House Subcommittee Rips ICANN Domain Name Program, Calls for Delay

Last week, the House Energy and Commerce Subcommittee on Communications and Technology reviewed, and universally criticized, a proposed program by a government-sponsored non-profit, the Internet Corporation for Assigned Names and Numbers (ICANN) that would accept applications to expand the existing set of internet top-level domain (TLD) names.

At present, websites only use one of a handful of TLDs, such as the familiar .com, .org, .edu and .gov extensions.  The proposed new program would offer the opportunity for companies and individuals to register, name, and operate their own TLDs for an initial fee of $185,000 and an annual maintenance fee of $25,000. 

Opponents of ICANN’s proposal also point to the potential for “cyber-squatting” under the new web domain system.  Companies and brand managers would have to spend enormous sums of money to defensively register a potentially-unlimited number of TLDs.  The potential for trademark abuse and fraud was pointed out by many, including both Subcommittee Chairman Greg Walden (R-OR) and Ranking Member Anna Eshoo (D-CA).  Nearly all the lawmakers on the subcommittee, both Republicans and Democrats, called for the program to be delayed.

ICANN’s Senior Vice President Kurt Pritz struggled to justify the $185,000 registration fee, while Daniel Jaffe of the Association of National Advertisers testified that the program would force businesses to choose between massive cost increases and damage to their reputation by cyber-squatters.  Jaffe leads the Coalition for Responsible Internet Domain Oversight (CRIDO), of which IFA is a member.  Individual franchises rely on the continued strength of world-class brands that help give franchises a higher success rate than other small businesses.

According to ICANN’s own studies, Mr. Jaffe said, the cost of the proposal would “force companies to reduce capital investment and convert billions of dollars worth of resources from job creation and product development”.

In an economic climate where businesses continue to deal with uncertainty and job-killing government regulation, it is evident that ICANN’s top-level domain expansion would create an enormous and unnecessary burden for all businesses and for franchise businesses in particular.

Click here for more information about ICANN and its impact on franchise businesses.