Bloomberg News

Web-Name Expansion Could Be ‘Disaster,’ FTC Head Says

December 09, 2011

(Corrects second editor responsible, in staff credits at bottom of story)

Dec. 7 (Bloomberg) -- A plan to add hundreds of Internet domain names beyond .com and .net could be a “disaster,” U.S. Federal Trade Commission Chairman Jon Leibowitz told a House Judiciary subcommittee.

The program is more costly than necessary for businesses and would allow con artists to set up fraudulent websites, Leibowitz said today during a hearing of the House Subcommittee on Intellectual Property, Competition and the Internet.

The domain-name system expansion, authorized by the Internet Corporation for Assigned Names and Numbers, “could be very harmful,” Leibowitz said. “We see enormous cost to consumers and businesses and not a lot of benefit.”

Icann, a non-profit that manages the Web’s address system under a U.S. Commerce Department contract, approved a plan in June to expand the number of top-level domains beyond the commonly used .com, .net and .org in a move to spur online innovation.

The group will start accepting applications for Web suffixes including company and brand names, cities and words like .book or .shopping, starting Jan. 12 for a three-month window. Applications will cost $185,000 per domain.

General Electric Co., Johnson & Johnson and Coca-Cola Co. are among more than 40 companies that last month joined with the Association of National Advertisers to oppose the expansion, saying it will increase costs for companies, confuse customers and create new risks of Internet fraud.

The Senate Commerce Committee is scheduled to hold a hearing tomorrow on the domain expansion program, with witnesses from Icann, the Commerce Department and the advertisers’ group.

The FTC does not have authority over Icann. The FTC has the power to act when companies engage in unfair and deceptive trade practices.

--Editors: Michael Shepard, Timothy Franklin

To contact the reporters on this story: Eric Engleman in Washington at eengleman1@bloomberg.net; Jeff Bliss in Washington at jbliss@bloomberg.net

To contact the editors responsible for this story: Michael Shepard at mshepard7@bloomberg.net; Mark Silva at msilva34@bloomberg.net


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