availability of domains in any new TLDs, we expect that new TLDs may have a substantially negative impact on business users from:

• user confusion about site ownership and subsequent reputational damage to well-known businesses
• costs from diminished user confidence in e-commerce
• wasted costs of defensive registrations and online brand monitoring and enforcement
• wasted costs in legal and other actions to prevent avoidable criminal and cyber-squatting activity
• wasted costs and fraudulent losses to businesses and their customers from phishing and malware sites.

 

We hope that the new TLDs will only comprise a relatively small part of the overall cybersquatting problem.  The problem appears likely to remain much more substantial in existing TLDs, particularly .com.  Strong action is needed to begin to curb that existing problem for online businesses, and ensure it is not replicated in new TLDs. 

 

We urge ICANN to continue its work to address domain tasting, as it most certainly increases the volume of abusive registrations by allowing free use of domains.  We further urge ICANN to consider mandatory Rights Protection Mechanisms and, in particular, a review of UDRP  procedures and practices designed  with the goal to make the UDRP  rules more cost effective and timely  to enforce, in hopes that  they could  someday act as a deterrent to cybersquatting.  If ICANN continues to rely on the existing UDRP process as the sole, mandatory policy designed to curb abusive registrations, then many online businesses will continue to suffer significantly as many registrars, registries and ICANN continue to increase revenue from this illegal activity.  We further expect the problem only will continue to grow in volume and intensity, as indicated by the rapid rise of phishing and malware sites that are generally not subject to rational resolution via the UDRP.

 

In addition to clear, quick and low-cost procedures for dispute resolution and the removal of bad faith registrations, the BC would also like to see ICANN impose graduated sanctions on registrars and registries who are not in compliance with their contracts, including any consensus policies yet to be developed in an effort to curb cybersquatting.  The BC is interested in all other ideas as to how abusive registrations can be abated, and remains eager to participate in any and all ICANN efforts to minimize them.