ICANN just published a letter it received from Microsoft.com which is objecting to closed generic strings.
Here is the letter sent from the Assistant General Counsel , Trademarks Microsoft Corporation, Russell Pangborn:
“”Re: Closed Generic Top-Level Domains (TLDs)
Dear Dr. Crocker and Messrs. Chehadé and Chalaby:
We are writing to express our concern, similar to concerns expressed by Australia and Germany in their respective Early Warnings, regarding private, exclusive ownership of closed generic TLDs. As you are aware, a small number of companies have applied for TLDs that consist of generic industry categories and seek to control them in closed fashion. Examples of generic TLDs that are being pursued as closed include .insurance, .app, .jewelry, .search, and .book, among others.
This situation threatens the openness and freedom of the internet and could have harmful consequences for internet users worldwide. These applications also present a competitive threat to other companies. In addition to these policy concerns, closed generic TLD applications merit close scrutiny because the applicants are attempting to circumvent ICANN’s Code of Conduct and New Registry Agreement through exemptions that were not intended for them. We ask the Board to consider requiring applicants for closed generic TLDs to either open the TLD or withdraw for a full refund.
Anticompetitive Impact
When ICANN announced its plan to increase the number of TLDs available on the Domain Name System, one of the stated goals was to enhance competition and consumer choice.1 As a result of ICANN’s decision to expand the number of TLDs, over 1900 applications were filed.
2 A majority of these applications conformed to ICANN’s goals and fell into two groups: (1) closed brand TLDs and (2) open generic TLDs.
However, certain applicants filed new TLD applications for generic categories in the very industries in which they compete, with the stated goal of controlling those TLDs as closed registries.
If ICANN allows closed generic TLDs to proceed, competition will suffer.
The companies at issue will be positioned to gain unfair advantage in direct navigation and online search; will become associated with the very genus of products they offer; and will likely control their generic TLDs perpetually since the registry agreements permit unlimited automatic renewal in ten-year terms. Additionally, the companies at issue will likely be able to prevent substantially similar TLDs from being registered in the future, such as .apps or .jewelrystore.
Needless to say, this will result in steep barriers to entry for would-be competitors.
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