New top level domain (TLD) applications raise high financial stakes for the applicants. Those seeking new TLDs will have invested at least half a million dollars to prepare and submit their proposal, and many of the companies involved have raised millions more in backing from investors or venture capital firms. In aggregate, applicants plunked down about $250 million in application fees alone.
What happens when two or more applicants want the same string? There are two possibilities. If decision criteria are objective and clear, then ICANN impartially applies a well-defined policy to select one of the applications. If, on the other hand, the choice is arbitrary and decision makers have the discretion to select whoever they like, applicants will invest a lot of money and resources to influence whoever makes the decision. If there are two applications for .WHATEVER, you can bet that one .WHATEVER group will do whatever they can to convince decision makers that the other gang of .WHATEVER applicants are crooks, thieves, child molesters or illegitimate interlopers in the tightly-knit whatever “community.” Bribes, back-channel bargains, and other chicanery will be inevitable.
The most important way to protect ourselves against those kinds of games is to make sure that decisions about who wins and who loses a contended TLD are made based on clearly defined, objective and transparent criteria. If decisions about who will win and who will lose millions of dollars are made in an arbitrary manner, then the money at stake is almost certain to result in the corruption of ICANN’s decision makers and decision making processes. Competing applicants will strive to influence the decision however they can, using fair means or foul.
ICANN’s TLD evaluation process was originally designed to resolve competing commercial applications through auctions, which is a completely impersonal and objective mechanism that insulates against corruption.
But ICANN’s Governmental Advisory Committee had other ideas.
The GAC has insisted on being given arbitrary powers to influence TLD applications. At the first stage, individual GAC members can issue an “early warning” against any application it doesn’t like. Then, at the final stage the GAC as a whole can issue an advice against a particular application. Originally these objections were supposed to be issued based on conflicts with international law. Then it was expanded to include undefined “sensitivities” that might be raised by a TLD string. That was bad enough, in that the concept of “sensitivities” has no basis in law. But it got worse. In the end, GAC succeeded in winning an explicit statement in the Applicant Guidebook that an early warning – and a GAC advice to the Board not to approve a TLD – can be issued “for any reason.”
Think about that. ANY REASON. So, “because I don’t like the applicant’s hair” (or race, or political views) or “because the other applicant promised to hire my sister” would all be a valid basis for early warning objections or a final GAC advice. You can’t get more discretionary than that.
This is an open invitation to corruption. Predictably, the applicants are beginning to exploit it.
Roar Domains, a New Zealand marketing firm, serves as the agent of International Basketball Federation and the International Rugby Board in the New gTLD area. It is one of several competitors for TLDs related to sports, such as .RUGBY. Roar Domains has vowed to eliminate all competitors using, among other tools, the GAC review process. In a statement issued recently, Roar domains says: “We are pleased to have obtained four Early Warnings on behalf of our applications, and fully expect the GAC process to be completed to GAC Advice.”
Note the wording here: “we have obtained four Early Warnings.” The boast leaves no doubt as to who the warnings really came from. It would be naive to think that GAC members carefully investigate 1,100 different applicant organizations and dispassionately weigh the public interest issues associated with over 1,900 strings. No, they wait for others to bring things to their attention. And so Roar approached the UK GAC member and “obtained” an early warning. The UK GAC representative already demonstrated his susceptibility to special interest lobbying during the debate over special protection for the International Olympic Committee, which had a “special” relationship to the UK government due to the presence of the 2012 Olympics there.
The Czech Republic GAC representative also abused the Early Warnings process, using it to take sides in the contention over .GREEN. There are four applicants for .GREEN, and the Czech GAC representative declared that it liked one of the four applicants better than the others because it has a nice business plan that involves creating a charity. Given that this is the only early warning the Czech government issued, and that .GREEN or the concept of an ecology domain has no special relationship to the Czech Republic, one can only conclude that the favored .GREEN applicant also “obtained” this early warning.
Private interests are thus openly exploiting the GAC’s role as gatekeeper, actively lobbying them to support their own application or to torpedo their competitors. Apparently, the GAC is more than willing to play along. There is lots to gain – currying favor from moneyed interests, for example – and nothing to lose, as the GAC is completely unaccountable to anyone, operates under no law, and can raise objections “for any reason.”
This is just the beginning: it can only get worse. We have no idea, for example, whether the path to a government’s sudden intervention on behalf of one applicant was greased with bribes or a promise of favors in return. We do not know, yet, whether there will be a revolving door between GAC members and successful TLD applicants going forward. But whether such things happened in this case or not, those kind of corruption scenarios are not only possible, but increasingly plausible.
Wiser heads in the GAC should understand why this kind of activity completely betrays its self-proclaimed status as guardian of the public interest in ICANN. Indeed, the GAC is displaying incredible hypocrisy. Many GAC members became indignant when Board member Peter Dengate-Thrush moved from the Board to a TLD company after the new gTLD policy was passed. It demanded implementation of conflict of interest policies that would delay or prohibit such moves in the future, and tried to make it seem as if the entire new gTLD process had been tainted by this move. But Dengate-Thrush had always been an advocate of new TLDs and chose to jump into the business before the Board was involved in any decisions approving specific applicants. Dengate-Thrush also did not unilaterally create the new gTLD policy, which was a product of many years and many hands. GAC advices and early warnings, in contrast, directly stick GAC members’ hands into the approval or rejection of specific TLD applications, with immediate financial consequences. The GAC’s conflict of interest issues are far more serious, its hands much dirtier, than Dengate-Thrush’s could ever have been.
The ICANN community and its Board should discount any and all GAC “Early Warnings” if they are nothing more than expressions of favoritism regarding competing applicants for the same string. Early Warnings should be only be taken seriously if they raise issues regarding conflicts between TLD strings and national laws or “sensitivities;” warnings should apply to the string, regardless of who the applicant is. When there is contention for the same string, the GAC should stay out and unless ICANN’s community-approved policies objectively favor one applicant over another, it should consider all applications for the same string to be equal, and require resolution of conflict through auction or other mechanisms consistent with stated policies. Conscientious GAC members should urge their fellow members to avoid the temptation to exploit their role in the TLD process to reward friends, enrich themselves or exert control over Internet content.