.Inc Applicant Prevails Against Domain System Coordinator

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By Alexis Kramer

Aug. 15 — The board of the non-profit entity that coordinates internet operations didn't exercise due diligence when it chose not to reconsider whether an applicant for the .inc, .llc and .llp top-level domains should have priority status over competing applicants, according to an independent review panel declaration.

The board of the non-profit Internet Corporation for Assigned Names and Numbers has accepted the panel's declaration.

The board's resolution coincides with ICANN's Aug. 12 announcement that it is ready to shift away from U.S. government oversight of technical internet functions ( see related story ).

The lead attorney for the applicant, Dot Registry LLC, told Bloomberg BNA Aug. 15 that if ICANN is to assume responsibility for regulating the “global resource” that is the internet, it has a duty to do so in a precise and transparent manner.

The panel's decision is significant because it “lays out in detail what has really been going on within ICANN and how the board operates,” said Arif H. Ali, a partner at Dechert LLP in Washington who co-chairs the firm’s international arbitration practice and has represented clients in several domain disputes against ICANN.

“The board accepted the panel's decision but it now needs to remedy the wrong,” Ali said. In the midst of the impending transition, the action that the board takes is “critical,” he said.

The ICANN board said it will consider next steps in relation to the reconsideration request of Dot Registry before taking further action.

Community Priority Results Challenged

Dot Registry applied to operate .inc, .llc and .llp on behalf of the U.S. corporate community. An independent evaluation of Dot Registry's applications determined that the applicant didn't meet the necessary criteria to receive priority status over the other applicants—which would have allowed the community applicant to operate the domain. Among other things, the evaluating panel said Dot Registry failed to show that incorporated companies, limited liability companies and limited liability partnerships would associate themselves as being apart of a community.

ICANN's Board Governance Committee denied in 2014 Dot Registry's request to reconsider the results of the evaluation. The applicant then invoked ICANN's independent review process—a pre-established mechanism designed to check ICANN actions—to challenge ICANN's handling of the community priority determination.

An independent review panel held in a 2-1 declaration that the board failed to abide by its transparency obligations in denying Dot Registry's reconsideration request.

In a resolution issued Aug. 9 and posted to ICANN's site Aug. 11, the board said it considered the declaration as required and “takes very seriously the results of one of ICANN's long-standing accountability mechanisms.”

The declaration directed ICANN to pay $235,000 to Dot Registry upon determination that all administrative fees and expenses previously incurred by Dot Registry have been paid in full.

To contact the reporter on this story: Alexis Kramer in Washington at akramer@bna.com

To contact the editor responsible for this story: Keith Perine at kperine@bna.com

For More Information

Full text of the board's resolution at http://src.bna.com/hKa

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