ICANN’s double jeopardy

Two more missteps by the agency watching over domain-name registration send critics into convulsions.

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Poor, poor, pitiful ICANN. Ever since Congress assigned the nonprofit the job of coordinating the management of the domain-name system in 1998, the Internet Corporation for Assigned Names and Numbers has been hammered by critics accusing it of financial missteps, heavy-handed attempts at Net regulation and anti-democratic elitism. And after two more domain-name brouhahas broke out this week, ICANN’s foes are up in arms again, claiming that ICANN’s actions — or lack thereof — prove once again that the nonprofit plays favorites and moves at a near-paralytic pace that hurts competition.

Both incidents relate to the secondary market for domain names, in which owners of domain names attempt to resell their properties at a profit. As the dot-com shakeout continues and names such as Boo.com become suddenly re-available, this market has picked up considerable steam. But one would-be domain-name registrar, named Afternic, is claiming that ICANN’s slow movement has deprived it of a chance to take part in that market, and is suing ICANN in an attempt to recoup about six months worth of business, which could amount to millions of dollars.

The company filed to become a domain-name registrar in October, but ICANN has yet to approve the request even though ICANN has never rejected a registrar’s application, and even though there are already more than 100 registrars in the market.

“It’s absolutely ridiculous,” says Jon Whelan, Afternic’s co-CEO, noting that accreditation normally takes about four to six weeks. “We’ve been wronged, we’ve been harmed and we need relief from the court.”

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An ICANN spokesperson refused to respond to specific questions, pointing reporters only to an official comment on its Web site. That statement declares that Afternic’s application is being held up because the wannabe registrar “presented many offers to sell domain names (the misspelled Microsotf.com, for example) based on other company’s names, some with remarks reflecting the abusive nature of the offers.” In other words, ICANN is endeavoring to protect trademark-holders’ interests.

But is this excuse legitimate? Afternic only sells names that have already been registered elsewhere, says Whelan. According to trademark lawyers, the trademark holder — not an organization, nor a registrar — must police its own marks. And while ICANN has been busy arguing with Afternic, two other registrars have started offering strikingly similar services. Last month Register.com started offering escrow accounts to facilitate the transfer of domain names and next month Network Solutions is scheduled to start auctioning off names as well.

What’s more, Network Solutions can hardly be defended as an upstanding model for domain-name business practice. Not only is Network Solutions best known for regularly bungling the registration process, but the company’s latest plans to generate revenue include a scheme to resell domain names that have expired without first putting the names back in the public domain. Critics of the plan say it gives Network Solutions an unfair advantage over other registrars. While all registrars have access to first-time domain registrations, competing with each other on the basis of service and price, if Network Solutions is allowed to hold onto names whose owners are in default of yearly registration fees, critics say it will in effect reestablish the monopoly it held until April 1999, when ICANN forced the company to give up control of the central name database.

ICANN needs to be more aggressively involved, says Elana Broitman, Register.com’s director of policy and public affairs. “It’s a great abuse of the registry,” says Broitman. “It undermines the public trust.”

“The real problem is procedural,” says Michael Froomkin, a law professor at University of Miami who has worked with ICANN on several projects. “ICANN gets into these messes because they make up the rules as they go along. Then, people justifiably get angry because they’ve never heard of what ICANN is talking about.”

And angry they are. By using trademark holders as a shield for its delay in Afternic’s case, and by failing to take any action in the case of Network Solutions, ICANN has once again proven that big business calls the shots, says Jay Fenello, founder of Iperdome, a company that’s seeking permission from ICANN to register names under the .per domain.

“It’s really a small group of people that are running things in a way that shows favoritism,” he says. “They make decisions in smoke-filled rooms and if you don’t fit their agenda, they dump on you. It’s the same story over and over again.”

Damien Cave is an associate editor at Rolling Stone and a contributing writer at Salon.

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