Bloomberg News

Internet Overseer Should Review Ethics Policy, Ad Group Says

October 03, 2011

(Adds background on domain-name expansion in fourth paragraph.)

Oct. 3 (Bloomberg) -- The organization that manages the Internet’s domain-name system should conduct a “systematic review” of its ethics policies, according to a group representing large corporations and advertisers.

The failure of the Internet Corporation for Assigned Names and Numbers to close “numerous loopholes” in its conflict-of- interest policy “would raise the most profound questions as to the ability of ICANN to represent the public interest,” Robert Liodice, president of the Association of National Advertisers, wrote in an Oct. 2 letter to Icann chief executive officer Rod Beckstrom.

ANA, which represents more than 400 companies including Apple Inc. and General Motors Co., also sent the letter to officials at the White House and U.S. Commerce Department, as well as members of the U.S. Senate and House.

Icann, a nonprofit group that operates under a Commerce Department contract, approved a plan June 20 to allow potentially hundreds of new Web suffixes such as .bank and .nyc to spur online innovation. The ANA and other industry groups have said the domain-name expansion will confuse consumers and increase costs for businesses.

Four days after Icann’s vote, Peter Dengate Thrush, the organization’s chairman, finished his term and within a month joined a London company called Top Level Domain Holdings Ltd., which intends to acquire Web suffixes created by the new plan and offer Internet registry services.

Watchdog Criticism

Dengate Thrush’s move and that of another former Icann employee who joined the Financial Services Roundtable, a Washington-based lobbying group whose members include Bank of America Corp. and JPMorgan Chase & Co., have drawn criticism from government watchdogs.

Icann, based in Marina del Rey, California, oversees 22 generic top-level domains, known as gTLDs, including the .com, .org and .net suffixes, which together account for almost 120 million Internet addresses.

The group has about 130 employees, including 10 in Washington, and operates under a zero-dollar contract with the Commerce Department. It collects fees from companies such as VeriSign Inc. and GoDaddy.com Inc. that generate revenue by helping businesses and consumers obtain domain names. For the year ended June 30, Icann reported $68.3 million in revenue, much of it from fees.

Senator Ron Wyden, an Oregon Democrat, has called on the Commerce Department to include ethics and conflict-of-interest rules in any future contract to manage the domain-name system.

The National Telecommunications and Information Administration, which is part of the Commerce Department, plans to open the Icann-held contract for bidding this fall, and has said it is considering adding conflict of interest rules.

--Editors: Michael Shepard, Allan Holmes

To contact the reporter on this story: Eric Engleman in Washington at eengleman1@bloomberg.net

To contact the editor responsible for this story: Michael Shepard at mshepard7@bloomberg.net


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