ICANN’s New gTLD Application Initiative – Status Check
12 January, 2009
Last June, ICANN approved a recommendation to implement the largest expansion in gTLDs such as .shop to supplement existing gTLDs such as .com. In late October, the ICANN staff released a draft Applicant Guidebook detailing its proposal.
The Guidebook, while still nothing more than a comprehensive work-in-progress document, still manages to include some surprises which are likely to have a significant impact. So, it’s not surprising that the initial public forum on this proposal (which closed on December 15) garnered over 200 comments, including comments from large business corporations from the US and abroad, and even a rather cautious comment from Big Brother himself (the United States Government’s Commerce Department).
Some of the topics of discussion around the application process as illustrated through the Guidebook and for the overall initiative were:
- Brands/Trademarks Protection:
Several large corporations, including the likes of Microsoft, AT&T, Bank of America, etc., have stated that the introduction of the new gTLDs will increase the resources that they constantly need to invest to protect their trade marks on the internet. The Guidebook doesn’t really specify concrete mechanisms through which ICANN would protect the rights and interests of trademark holders, apart from the Dispute Resolution Procedure, which in itself is pretty ambiguous. Several corporations have asked for an expansion of the reserved names list to include trademarks.
- Application related expenses
With an application fee of $185,000 and annual registration fee of $75,000 (or 5% of transaction revenues), the entire process is expensive, to say the least. And this is not including the dispute resolution fees, application creation costs, the staff requirements, travel and other expenses to get the relevant support from various entities. This is also excluding what an entity may end up spending in case the application goes through an auction. What’s more, once it’s approved, the new gTLD will need considerable investment to create consumer awareness and ensure consumer adoption. Some experts peg the total costs at a staggering US$ 1 million.These costs will definitely weigh down heavily on relatively smaller communities and even companies looking to sell domains under newer TLDs. This is even more significant given the current global economic scenario.
- Consumer welfare
There are several concerns about the impact of the new gTLDs on end-consumers. These include:
- Uncertainty about the actual need for new TLDs as voiced by the US Government which cited the fact that ICANN didn’t follow through with its proposed research on the gTLD market.
- Concerns that the new TLDs will actually make the market place less competitive. This stems from the fact that ICANN won’t really be considering the consumer friendliness of the terms that the new Registries will be offering to their new gTLD domain consumers as well as the fact that the Registry agreement doesn’t include price caps. Therefore, similar to what happened with .biz and .info recently; various groups have demanded that ICANN include price control measures to ensure that Registries can’t charge consumers any price at will.
- DNS stability and security
ICANN needs to provide more information on how the introduction of the new gTLDs will not jeopardize the stability and security of the Domain Name System (DNS), especially for IDN gTLDs. This is one of those things that ICANN states that it will ensure, but has yet to explain how.
- Implementation of the Guidebook proposal
There has been some speculation, from the likes of Go Daddy (the largest domain name Registrar in the world) and the US Government, that ICANN may not have the required resources to handle the mammoth task to executing the process that it’s proposed. In some cases, there’s uncertainty on how ICANN will implement some of the things that it’s proposed. For instance, in case of a string contention, competing applicants are encouraged to drop out from the race, but not allowed to form joint ventures with the competitor that stays in the race. Here, ICANN doesn’t elaborate on how it will encourage applicants to withdraw their applications from a string contention, given the resources that the said party would have invested already to reach that stage, much less comment on how it plans to ensure that the withdrawing applicants don’t form an off-the-book deal/joint venture with the applicant who’ll stay back in the race.
There’s an overall consensus that ICANN seems to be taking this process forward at an unnecessarily hurried pace. Despite extending the public comments period, several entities, including representatives of other governments are yet to post their response, and many are yet to decide on the same. While ICANN has (just about) managed to stick by its original time frame, continuing to do this from here on will be difficult (if not impossible). This is because of the sheer volume and nature of the comments that it will need to address through its finalized Guidebook – originally intended for release by ICANN’s Mexico Meet in March.
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