Internet Commerce Association (ICA) was established in September 2006 following the .com settlement between the Internet Corporation for Assigned Names and Numbers (ICANN) and VeriSign. After reviewing that back room-negotiated no-bid perpetual contract, domain name monetization industry leaders concluded that permanent representation within ICANN, in Washington, and in other critical decision-making arenas was needed to protect its collective interests.

For more information regarding the ICA's activities on behalf of our membership, please view a copy of the ICA's 2008 Annual Report. To adequately represent our members, ICA activities have included---

Effectively Opposing “Anti-Phishing Consumer Protection Act” (S. 2661), introduced by U.S. Senator Olympia Snowe on February 25, 2008. would establish a parallel infringement system that is broader, less protective of registrant rights, and more punitive than the existing UDRP and national laws such as the U.S Anti-Cybersquatting Consumer Protection Act (ACPA). The ICA immediately –
initiated aggressive lobbying against this proposed measure;
provided its members and other domainers with an analysis of and position paper regarding the bill as well as information, including a suggested letter text, for effectively contacting members of the Senate;
and communicated with other groups resulting in statements against the bill from such organizations as the Electronic Frontier Foundation, Internet Governance project, and IP Justice.

While it appears unlikely that the Snowe bill can be enacted in the waning days of the 110th Congress trademark interests, including those represented by CADNA.org, are expected to seek the re-introduction of this proposal and similar legislation in the next Congress which commences in 2009. ICA is therefore remaining vigilant and continuing its dialogue with members of Congress, other key policymakers, and industry groups to help develop effective measures against phishing and other forms of online fraud that do not unfairly prejudice the legitimate rights of domain name registrants and that promote a reasonable balance between their rights and those of trademark owners.

ICANN Commercial and Business Users Constituency (BC) – ICA is actively involved in ICANN policy development, attending three yearly ICANN meetings, writing policy statements and speaking at ICANN meetings on many issues. In 2008, to better represent its members and their industry ICA applied to join the BC to become a part of ICANN’s formal policy development process. As our application to BC was considered, ICA attended the ICANN meeting in New Delhi, India in February 2008 and met with BC officers to resolve their concerns and answer their questions about our membership. An agreement was reached and ICA is now a Category 1international member with three votes in the BC. We now have an official voice in ICANN policy development at a critical time as ICANN considers a reorganization plan of the GNSO Council that would decrease the voting power of all commercial users of the internet.

ICA encouraged its members to attend and engage at the Los Angeles ICANN meeting held in October 2007 – the first meeting held within the continental U.S. since 2001 -- and provided detailed background materials to the many members who responded and attended the meeting to help make their participation more meaningful and effective. We plan to do this again for the next ICANN meeting to be held in Paris in June 2008.

Current ICANN policy issues of concern to ICA are (details are included later):

1. GNSO reorganization
2. No more RegisterFlys
3. End abusive domain name tasting
4. Sunshine for the GAC

Ethical Leadership – In September 2007 ICA promulgated a Member Code of Conduct that establishes a strong ethical framework for the domain name monetization industry. Through the adoption of this code, ICA seeks to demonstrate that industry self-regulation is the primary and effective means of assuring best practices and avoiding onerous new law and regulation. In February 2008, the ICA Board adopted a public membership list policy to improve accountability to the Code of Conduct. This new policy continues the effort to move the industry towards more transparent and ethical business practices initiated by establishment of the Code of Conduct.

U.S. Government – The U.S. Government plays a key role for domain name registrants. ICANN was created by the U.S. in 1998 and the U.S. continues to enjoy a unique oversight relationship with ICANN through operation of the Memorandum of Understanding (MOU). The U.S. also wields considerable influence within the GAC as well as the World Intellectual Property Organization (WIPO) and other multilateral bodies that affect Internet commerce and the protection of intellectual property (IP) rights. Finally, the U.S. often sets important precedents through its adoption and enforcement of new laws and regulations that establish the legal and policy framework for Internet commerce and IP enforcement. Therefore, ICA maintains a permanent office in Washington and actively seeks to inform Congress, the Executive Branch, and other key participants in U.S. policy development (e.g. think tanks and public interest groups) of the business models and public policy positions of the domain name investment and development community.

Since its creation ICA has provided formal input to Congress and the Executive Branch on a number of key issues. These activities include:

1. “Anti-Phishing Consumer Protection Act” (S. 2661) – Details on page 1
2. Midterm Review of the Joint Project Agreement (JPA) between the Department of Commerce and ICANN – In February 2008, ICA submitted a lengthy and detailed comment letter to NTIA and attended and spoke at a public meeting about ICANN performance. ICA held late that month. The ICA noted that ICANN was making positive progress but took the position that much more needed to be done before it could support termination of the U.S. oversight role. It also informed ICA members about the Department of Commerce’s (DOC) request for comments and the public meeting, provided background on JPA issues, and encouraged members to submit their own comments and attend the public meeting. An informal meeting was held for ICA members the evening before the NTIA public meeting, providing them with an opportunity to discuss JPA issues with ICA Counsel and providing them with information to help them participate more effectively in the public meeting.
3. Issuing a public statement in April 2007 decrying VeriSign’s announcement of an unjustified seven percent price increase for .com and .net DN registrations and calling for effective Congressional and DOC oversight. In particular, ICA noted that the .com increase was inconsistent with the “serve the public interest” standard established by the DOC when it approved the new .com registry agreement in November 2006.
4. Transmitting a letter to the Senate Commerce Committee in November 2006 applauding its bipartisan expression of concern over the .Com settlement and urging intervention against similar pending registry operation agreements.
5. Providing a record statement for the Senate Commerce Committee’s September 2006 oversight hearing on “Internet Governance: The Future of ICANN”. This statement raised concerns over ICANN’s lack of adequate transparency and accountability; objected to the unjustified price increases and perpetual renewal clauses of the then-pending registry agreements for .biz, .info, and .org; cited inadequate attention to Internet security; and urged near-term reform of ICANN practices through continuation and strengthening of the MOU.

ICA engages in constructive dialogue with members and staff of key Congressional committees exercising oversight over the Department of Commerce and dealing with trademark law and other IP matters. ICA has also discussed matters of concern to its members with senior staff of the Department of Commerce and the Patent and Trademark Office. Finally, ICA has joined and is a fully participating member of the Congressional Internet Caucus Advisory Committee – this organization is made up of a broad cross-section of the public interest community and Internet industry, and supports and encourages the Congressional Internet Caucus in its mission to educate policymakers about important Internet related policy issues.

Miscellaneous – In October 2007 ICA’s Counsel participated in a far-ranging discussion of how to best balance the rights of trademark owners and DN registrants at the annual Leadership Meeting of the International Trademark Association. The ICA will continue to engage in constructive dialogue and debate with the IP community and similar legal and business groups with an interest in and influence over Internet commerce and IP policies.

ICA’s Executive Director and Counsel also participate on a regular basis as speakers and panelists at various DN industry conferences and meetings in order to better inform professional DN registrants of the ICA’s priorities and activities and to seek their input. Our new website offers members a place to discuss policy issues and to provide their input to ICA on the issues that affect their businesses.

1. ICANN – ICA is continuously involved in policy development at ICANN. Issues that we face now and have addressed recently include:
2. No More RegisterFlys – ICA wants timely action to strengthen, adopt uniformly, and strongly enforce a revised Registrar Accreditation Agreement (RAA) to prevent any repetition of the RegisterFly fiasco, in which hundreds of thousands of domain names were lost. Just subsequent to its LA meeting ICANN announced the implementation of a new Registrar Data Escrow (RDE) program. The ICA will be carefully monitoring and providing input to ICANN as it continues the process of developing amendments to the RAA, a subject that is likely to be on the agenda of the June 2008 Paris meeting .
3. End Abusive Domain Tasting – ICA called upon ICANN and the gTLD registries to undertake market-based initiatives to eradicate abuses of the add/delete grace period (AGP). At the New Delhi meeting ICA applauded the ICANN board for referring to the budget committee a proposal to make the ICANN fee for domain name registrations non-refundable; and went beyond that by publicly calling on all gTLD registries, particularly VeriSign, to impose restocking or other similar fees to eradicate abusive tasting and all kiting. NeuStar and Afilias have responded with requests to limit deletions under AGP for .biz and .info. VeriSign have yet to take such action, and the ICA will continue to speak out on this issue. The ICANN Board is expected to adopt the non-refundable fee proposal at its Paris meeting.
4. Oppose The New DRP – ICA successfully opposed adoption of a proposed new Dispute Resolution Process (DRP) for the multitude of new gTLDs that ICANN contemplates authorizing from 2008 forward. The proposed DRP would have deprived DN registrants of procedural and substantive due process rights they enjoy under the current Uniform Dispute Resolution Process (UDRP). At the LA meeting the GNSO rejected adoption of the new DRP. However, ICANN’s Government Advisory Council (GAC) may seek to revive it in some form. Further, ICANN continues to develop the details for rollout of new gTLDs. The ICA will continue to carefully monitor and comment upon this process to assure that the introduction of new gTLDs is not accompanied by a diminution of registrant rights.
5. Sunshine For the GAC – ICA publicly calls upon the ICANN Board to eliminate the closed door meetings of its Government Advisory Committee. The GAC is one of the two primary bodies providing policy input to the ICANN Board (the GNSO being the other) and appears to be exercising a growing influence over ICANN policies and decisions, sometimes supporting positions that are adverse to the interests of commercial domain name registrants. ICANN has committed to achieving greater transparency and accountability in its current Memorandum of Understanding (MOU) with the U.S. Department of Commerce (DOC), and the GAC’s secret sessions are at complete odds with that commitment. Further, given the possibility that the U.S. may terminate or reduce the scope of the MOU when the current agreement expires in September 2009, and ICANN’s own active exploration of converting from a California-based non-profit corporation to a Private International Organization (PIO), the GAC may wield even greater influence over ICANN in coming years – making the need for public scrutiny and accountability even greater. While the ICANN Board has not committed to GAC transparency the ICA will continue to press toward this goal – and stated in its submission to DOC that it could not support termination of the JPA until the GAC operates in a transparent manner..

The ICA has also submitted numerous detailed comment letters to the ICANN Board on a wide variety of issues of importance to DN owners, including:

• Objections to the presumptive renewal and non-justified price increase provisions of the .biz, .info, and .org registry agreements; while the agreements were ultimately approved by the ICANN Board, ICA’s strong opposition did result in the elimination of differential pricing that would have levied higher annual fees on more valuable DNs.
• Suggestions as to how ICANN can reform its managerial operations to achieve greater transparency and accountability.
• Objections to the proposed .xxx adult content TLD contract proposal because of the many undesirable precedents it would have established, including the establishment of a “tax” on registrants for purposes unrelated to registry operations as well as an expansion of ICANN authority into consumer protection, content regulation, and other matters far beyond its proper role of technical manager of the DNS. The .xxx contract was subsequently rejected by the ICANN Board.
• Calling on ICANN in January 2007 to immediately address the RegisterFly collapse and provide timely information and meaningful assistance to adversely affected DN registrants; ICANN made its first public statements on this matter shortly thereafter, and has subsequently assisted affected DN registrants while starting the process to strengthen the RAA.
• Supporting the proposal of Public Interest Registry (PIR) to impose a restocking fee on excess DN deletions to curb abusive DN tasting at .org. PIR subsequently implemented this fee and has reported the virtual eradication of tasting at .org.
• Opposing a DRP for new gTLDs that would curtail existing rights for DN registrants provided by the existing UDRP; the DRP has been at least temporarily sidetracked.
• Supporting the adoption of a new Operational Point Of Contact (OPOC) policy to protect the privacy rights of DN registrants while requiring WHOIS proxy services to respond quickly and meaningfully to legally valid requests for registrant contact information. Unfortunately, IP interests defeated adoption of OPOC at the fall 2007 LA meeting through a massive lobbying campaign. But issues related to WHOIS, particularly as it intersects with national privacy laws, remain a major consideration for ICANN.

Looking Toward The Future – While ICA has accomplished much on behalf of professional DN registrants during its brief existence, new challenges await and much more remains to be done---

• If the Snowe bill fails to become law, trademark interests will probably launch further efforts in Washington and internationally to change trademark law to the detriment of domain name registrants fighting attempts to reverse hijack their valuable names.
• Domain name registrants are increasingly requesting that the ICA provide financial and legal support for precedent-setting actions against reverse-hijacking attacks under the UDRP and national laws such as the ACPA. The ICA Board is in favor of providing support for qualifying cases and appeals that set critical precedents for the entire industry. We will do more in this area as financial support grows.
• There remains a continuing need for the ICA to engage the full time assistance of public relations specialists to explain its members’ business activities and its own policy positions to the media, and to highlight innovative and beneficial domain name activities. This need is particularly acute for critical “inside-the-beltway” publications that influence public policy decision makers in Washington.
• As the Internet is a global telecommunications and data transmissions system the ICA must be able to monitor and participate in relevant discussions and decisions taking place in Brussels (European Union – EU), Geneva (WIPO), and all other locations where the future of Internet commerce and domain name registrant rights are being decided.

The ICA needs continued strong support and feedback from its current members, as well as broader support and participation from the entire professional DN registrant community, if it is to continue and expand its vital work. We thank you for your support and interest and look forward to continuing to be your vigorous advocate within ICANN, in Washington, and in all other key decision centers affecting domain name registrants.

For further information about ICA membership and activities, please contact:

Philip Corwin, Counsel

The ICA operates as a Business League under Section 501(c) (6) of the Internal Revenue Code. United States residents cannot deduct membership dues or contributions (such as donated domain names, or the proceeds of the auction of such names) as a charitable contribution for Federal income tax purposes. However, for U.S. tax law purposes, dues and donations to a business league (including non-cash donations) are generally deductible as a business expense, except for that portion that is devoted to lobbying and political campaign expenditures. The ICA does not anticipate incurring any political campaign expenditures in 2008 and estimates that the portion of dues and donations devoted to nondeductible lobbying expenses as defined in U.S. tax law will be in the range of 10-20%. ICA is required to provide its members with an estimate as to the percentage of members’ dues which will be devoted to lobbying expenditures during 2008. ICA will provide this estimate of the lobbying percentage for the year 2008 as soon as feasible.

The above general information may not be relied upon as tax advice, and any affected ICA member or donor should consult with the member’s own tax adviser regarding the proper treatment of their ICA support under the tax laws of the U.S. or any other nation. In particular, affected ICA members should consult with their tax advisers as to whether the excess of the auction sale price for a donated domain name, over the member’s cost for the domain name, should be reported as income or gain to the member for U.S. Federal income tax purposes.