The Voice of e-Commerce

Friday, November 03, 2006

Internet Governance: Game On. I’ve never thought of United Nations as particularly effective, but I have to admit they know something about organizing an international meeting of multiple stakeholders to facilitate consensus through a multilingual bottom-up dialogue. That is, these UN regulars know how to voice indignations and raise expectations. Generating action and delivering results is another thing entirely. Still, this first meeting of the Internet Governance Forum (IGF) showed me that the UN intends to have a role in managing the Internet, so those of us in the private sector and ICANN had better be on-guard. The buzz rising from the floor included calls for financial assistance and more multi-national management of the Internet Domain Name System (DNS). Cuba’s representative gave an evocative account of economic hardships in his country, reminding everyone that that Internet access is up a bit higher on Maslow’s hierarchy of human needs. Cuba blamed the 50-year U.S. embargo for its anemic economy, and demanded that the developed world “share the costs” of building Cuba’s capacity to use the Internet. Iran’s delegate dulled our senses with long diatribes against the developed world, calling for an “equitable distribution of resources” to help more Iranians access the Internet. I can’t wait to see Iran’s plan for “equitable distribution” of their oil and gas reserves, too. To help these developing nations build Internet capacity, the Diplo Foundation suggested a $10 tax on every domain name registration. Presumably, the world would ask ICANN and its registries and registrars to collect this tax, a responsibility that none would welcome warmly. Iran was joined by Brazil, Cuba, and others in demanding that IGF explore a new, multi-national body to take over management of the DNS. At one workshop, the Third World Network called ICANN’s management “illegitimate” and complained that root zone oversight allows a “single point of abuse.” Their solution is to create alternate roots, a plan deemed unworkable by experienced DNS operators. To reduce the anguish over U.S. oversight of the DNS, Marilyn Cade described a plan to add transparency and multi-national review to ICANN processes for changing top level domain delegation. But the anti-ICANN crowd here is against leaving any DNS control in the hands of the private sector or U.S. government. On a more positive note, there was broad demand for multiple language support in top-level domain names. ICANN was criticized about the lack of Internationalized Domain Names (IDN), so I expect we’ll see some new urgency about this when ICANN meets in Brazil next month. This first IGF meeting was more about rhetoric than results, but I get the clear impression that this United Nations machine is just warming-up for a long-term battle over Internet Governance. They’re keen to relieve the private sector of its management role, but the UN has forgotten that the private sector built every aspect of Internet infrastructure that’s worth managing.

Tuesday, October 31, 2006

Relax. The United Nations is here to save the Internet I’m in Athens (Greece) for the first meeting of the Internet Governance Forum (IGF), a United Nations initiative to increase international oversight and capacity for governing the Internet. Makes you wonder how the private sector managed to invest a trillion dollars to serve a billion people on the Internet thus far, without the benefit of UN “governance”. But something as big as the Internet just begs to be governed, so here we are. To be sure, the IGF crowd is gathered here to talk about some very worthy goals for the Internet: openness, security, diversity, and access—all focused on the needs of developing nations. But whenever the UN convenes a meeting about the Internet, thoughts turn to taking over the role of ICANN (Internet Corporation for Assigned Names and Numbers), even though ICANN has only a limited technical role in managing the domain name system. That’s why I’ve come to Athens—to provide a kind of firewall to shield ICANN from having its job usurped or expanded by the UN, governments, and civil society advocates. So far, the ICANN firewall is holding up under an expected and relatively mild assault. Yesterday, Iran’s Dr. Riazi insisted that IGF focus on stripping root server oversight away from the U.S. government. Although the moderator called this issue “the elephant in the room,” none of the panelists has yet to suggest that root server oversight is a concern or that it plays any role in achieving the goals of the IGF. Yin Chen of China’s Ministry of Information Industry warned that his nation would not allow the Internet to threaten national security or influence the psychological development of China’s youth. Kids in China can’t be too happy about that, and I shudder to think of China and Iran marshalling their allies to enlist ICANN in blocking offending websites. Today, The Diplo Foundation questioned whether market forces can be trusted to preserve free flow of information on the internet. Those same market forces helped create an explosion of freedom and diversity in information and communications on the Internet, and the private sector continues to be the driving force at ICANN. Privacy advocates took some shots at ICANN for its Whois service, a tool used in consumer protection investigations and to help trademark owners find cybersquatters. While some want to limit use of Whois data, a wise man from Japan’s IT industry said ICANN should enhance Whois to help track-down sources of spam and security threats. Tomorrow’s forums will focus on improving access and diversity. Expect ICANN to be called on the carpet for failing to implement multilingual characters in top level domains, a responsibility that rightly belongs with ICANN. And we’re likely to hear calls for getting ICANN into the access business—perhaps a domain name tax to fund infrastructure in developing nations? Stay tuned.

Thursday, October 12, 2006

Whose Ticket Is It, Anyway? New York’s Consumer Protection Board held a hearing last week on the resale market for tickets to entertainment and sporting events. In New York, the market for event tickets is a morass of complexity and corruption, and cries out for the kind of competition and transparency that e-commerce can provide. In 1999, state Attorney General Elliott Spitzer shined a bright light on the shady underground market in New York City, where most high-demand theater and concert tickets are diverted by industry insiders using “corrupt” and “unfair” methods. Based on the Attorney General report, New York’s legislature liberalized the ticket scalping laws last year, making it legal (at last) for you to sell your ticket at up to 45% over face value. But the new law expires next spring, so the Consumer Protection Board is holding hearings to assess the situation and recommend new legislation. Here’s a summary of my testimony: Eliminate price caps for all primary and secondary ticket sellers. If ticket owners are restricted on how and where they can resell, fewer tickets will be available for resale. And for most New Yorkers, the resale ticket market is the only way that they can catch a live game in Yankee Stadium, at Shea, or at Giants Stadium, where season tickets are sold out for the next 25 years. Moreover, an open market will allow flexibility for venues, entertainers and teams to price original tickets closer to true market value. Prior state law prohibited innovative pricing methods and web auctions to capture some of the markups that go to secondary market speculators. Prohibit venues and teams from adding resale restrictions to their ticket policies. Ticket owners should not be forced to use only a venue-approved service to resell their tickets. If you bought the ticket, you have a legitimate property right for that seat, and you should be free to sell that right for any price and on any exchange. Consider this analogy to a similar property right that’s protected in New York: Venues, entertainers, and teams sell tickets in ways that are similar to how landlords rent their apartments. Both want to restrict consumer behavior, whether in a theater, stadium, or a post-war apartment in Brooklyn. Entertainment venues often prohibit concert-goers from bringing in outside food and beverages, just as landlords tell tenants “no dogs allowed”. New York law, however, does not allow apartment landlords to restrict open markets in sublets. In 1983 the New York legislature said that apartment landlords cannot unreasonably deny tenants the right to sublet their apartments. Given that the Yankees have begun “evicting” season ticket owners for reselling their own tickets, New York needs to ensure that ticket owners are allowed to resell tickets on any exchange—not just a service that’s exclusively authorized by venues, entertainers, and teams. Other Testimony eBay, StubHub, and RazorGator testified about their single-minded focus on building consumer trust in online ticket transactions. These exchanges aggressively enforce safe trading policies, and have proven to be ideal partners for state regulators charged with enforcement of consumer protection laws. The most amazing testimony came from an attorney for the NFL, who came to tell us why the NFL wants total control and restrictions on resale of game tickets. She actually said that ticket resale is hurting teams like the Buffalo Bills, who can’t always reach sell-out status for home games, so they can’t show these games on local television—according to the league’s “blackout” rules. Got that? The NFL wants to stop you from re-selling your own tickets, because of a rule set BY THEIR OWN LEAGUE that cuts into their television revenue! The NY legislature will take this up next spring, as will several other states that restrict ticket resale. Join NetChoice to stay informed and be ready to tell your legislators that an open ticket market is the best policy.

Wednesday, August 30, 2006

Hurricane Season on the Internet What would happen in the event of a catastrophic disruption of the Internet? Is the U.S. adequately prepared to handle or recover from a “cyber-Katrina” type of disaster? According to a the Business Roundtable, an influential group of 160 CEOs with nearly $5 trillion in revenues, the U.S. is not adequately prepared for a major attack, software incident, or natural disaster that would lead to disruption of the Internet. According to the reportEssential Steps Toward Strengthening America’s Cyber Terrorism Preparedness—there are clear cyber shortfalls similar to the disaster response problems that occurred following Hurricane Katrina, including inadequate early warning systems, unclear and overlapping responsibilities among public and private organizations and insufficient resources. We have no coordinated plan to restart and restore the internet—and this could have immediate and nationwide consequences to our nation’s security and economy. We need to be better prepared. To recover from a cyber disaster, public and private sectors will need to collaborate on preparations and responses. Otherwise, separate and uncoordinated responses by government and business could delay recovery and create new problems. This is the ideal opportunity for ICANN (the Internet Corporation for Assigned Names and Numbers) to coordinate with other security groups and plan our response to cyber disasters. At a minimum, ICANN should help clarify roles and responsibilities for public and private operators of the Internet. ICANN can’t wait to start planning a response, because when it comes to the Internet, it’s always hurricane season.

Thursday, July 27, 2006

U.S. Management of the Internet: Where does it stand? Yesterday, the Department of Commerce held a public meeting to discuss progress made by ICANN (the Internet Corporation for Assigned Names and Numbers) in managing the Internet’s domain name system. ICANN is currently operating the Domain Name System (DNS) under an agreement with the U.S. government. That agreement expires this September. The Commerce Department meeting was intended to let stakeholders comment on whether ICANN is ready to become the standalone manager of the DNS universe. My comments echoed the overwhelming sentiment expressed at the hearing: “ICANN is not now ready to go it alone.” One major concern of private sector stakeholders is that ICANN is not yet strong and independent enough to withstand pressure from governments and groups like the United Nations. Another concern is whether ICANN can ensure security and stability of the Internet. e-Commerce leaders are particularly concerned that security risks and abusive practices in the domain name marketplace are overwhelming ICANN’s ability to implement new policies and reforms. There was also a lot of talk regarding the need for openness and transparency of ICANN. As ICANN formulates policies it is paramount that key stakeholders are more effectively involved in the ICANN process. ICANN’s processes should be changed to improve the reach, timeliness and relevance of stakeholder involvement. The bottom line is that the transition period needs to be extended beyond this September. ICANN is simply not now ready to manage the domain name system on its own.

Sunday, June 25, 2006

June 25, 2006 MARRAKECH, MOROCCO Just arrived in Marrakech for the ICANN (Internet Corporation for Assigned Names & Numbers) meeting here this week. Brought some desert-friendly clothes and a copy of NetChoice's agenda for what ICANN should do to promote and protect e-commerce: Insist on Security & Stability. Domain name hijacking can shut-down a small business that counts on e-commerce. And too many businesses are hammered by domain attacks the instant that renewal grace periods have lapsed. ICANN must streamline its process for developing new policies to combat attacks on Internet security and stability. Stop Domain Name Abuse. Cyber-squatting and typo-squatting are confusing to potential customers and are driving-up domain name costs for small businesses. Too many small businesses fall prey to “slamming” when a competing registrar sends a misleading renewal invoice. And when a domain name accidentally expires, owners are forced to pay exorbitant reinstatement fees. ICANN needs to develop and implement policies to stem these kinds of abuses in the domain name marketplace. Don’t let WhoIs become WhoKnows? Small business counts on domain name Whois to identify potential trademark infringement, piracy, and counterfeiting. Whois can help stop phishing scams that are undermining consumer confidence in the Internet. ICANN must maintain the current function and value of Whois. Don’t Splinter the Internet. The Internet works because it requires unique addresses that resolve reliably. We can’t have nations “splinter” the internet just to implement their own languages or content rules. ICANN must move ahead with initiatives such as Internationalized Domain Names and special-purpose domains like XXX. The Internet needs a Manager—not a “Governor”. ICANN manages the domain name system via contracts and policies, while leaving it up to individual governments to make rules on issues like privacy and online content. But if ICANN expands its role into broader governance areas, it invites governments to covet its rightful role as the Internet’s technical manager. ICANN should stick to its mission. More to come as this meeting progresses.

Tuesday, June 20, 2006

Welcome to the NetChoice Coalition Blog. NetChoice is a coalition of e-consumers, e-commerce companies, and trade associations dedicated to promoting convenience, choice and commerce on the Net. This blog will dicuss some of the key issues affecting e-commerce, including taxation, regulation and fraud.