[CCT-Review] Competition, Consumer Trust, and Consumer Choice Review Team Final Report Jonathan Zuck Sun Sep 9 13:18:21 UTC 2018 • Previous message: [CCT-Review] Well... • Next message: [CCT-Review] Appreciation • Messages sorted by: [ date ] [ thread ] [ subject ] [ author ] Dear Cherine Chalaby, On behalf of the Competition, Consumer Trust, and Consumer Choice (CCT) Review Team and pursuant to the ICANN Bylaws Section, attached is the CCT Final Report and Recommendations for submission to the ICANN Board of Directors. The report examines the extent to which the introduction of new generic top- level domains (gTLDs) has promoted competition, consumer trust and consumer choice in the domain name system. It also assesses the effectiveness of the safeguards ICANN has implemented to mitigate issues related to the introduction of new gTLDs, and the Program's application and evaluation process. We would like to thank the entire ICANN Community, the ICANN Board, for thoughtful engagement and feedback throughout the process. Kind regards, Jonathan Zuck Chair of the CCT Review Team Jonathan Zuck | Executive Director | Innovators Network -------------- next part -------------- An HTML attachment was scrubbed... URL: <http://mm.icann.org/pipermail/cct- review/attachments/20180909/0695801f/attachment-0001.html> COMPETITION, CONSUMER TRUST, AND CONSUMER CHOICE REVIEW Final Report Competition, Consumer Trust, and Consumer Choice Review Team 8 September 2018 ICANN | COMPETITION, CONSUMER TRUST, AND CONSUMER CHOICE REVIEW | September 2018 | 1 TABLE OF CONTENTS 1 EXECUTIVE SUMMARY 5 Background 6 Competition and Consumer Choice 7 Consumer Trust and Safeguards 8 Application and Evaluation 10 Rights Protection Mechanisms 10 Recommendations 12 Data Gathering 12 ICANN Contractual Compliance 12 Conclusion 13 2 CCT REVIEW TEAM RECOMMENDATIONS 14 3 BACKGROUND ON THE COMPETITION, CONSUMER TRUST, AND CONSUMER CHOICE REVIEW 26 4 HISTORY OF THE NEW GTLD PROGRAM 29 History of the Expansion of the DNS Prior to 2000 29 Previous gTLD Expansions 30 Background of the 2012 New gTLD Program 30 5 DATA-DRIVEN ANALYSIS: RECOMMENDATIONS FOR ADDITIONAL DATA COLLECTION AND ANALYSIS 32 Recommendation 33 Competition and Consumer Choice 33 Consumer Trust/Safeguards 34 6 COMPETITION 36 Economic Framework for Competition Analysis 37 The Structure of the TLD Industry 41 Effect of New gTLD Entry on Industry Concentration 48 Concentration Among Registry Operators 50 Recommendations 52 A Prototype Country-Specific Analysis 52 Measures of Concentration Worldwide and in the LAC Region 54 Concentration Among Registrar Owners 54 Concentration Among Back-End Providers 54 Price Analysis 55 Recommendations 58 Potential Impact of “Parked” Domains on Measures of Competition 60 Geographic Differences in Parking Behavior 63 Relationship Between Parking and DNS Abuse 64 Recommendations 65 7 CONSUMER CHOICE 67 Previous Studies 68 CCT Analysis 68 CCT Analysis: Trademarks and Defensive registrations 70 Recommendations 71 ICANN | COMPETITION, CONSUMER TRUST, AND CONSUMER CHOICE REVIEW | September 2018 | 2 Benefits vs. Confusion to End-users 73 Registry Policies 74 Recommendation 76 8 CONSUMER TRUST 78 Background 78 Awareness and Visitation 78 Expectations about Relationship of gTLD Name to Websites Using that gTLD 79 Public Trusts Legacy gTLDs More Than New gTLDs 80 Consumer Behavior That Indicates Trust 81 Registration Restrictions Contribute to Trust 82 Consumer Trust in the Domain Name System Overall Since the Introduction of New gTLDs 82 Conclusions 83 Recommendations 83 Further Review 86 9 SAFEGUARDS 88 DNS Abuse 88 Impact of Safeguards 102 Recommendations 105 Mitigating Abusive Activity 106 Security Checks 107 Making and Handling Complaints 108 Recommendations 109 Safeguards for Sensitive and Regulated Strings 110 Recommendations 111 Safeguards for Highly-Regulated Strings 113 Recommendations 115 Special Safeguards Related to New gTLDs with Inherent Governmental Functions and Cyberbullying 116 Recommendations 117 Restricted Registration Policies 117 Public Interest Commitments 118 Recommendations 123 Rights Protection Mechanisms 124 INTA Impact Study 129 ICANN Competition, Consumer Trust, and Consumer Choice (CCT) Metrics Reporting 132 Conclusion 136 Recommendations 138 10 APPLICATION AND EVALUATION PROCESS OF THE NEW GTLD PROGRAM 141 Applications and the “Global South” 141 Program Outreach 142 Applicant Informational Support 143 New gTLD Application and Program Costs 144 Recommendations 144 Improved Outreach 145 Informational Content 145 Program Costs 145 Recommendations 146 Preventing Delegations That Would Be Confusing or Harmful 147 ICANN | COMPETITION, CONSUMER TRUST, AND CONSUMER CHOICE REVIEW | September 2018 | 3 Recommendation 149 Allowing Specific Communities to Be Served by a Relevant TLD 151 Recommendation 152 Effectiveness of the Dispute Resolution Process in Cases of Formal String Objection 153 Recommendation 156 11 APPENDICES 158 Appendix A: Glossary of Terms 158 Appendix B: Review Process 161 Appendix C: Surveys and Studies 164 Appendix D: Public Comments 167 Appendix E: Terms of Reference 169 Appendix F: Fact Sheets 177 Appendix G: Participation Summary 179 Appendix H: Possible Questions for a Future Consumer Survey 180 Appendix I: Bibliography 182 ICANN | COMPETITION, CONSUMER TRUST, AND CONSUMER CHOICE REVIEW | September 2018 | 4 1 Executive Summary ICANN's Affirmation of Commitments (AoC) called for a regular review of the degree to which the New Generic Top-Level Domain (gTLD) Program promoted consumer trust, choice and increased competition in the Domain Name System (DNS) market. This review is called the Competition, Consumer Trust, and Consumer Choice Review (CCT).1 The AoC further called on the CCT reviews to evaluate the effectiveness of the application and evaluation process for new gTLD applicants and the safeguards put in place to mitigate the risks associated with the expansion of generic top-level domains. These reviews are important because they provide ICANN with an assessment of how the new gTLD round performed in these areas and guidance on key issues (including competition, consumer protection, security, malicious abuse, and rights protection issues) as it contemplates further increase in the number of top- level domains (TLDs). The CCT was asked to weigh the advantages and disadvantages of the New gTLD Program in these key areas and assess whether the Program resulted in net benefits to users of the DNS. The review team endeavored to be as objective as possible and to base its findings on available data. The more objective the findings, the more likely the impact of implemented recommendations can be measured. The idea of using metrics to evaluate the performance of the DNS began six years ago with an ICANN Board resolution2 that called on the community to identify quantitative targets to assess the impact of the New gTLD Program on consumer trust, choice, and competition in the DNS marketplace. Although the particular metrics developed at that time aided the review team's analysis, they ultimately did not form the basis for the majority of the review. However, the CCT Review Team did strive to employ quantitative analysis wherever possible. The CCT Review Team found that while the New gTLD Program is quite new and the data are incomplete, on balance the expansion of the DNS marketplace has demonstrated increased competition and consumer choice and has been somewhat successful in mitigating its impact on consumer trust and rights (particularly trademark) protection. That said, the review team concluded that the New gTLD Program should be regarded only as a “good start,” and that a number of policy issues should be addressed before any further expansion of gTLDs. In particular, the review team found that critical data were in short supply for the analysis of competition, the effectiveness of safeguards, and the promotion of consumer trust and geographic representation of applicants. Even the definition of the DNS market itself is problematic without additional information about whether consumers view new gTLDs as substitutes for other domain names, such as country code top-level domains (ccTLDs). Some gTLDS compete in narrow markets that serve specialized groups of registrants, and alternative online identities such as Facebook and Yelp pages and third-level domains may serve as substitutes for registrations in gTLDs. Consequently, the CCT Review Team recommends that ICANN enhance its capabilities to gather and analyze data, in particular those used by ICANN's Contractual Compliance Department, prior to further increasing the number of gTLDs. We also identify certain policy issues that the community should resolve prior to the 1 On 30 September 2009, ICANN and the United States Department of Commerce signed the AoC, which— among other things—committed ICANN to periodically organizing Community-led review teams to assess the impact of the New gTLD Program on the domain name marketplace. In January 2017, the AoC expired following the IANA transition in October 2016. However, many of the provisions contained in the AoC—including Community-led reviews of competition, choice, and trust in the domain name marketplace—have been incorporated into ICANN’s revised bylaws (see ICANN, “Bylaws for Internet Corporation for Assigned Names and Numbers: Section 4.6: Specific Reviews,” amended 1 October 2016, https://www.icann.org/resources/pages/governance/bylaws-en/#article4). 2 ICANN Board Resolution 2010.12.10.30, “Consumer Choice, Competition and Innovation,”