As Marketing Groups Fight Web-Domain Increase, Here's What's in the Plan

Despite Brand Safeguards, Some Wonder Why Expansion Is Necessary

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Last month, the governing body that oversees the management of addresses for the web, such as .com and .org, agreed to allow an almost infinite array of new addresses, such as .phone, .coke, or .advertising, presenting a new challenge for brands on the web.

Advertisers bristled at the fees required to set up these new addresses: $185,000 with a $25,000 annual maintenance fee for these "top-level domains." Bob Liodice, president-CEO of the Association of National Advertisers, leveled criticism at the governing body responsible for the plan, the Internet Corp. for Assigned Names and Numbers (ICANN), saying it hadn't considered the full economic impact on advertisers.

"We're dealing with thousands of brand owners, and they have to understand what the benefits are of this," Mr. Liodice said. "I haven't found a brand owner that says this is a good thing."

His organization, along with the Interactive Advertising Bureau and the 4A's, wants the program halted so they can determine a better course of action moving forward.

ICANN, however, appears undaunted by the sudden outburst of criticism from the advertising and marketing industry. Here, Ad Age dissects the important points of the plan, which runs to 352 pages in length. ICANN will start taking applications Jan. 12, 2012.

POINT 1: Established brands will not have to defensively register their trademark, such as .coke or .walmart. But they will have to pre-register their trademark with a clearinghouse ICANN will set up -- and that won't be free.

There are several trademark protections built into the proposal, according to ICANN, which were designed by an international group of trademark attorneys. An established brand can reject anyone else from registering its trademarked name without registering the domain themselves. In other words, Coke doesn't have to pay $185,000 to keep someone else from registering .coke.

At the same time, ICANN will require trademark holders to pre-register their trademark with a clearinghouse it will set up. Fees for the clearinghouse have yet to be determined; ICANN said it will be commensurate to other trademark clearinghouse operations.

POINT 2: Second-level domains (the stuff before the period) could actually present more problems than the new top-level domains. The trademark clearinghouse says it will determine if anyone is trying to register what is called a second-level domain that may be trademarked, such as coke.soda, and inform the brand.

Second-level domains will be handled by whomever wins the right to manage the particular top-level domains. So, if Network Solutions were to win the right to manage .store, it would be the one to then offer brandname.store, much the way it currently offers brandname.com.

Within this, there is potential for dispute -- just as there is with .com. An example would be apple.name. Whoever wins the right to manage .name could allow a local apple farm to register that address. If Apple computer wanted to dispute that domain, it can appeal to a committee within ICANN. If the dispute-resolution process shows the apple farm has a legitimate interest in the name, Steve Jobs would lose. However, if someone registers the domain with an interest in selling computers, then Mr. Jobs would have a much better argument for taking it down, according to ICANN.

POINT 3: Dispute resolution will not be a lengthy process. ICANN claims it will set up a speedy dispute resolution process, but no matter the outcome, as soon as a dispute is lodged with ICANN, the governing body will immediately take down the website in question until a resolution is reached.

POINT 4: The fees could go up -- or they could go down. ICANN Senior VP Kurt Pritz said the new program is meant to be revenue neutral, meaning the fees will be just enough to fund the bureaucracy to manage the program. "If we discover that it costs less to manage the program, the fees will be lowered," he said. At the same time, if the costs are determined to be higher, the fees will go up as well.

POINT 5: ICANN's board is made up of 21 members with 16 voting members form 15 different countries. Board members are made up mostly of technology professionals, trademark attorneys, policy wonks, economists and academics. There are no major advertising executives represented on the current board.

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