Giving Big Corporations “Closed Generic” Top-Level Domain Names to Run as Private Kingdoms Is Still a Bad Idea

No business can own the generic word for the product it sells. We would find it preposterous if a single airline claimed exclusive use of the word “air,” or a broadband service tried to stop its rivals from using the word “broadband.” Until this year, it seemed settled that the internet’s top-level domain names (like .com, .org, and so on) would follow the same obvious rule. Alas, ICANN (the California nonprofit that governs the global domain name system) seems intent on taking domains in a more absurd direction by revisiting the thoroughly discredited concept of “closed generics.”

In a nutshell, closed generics are top-level domain names using common words, like “.car.” But unlike other TLDs like “.com,” a closed generic TLD is under the control of a single company, and that company controls all of the domain names within the TLD. This is a terrible idea, for all of the same reasons it has failed twice already. And for one additional reason—defenders of open competition and free expression should not have to fight the same battle a third time.

Closed Generics Rejected and Then Resurrected

The context of this fight is the “new generic top-level domains” process, which expanded the list of “gTLDs” from the original six (.com, .net, .org, .edu, .gov, and .mil) to the 1,400 or so in use today, like .hot, .house, and .horse. In 2012, during the first round of applications to operate new gTLDs, some companies asked for complete, exclusive control over domains like .baby, .blog, .book, .cars, .food, .mail, .movie, .music, .news, .shop, and .video, plus similar terms written in Chinese characters. Most of the applicants were among the largest players in their industries (like Amazon for .book and Johnson & Johnson for .baby).

The outcry was fierce, and ICANN was flooded with public comments. Representatives of domain name registrars, small businesses, non-commercial internet users, and even Microsoft urged ICANN to deny these applications.

Fortunately, ICANN heeded the public’s wishes, telling the applicants that they could operate these top-level domains only if they allowed others to register their own names within those domains. Amazon would not be the sole owner of .book, and Google would not control .map as its private fiefdom. (Some TLDs that are non-generic brand names like .honda, .hermes, and .hyatt were given to the companies that own those brands as their exclusive domains, and some like .pharmacy are restricted to a particular kind of business . . . but not one business.)

A working group within the ICANN community continued to debate the “closed generics” issue, but the working group’s final report in 2020 made no recommendation. Both the supporters and opponents of closed generics tried to find some middle ground, but there was none to be found that protected competition and prevented monopolization of basic words.

That’s where things sat until early this year, when the Chairman of the ICANN Board, out of the blue, asked two bodies who don’t normally make policy to conduct a “dialogue” on closed generics: the ICANN GNSO Council (which oversees community policymaking for generic TLDs) and the ICANN Government Advisory Committee (a group of government representatives which as its name indicates, only “advises”). The Board hasn’t voted on the issue, so it’s not clear how many members actually support moving forward.

The Board’s letter was followed up a few days later by a paper from ICANN’s paid staff. It claimed to be a “framing paper” on the proposed dialogue. But in reality, the paper presented a slanted and one-sided history of the issue, suggesting incorrectly that closed generics were “implicitly” allowed under previous ICANN policies. The notion of “implicit” policy is anathema to a body whose legitimacy depends on open, transparent, and participatory decision-making. What’s more, the ICANN staff paper gives no weight to a huge precedent – one of ICANN’s largest waves of global public input, which was almost unanimously opposed to closed generics.

As the ICANN Board (or at least some of its members) try to start a “dialogue” that would keep the closed generics proposal alive, the staff paper went even further and tried to pre-determine the outcome of that dialogue, by suggesting that some closed generic domains would have to be allowed, as long as lawyers for the massive companies that seek to control those domains could come up with convincing “public interest goals.”

As a result, the land rush for new private kingdoms at the highest level of the internet’s domain name system appears poised to begin again.

Still a Bad, Pro-Monopoly Idea

The problems with giving control of every possible domain name within a generic top-level domain to a single company are the same as they were in 2012 and in 2020.

First, it’s out of step with trademark law. In the US and most countries, businesses can’t register a trademark in the generic term for that kind of business. That’s why a computer company and a record label can get trademarks in the name “Apple,” but a fruit company cannot. Some trademark attorneys in the ICANN community have suggested that the US Supreme Court’s decision in the Booking.com case means that trademarks in generic words are now fair game, but that’s misleading. The Supreme Court ruled that adding “.com” to a generic word might result in a valid trademark—but the applicant still has to show with evidence that the public associates that domain name with a particular business, not a general category. And that’s still difficult and rare. If trademark law doesn’t allow companies to “own” generic words, as part of a domain name or otherwise, then ICANN shouldn’t be giving a single company what amounts to ownership over those words as top-level domains.

Second, closed generics are bad policy because they give an unfair advantage to businesses that are already large and often dominant in their field. Control of a new gTLD doesn’t come cheap—the application fee alone is several hundred thousand dollars, and ongoing fees to ICANN are also high. Allowing a bookstore owner named Garcia to run a website at garcia.book is a powerful tool for building a new independent business with its own online identity. A business with a memorable, descriptive domain name like garcia.book is less dependent on its placement in Google’s search results, or Facebook’s news feed. If, instead, only Amazon could create websites that ended in .book, the small businesses of the world would lose that competitive boost, and the image of Amazon as the only online bookseller would be even more durable.

Third, closed generics would blast a big hole in the pro-competitive firewall at the heart of ICANN: the rule that registries (the wholesalers like Verisign who operate top-level domains) and registrars (the retailers like Namecheap who register names for internet users) must remain separate. That rule dates from ICANN’s founding in 1998, and was designed to break a monopoly over domain names. The structural separation rule, which is relatively easy to enforce, helps stop new monopolists from arising in the domain name business. Exclusive control over a generic top-level domain would mean that single companies would act as the registry and the sole registrar for a top-level domain.

The Public Doesn’t Need Closed Generics, and “Public Interest” Promises Don’t Work in ICANN-Land

The ICANN Board’s letter shared the GAC’s 2013 suggestion that closed generics should be allowed if they could be structured to “serve the public interest.” But which “public” might that be? There’s no reason why giving full control of a generic TLD to a single company would serve internet users better than a domain that’s open to all (or at least all members of a particular business or profession). The justifications we’ve seen boil down to arguing that someone, somewhere will come up with an innovative use for a closed generic domain. That simply begs the question, while not explaining how exclusive control is a necessary feature.

On top of that, ICANN does not have a good track record of holding domain registries to the “public interest” promises they make—its enforcement mechanism is slow, cumbersome, and tends to embroil ICANN in content moderation issues, which is something the organization is rightfully forbidden to do.

No More Sequels

Over the decade-plus of ICANN’s project to expand the top-level domains, no company has been allowed to operate a generic TLD as its private kingdom. And despite two rounds of heated debate, the community has not come up with a plan for doing this well or fairly.

It’s time to stop.

The only motive behind the continuing push for “compromise” on the closed generics issue is the wealthiest players’ desire to control the internet’s basic resources. ICANN should put its foot down at last, put the closed generics idea on the shelf, and leave it there.

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Categories: Electronic Frontier Foundation

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