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ICANN is receiving mixed messages from the US government over its plans to dramatically expand the number of top-level domains available on the internet.

The Federal Trade Commission on Friday became the highest-profile objector to the so-called new gTLDs program, saying it threatens to increase fraud and phishing.

"A rapid, exponential expansion of gTLDs has the potential to magnify both the abuse of the domain name system and the corresponding challenges we encounter in tracking down internet fraudsters," FTC's four commissioners said in a letter to ICANN's leadership.

"Fraudsters will be able to register misspellings of businesses, including financial institutions, in each of the new gTLDs, create copycat websites, and obtain sensitive consumer data with relative ease before shutting down the site and launching a new one," they wrote.

The FTC wants the program, which currently has no limits on the number of top-level addresses that may be launched, dramatically scaled back to controlled pilot.

The objection came just a couple of days after several congressmen called on ICANN to delay the programme, which is on track to open up for applications on 12 January.

“I don’t think it’s ready for prime time,” Representative Anna Eshoo said during a hearing of the House Energy & Commerce Committee on Wednesday. “I suggest that it is delayed until consensus is developed among relevant stakeholders.”

Her thoughts were echoed by other committee members, and were warmly welcomed by the Association of National Advertisers, the US trade group that has been spearheading a lobbying campaign to have the ICANN programme halted.

However, ICANN has been solidly backed by the National Telecommunications and Information Administration, part of the Department of Commerce, which is ICANN's overseer and usually its main antagonist within the US administration.

In a speech a week before the FTC's letter, NTIA assistant secretary Lawrence Strickling said that those groups opposing the programme are actually "providing ammunition" to totalitarian regimes that want to orchestrate a governmental takeover of internet regulation.

Some countries want ICANN's multi-stakeholder structure – in which individuals, companies and non-profits have a strong voice – replaced by fully government-led policy-making, most likely under the auspices of the International Telecommunications Union.

"The multi-stakeholder process does not guarantee that everyone will be satisfied with the outcome," Strickling said in a speech. "When parties ask us to overturn the outcomes of these processes, no matter how well-intentioned the request, they are providing ammunition to other countries who attempt to justify their unilateral actions to deny their citizens the free flow of information on the internet."

The NTIA, which spent much of 2011 pushing for changes to the programme to better protect government and intellectual property interests, will not block the new gTLD program, Strickling said.

The new gTLD programme will enable any well-funding organisation to apply for the gTLD of their choice between 12 January and 12 April next year.

ICANN is likely to see applications for regional and city names such as .wales and .london, generic terms such as .web and .music, and brand names such as .canon and .hitachi. There could be over 1,000 applications, most brand-related, according to estimates.

Processing the bids, which incur fees starting at $185,000, is expected to take between nine months and a couple of years, depending on whether there are objections from rights-holders or security implications that need to be investigated.

The first new gTLDs could start going live as early as the first quarter of 2013.

While nobody serious believes that cybersquatters will be awarded trademark-infringing gTLDs, agencies such as the FTC and trade groups such as the ANA are concerned that wrong-doers will be able to buy second-level domains that are confusingly similar to existing brands.

While the ANA thinks the cost of defensively registering trademarks in new gTLDs will be excessive, the FTC is concerned that brand-squatting will make phishing easier.

However, ICANN senior vice president Kurt Pritz told last week's House of Representatives hearing into the programme that new gTLDs will actually help reduce cybersquatting.

The programme requires new gTLD registries to apply much stronger trademark protection mechanisms than are currently available in .com, .net and other suffixes, he said.

A new Uniform Rapid Suspension procedure is expected to enable infringing domains to be taken down more quickly and at lower cost than existing systems. A Trademark Clearinghouse will also be deployed to send warnings to people who try to register domains matching brands.

In addition, Pritz told the House committee, cybersquatters and phishers tend to stick to .com when they register brand-infringing domains, he said.

The latest report from the Anti-Phishing Working Group, which analyses the phishing problem, seems to back up this claim. Data from the first half of 2011 shows that only about 18 per cent of phishing attacks use domains registered by the attacker, and that about 49 per cent are dot-coms.

Further, only 2 per cent of phishing attacks attempt to exploit brand confusion in the second-level domain name, the working group found.

"The domain name itself usually does not matter to phishers, and a domain name of any meaning, or no meaning at all, in any TLD, will usually do, " the APWG concluded. "Instead, phishers almost always place brand names in subdomains or subdirectories."

ICANN has so far showed no indication that it plans to delay or amend the programme before it launches.

“This process has not been rushed, it’s been seven years in the making,” Pritz told the House committee hearing. “All the issues have been discussed and no new issues have been raised.” ®

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