Icann, the Internet Corporation for Assigned Names and Numbers, hit a big snag over the weekend—raising questions about its decision to consider adding of hundreds of new generic top level domains (gTLDs) to existing ones like .com and .net.
That's potentially good news for advertisers. They've been lobbying against the creation of gTLDs  because they worry that it will dilute their brands and cause consumer confusion unless they spend millions in defensive registrations, like many companies had to do with .xxx.
The National Telecommunications and Information Administration, or NTIA (part of the Department of Commerce), rejected Icann's bid to continue overseeing the Internet Assigned Numbers Authority, a critical contract that manages the assignment of IP addresses and domains.
Icann has overseen IANA for more than a decade, but NTIA only extended the contract for six months. The NTIA's announcement came just as Icann began its March 11-16 meeting in Costa Rica.
In a statement , NTIA puts Icann on notice that it must change some of its governing policies, "including the need for a structural separation of policymaking from implementation, a robust companywide conflict of interest policy and a series of consultation and reporting requirements to increase transparency and accountability to the international community."
Icann made the decision last summer to go ahead with the process to add new gTLDS. Soon after, Icann Chairman Peter Dengate Thrush bolted to take a position as executive chairman of Top Level Domain Holdings, a company that stands to benefit from the addition of more gTLDs.
Since then, Icann has taken a lot of heat from the Federal Trade Commission, a number of lawmakers, advertisers and trademark owners and more than 200 international organizations, but critics have had little leverage over Icann except to lobby  the Department of Commerce to hold up the IANA contract.
"[The NTIA decision] speaks to Icann's process and what we've been arguing, that Icann has not been responsible to the various groups that have raised issues. We are in favor of a multistakeholder process, but that implies it be responsible to the communities it serves," said Dan Jaffe, evp of the Association of National Advertisers, one of the hundreds of organizations that has criticized Icann's decision and its process. "We think this is a big deal," he added.
Icann's president and chief executive officer would seem to agree that the organization needs some changes in the areas singled out by the NTIA. "I believe it is time to further tighten up the rules that have allowed perceived conflicts to exist within our board," said Rod Beckstrom, said in an address during the Costa Rica meeting. "Icann must place commercial and financial interests in their appropriate context. How can it do this if all top leadership is from the very domain name industry it is supposed to coordinate independently?"
In a press conference, Beckstrom declined to comment specifically about the IANA contract. "We were informed that NTIA wasn't moving ahead," Beckstrom said. "We were invited to have a briefing with [NTIA] and we'll be having that discussion."