Internet domain-name expansion may be a ‘disaster,’ FTC head says

A program to add hundreds of Internet domain names beyond .com and .net may 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 let con artists set up fraudulent websites, Leibowitz said Wednesday in 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 nonprofit 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 for each domain.

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

“We appreciate the concerns raised by Chairman Leibowitz,” said Brad White, a spokesman in Washington for Marina del Rey-based Icann.

“Icann has already committed to vigilantly monitor for abuses” to the new domain program, White said. “If and when any program abuses arise, there are mechanisms in place to address them.”

The Commerce Department is “sensitive to the concerns being raised by some companies” about the introduction of new top-level domains, Assistant Secretary of Commerce Lawrence Strickling said.

“We will closely monitor the execution of the program and are committed to working with stakeholders, including U.S. industry, to mitigate any unintended consequences,” Strickling said.

The FTC doesn’t have authority over Icann. The agency has the power to act when companies engage in unfair and deceptive trade practices.