August 2014 Issue of Wines & Vines
 
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Wineries May Lose Dispute Over Internet Domains

 
by Paul Franson
 
 
Common
 

Marina del Rey, Calif.—It appears that wine companies may suffer collateral damage in a policy dispute between European agencies and the United States over control of the Internet.

Specifically, European agencies want to loosen the grip that the U.S. nonprofit Internet Corp. for Assigned Names and Numbers (ICANN) has on assigning Internet generic top-level domains (gTLDs) such as .com and .gov.

There have been less than a dozen such TLDs (other than those for countries), but ICANN proposes to create hundreds more, including .wine, .vin and .vino for use by wine interests. Regional wine associations in the United States and European wine regions object to the suffixes to Internet addresses unless safeguards are included to prevent misuse of the domains.

“It could be extortion,” noted Rex Stults, head of government relations for the Napa Valley Vintners, one of the regional groups opposing the new suffixes.

He notes that companies might have to reserve not only basic names like Mondavi but variations like MondaviWine.wine, RobertMondavi.wine, MondaviEstates.wine and spend heavily to protect their interests.

In addition, unscrupulous operators might reserve names relating to regions like Napa Valley and hijack potential customers to sell them wines from other regions.

Wineries in the United States are not alone in their opposition.

“We will pass from 20 domain names to a thousand, and this will pose risks for brands, companies, local authorities,” said Riccardo Ricci Curbastro, president of European Federation of Origin Wines. “We feel that we are witnessing the establishment of a globally organized extortion scheme,” he said in a statement.

Esther Dyson, the famed tech observer, venture investor and founding chair of ICANN, agrees. “I think (and have said elsewhere) that this is basically a protection racket.”

Eight noted U.S. wine regions have banded together to oppose the gTLDs, including the Oregon Winegrowers Association (545 wineries), the Napa Valley Vintners (500 wineries), Sonoma County Vintners (230 wineries), Willamette Valley Wineries Association (200 wineries), Paso Robles Wine Country Alliance (160 wineries), the Santa Barbara County Vintners’ Association (150 wineries), the Walla Walla Wine Alliance (75 wineries) and the Long Island Wine Council (48 wineries).

Collectively the groups represent nearly 2,000 wineries, and they join the European wine regions that are also concerned.

The influential California-centric Wine Institute has long advocated to protect place names in the United States and internationally, and leaders believe the new domain names must accurately represent the origins of wines in all of the world’s markets.

The Wine Institute objected to a 2013 proposal by the EU to control use of the names. However, in a June 20 letter to Stephen Crocker, ICANN’s chairman, the Wine Institute said it has no problem with the .wine and .vin domain names, but it is opposed to a plan that would give European interests the ability to control who gets to use the word wine globally.

In 2013, the European Union proposed that it solely control who could use .wine and .vin to protect the EU terms of geographic significance—also known as Geographical Indications or GIs.

The Wine Institute has taken the position that decision-making authority over the new domain names must be nondiscriminatory, and it joined the United States, Australian and New Zealand governments in objecting to specific countries having special authority over how the words “wine” and “vin” are used in the Internet’s addressing system.

One obvious question is, “Who wants the new domains?” Wine Institute spokesman Nancy Light says that they are not aware of anyone pushing for the wine domain names now, but collection may stem from simple greed.

ICANN proposed adding the TLDs to foster competition and provide alternatives to scarce .com designations, but the specific offerings seem to result from companies like Donuts.co, which was founded in 2011 by industry pioneers with the business model of registering domains, then licensing them out. It was backed by more than $100 million in institutional capital during its first funding round and more in the second. These registrars pay $185,000 for the rights to rent out the domains.

Donuts applied to ICANN for 307 top-level-domain names in 2012. A “registry” like Donuts sells the domains to “registrars.” The company is one of three vying to become registrar for .wine and the only applicant for .vin. Donuts wants the matter decided this year.

Neither .wine nor .vin is live yet, but even so, one potential register, United Domains, claims 10,671 preregistrations. Another registrar advertising .wine is eNom.

As of July 11 ICANN listed registrar applications as “on hold.” ICANN told Wines & Vines applications can be put on hold for pending activities such as public comment periods that may impact application status.

East Coast editor John Biggs of Techcrunch, a leading technology news network, forecasts bad news for wineries. “There’s no precedence for removing the domains. They will never go away, no matter how much the affected industry whines.”

Another technology observer, Techcrunch writer Alex Wilhelm, said that there’s one thing wineries can take comfort in: The new domains may not prove significant. “It’s somewhat incredible how many gTLDs there are now. And how small their impact appears to be.”

 
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