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FTC Asks ICANN to Scale Back Domain Name Expansion

The Federal Trade Commissioner Friday sent a letter to ICANN, the Internet Corporation for Assigned Names and Numbers, expressing their concern with the planned expansion of Internet domain names, saying the move could leave consumers more vulnerable to fraud and undermine law enforcement efforts to track down scammers and asking it to scale back the expansion to a pilot program at first.

"A rapid, exponential expansion of gTLDs has the potential to magnify both the abuse of the domain name system and the corresponding challenges we encounter in tracking down Internet fraudsters," the Commission's letter states.

ICANN next month is planning to start offering hundreds of new top-level domain names -- the right-of-the-dot names (.com, .net), expanding from the current 22 to as many as a thousand, perhaps more.

The FTC letter, which was signed by the commissioners and copies sent to key legislators, notes that the commission has raised consumer protection concerns with ICANN for over a decade.

The FTC asks that before ICANN approves any of the applications it is soliciting starting next month that it:

- Implement the new program as a pilot program and substantially reduce the number of generic top level domains that are introduced as a result of the first application round

- Strengthen ICANN's contractual compliance program, in particular by hiring additional compliance staff

- Develop a new ongoing program to monitor consumer issues that arise during the first round of implementing the new gTLD program

- Assess each new proposed generic top level domain's risk of consumer harm as part of the evaluation and approval process

- Improve the accuracy of Whois [domain name search] data, including by imposing a registrant verification requirement

The Commission warned: "If ICANN fails to address these issues responsibly, the introduction of new gTLDs could pose a significant threat to consumers and undermine consumer confidence in the Internet."

ICANN's plan has gotten major pushback from the U.S. ad industry, nonprofits and legislators on both sides of the aisle concerned about the cost of registry, that the expansion could encourage cybersquatting, that it would cost companies millions to protect their brands, and that there could be consumer confusion and fraud, including the possibility of providing personal information to a bogus site.

The expansion of the so-called TLD's has been the subject of a couple of Hill hearings in the past few weeks, where those major concerns were aired and addressed by an ICANN exec who said there were safeguards in place, which had been produced with input from various stakeholders.

FTC Chairman Jon Leibowitz's recent comment that the TLD expansion could be "disastrous" for consumers was invoked by legislators and witnesses alike to buttress their argument for delaying the opening of that new window for filing for the new names, or at least start with a pilot program of a few new names.

In June, ICANN approved allowing virtually any top-level Internet endings, pushing beyond the current list of 22 to a virtually unlimited number, including branded names like, say, .aftra or .nab. As it now stands, applications for new endings will be accepted starting Jan. 12, 2012.

"We are aware of the FTC's concerns," said ICANN CEO Rod Beckstrom. "After hearing of Chairman Leibowitz' comments last week, ICANN met with him and committed to work cooperatively with the FTC and all stakeholders on matters of consumer protection. We will reaffirm that commitment when ICANN responds to the letter, which will be made public in keeping with our commitment to transparency."