Chris Maroney, Co-CEO and Co-Founder of Afternic.com, Responds to ICANN's Advisory.

Business Editors

NEW YORK--(BUSINESS WIRE)--June 27, 2000

The following is an announcement by Afternic.com:

Makes Official Complaint, including Email Correspondence,

Available to Refute ICANN Claims of 'Fair Treatment'

Afternic.com is among the first companies that recognized the inevitable convergence of the primary market (domain registrations) and secondary market (domain auctions) as a result of the competition that ICANN was mandated to introduce over a year ago. The convergence was and is an economic inevitability due to the commercialization of the Internet and the simple reality that some domain names are worth more than their registration price, especially after they have been developed and have a history.

Despite this economic certitude, and despite irrefutable evidence that NSI and Register.com, among other registrars, are competing in the aftermarket today with aggressive plans to dominate the market in the near future, ICANN has stonewalled Afternic.com's registrar accreditation application for eight months. While it was not obvious eight months ago, today virtually all domain industry players recognize that the domain aftermarket is a core part of the multi-billion dollar domain name industry.

When competing in the domain aftermarket, ICANN-accredited registrars have significant advantages over companies that are not registrars. The two largest advantages are customer flow between primary and aftermarket buyers and the speed and ease of domain name transfers, which can only be done by an ICANN-accredited registrar. The aftermarket represents to registrars an opportunity to offer new value-add services that differentiate one registrar from the rest.

ICANN, with its monopoly on the accreditation process, is suppressing competition in the domain name industry. By not accrediting Afternic.com eight months ago, ICANN has eradicated the first mover advantage necessary for our web startup company to compete shoulder to shoulder with the industry giants. By continuing to refuse Afternic.com accreditation, ICANN is imperiling our future while NSI and Register.com stroll into the domain aftermarket unimpeded. Afternic.com has been left with no option other than litigation against ICANN in our quest for a level playing field.

ICANN released an advisory (http://www.icann.org/announcements/advisory-20jun00.htm) on its website describing its view of the Afternic.com lawsuit. We find the advisory misleading and inaccurate. In particular, ICANN states or implies two things that we feel compelled to refute: The first is that ICANN has treated Afternic.com fairly, the second is that Afternic.com engages in or encourages the practice of `cybersquatting'.

For the past year, ICANN's lack of democratic process and its habit of overreaching its mandate of `technical management' without informing the affected parties have been a continual source of criticism by leading legal experts and consumer watchdog groups. In each controversy, ICANN has steadfastly dismissed the criticism and has repeatedly stated that ICANN is an organization concerned with the 'technical management' of the Internet and it is governed by a 'consensus driven, bottom up' decision making process.

Afternic.com can only address the situation of our accreditation application and not the various other controversies that have confronted ICANN, but in our specific instance, Afternic.com has found the criticism of ICANN to be accurate. We have been the recipient of unfair treatment at the hands of ICANN, with no recourse but to litigate in our pursuit of fair treatment. In order to refute ICANN's claims that we have been treated fairly, Afternic.com is making available the complaint (http://www.afternic.com/icann), including an exhibit that details the emails exchanged between Afternic.com and ICANN representatives regarding Afternic.com's registrar application. We invite observers to read these official materials in order to independently assess whether or not Afternic.com was treated fairly.

ICANN also makes a point in its advisory to select several names listed by Afternic.com users that it believes violate trademarks. This appears to be a specious attempt by ICANN to use trademark holders as a shield to defend a hidden policy agenda to destroy or marginalize the domain aftermarket.

Afternic.com does not encourage 'cybersquatting' any more than an accredited registrar does. Afternic.com does not speculate on names, and Afternic.com does not sell names - Afternic.com members buy, develop, appraise and sell names. The site provides a neutral, third party appraisal and trading platform and community forum for domain name owners. Every domain listed at Afternic.com has already been registered at an ICANN-accredited registrar, and Afternic.com can no more police, let alone provide expert legal judgment on, trademark infringing domain names than can an ICANN-accredited registrar.

Courts and the newly established ICANN dispute resolution providers exist specifically because disputes between domain name holders and trademark holders are often complicated, case-by-case decisions. The ICANN universal dispute resolution policy (UDRP) has drawn fire because it is vaguely worded and judgments have been wildly inconsistent. Court decisions have likewise been inconsistent, in large part due to jurisdictional issues that arise due to the country- and industry-specific nature of trademarks versus the global nature of domains. Afternic.com, like the ICANN-accredited registrars that permitted the names to be registered in the first place, cannot reasonably be expected to police the hundreds of thousands of names that pass through its automated system, nor is it even desirable that Afternic.com make policy judgment calls in an area so rife with confusion amongst the legal and policy experts.

Since the moment we launched the site almost eight months ago, Afternic.com has made it clear to ICANN, the press, its members and anyone else who asked that Afternic.com respected the rights of trademark holders and was operating a venue in good faith with both trademark law and ICANN dispute resolution policy. Our user agreements make clear the buyers' and sellers' obligation to adhere with these same laws and policies. Within our first two months of operation, we established a partnership with NameProtect.com to facilitate trademark searching and reporting, and promote these features prominently on every auction page. In our community appraisal boards and forums, members that list domains with potential trademark issues are harshly told that their names are valueless by other, better informed members, essentially providing an effective self-policing function and grassroots education process that is to the best of our knowledge unique in the industry.

We provide a consistent, evenhanded, open and reasonable policy regarding disputed names listed on our site. ICANN, in its advisory, has pulled 5 names from the nearly 200,000 names currently listed on our site and implies that we should police each name and rewrite seller descriptions on our site. This seems to us to be as unreasonable as a request that registrars provide expert judgment on each domain before it is registered to determine trademark violations, and perhaps periodically review domains to ensure that there are being used in 'good faith'. Through the policies, site features and relationships we have established, Afternic.com shows a respect for the rights of trademark holders, and an eagerness to adhere to all legitimate venues of dispute resolution.

Afternic.com was forced to litigate against ICANN as a last resort in the face of unfair, anti-competitive treatment. Afternic.com was similarly forced, in this response and publication of official documents, to defend allegations stated or implied in the advisory (http://www.icann.org/announcements/advisory-20jun00.htm) published by ICANN. Afternic.com would prefer to focus our efforts on growing our business, improving our site and adding new services to the domain name owning community, but unfortunately ICANN has arbitrarily made these efforts difficult.