ICANN: New domains coming in 2010

Debate rages about trademark protection, registry/registrar separation and cost

Internet policymakers are forging ahead with a controversial plan to introduce hundreds of generic top-level domains -- such as .nyc, .sport and .food -- next year.

However, U.S. corporations with large portfolios of domain names are still pushing for a go-slow approach and more protection for trademark owners to prevent cybersquatting and other deceptive practices such as phishing.

In addition, leading registries are arguing for the continued separation of back-end and retail domain name operations. ICANN also faces criticism about the fees it plans to charge new gTLD applicants.

The issue of new gTLDs is the hottest topics at this week's meeting of the Internet Corporation for Assigned Names and Numbers (ICANN), which is being held in Sydney, Australia.  

ICANN says the new gTLDs will provide more innovation, choice and competition on the Internet, especially for non-English language domains. The new domains can be anywhere from three to 63 characters in length and can support Chinese, Arabic and other scripts.

So far, dozens of groups have announced plans to apply for new gTLDs representing cities such as .paris, regions such as .africa, charities such as .green, and generic terms such as .food and .wine. Some companies plan to reserve their own names such as .deloitte.

"ICANN has announced that they will start taking applications in the first quarter of 2010," says Brian Cute, vice president of Afilias, which is providing back-end services to the proposed .eco domain for environmental information. "ICANN is going to be publishing a third version of its guidebook [for new gTLD applicants]…so they are going to be reaching a decision relatively soon."

ICANN, which has been talking about adding new gTLDs since 2007, has issued two versions of its applicant guidebook to the Internet community for comment. A final version of the guidebook is expected by October.

Tim Switzer, vice president of NeuStar Registry Services, says ongoing discussion surrounds the following issues: protection for trademarks and intellectual property; whether registrars can operate new gTLD registries; how community and geography-based gTLDs will be evaluated; and the fast tracking of foreign language domains.

"These are some of the areas that are still in play that ICANN is continuing to work through," Switzer says.

Cute says there are a lot of unanswered questions about how the availability of hundreds of new gTLDs will affect the market dynamics of the domain name industry.

Multinationals are concerned about "if there is going to be a flood of new gTLDs, how does it impact intellectual property rights? How does it impact competition? How does it impact pricing?" Cute notes. "If there's a large influx, how is it going to impact the market?"

Companies say they don't want to spend a great deal of money on defensive domain name registrations to protect their brand names in every new domain. Instead, they'd like to see a list of protected trademarks that can't be sold to anyone but the owner.

The business community is worried about "the whole issue of having to do defensive registrations in hundreds of new domains to protect their brands and how that could end up costing millions of dollars," Switzer says. "It's about putting in a process for dispute resolution at the front end versus after the fact."

As a rebuttal to these concerns, ICANN published two reports in June from a University of Chicago economics professor arguing that its new gTLD plan provided adequate protection for trademark owners.

As these intellectual property issues get resolved, U.S. companies are starting to understand the possibilities of marketing themselves under new domains. For example, companies could create new services such as social networking sites built around their domains such as .disney or .ibm.

"When we get all the processes right like trademark and IP, I think there's more opportunity than downside" for multinationals, Switzer said. "I think there are branding opportunities if we're able to work out the trademark and IP issues."

ICANN's new gTLD plan could change the way domain names are sold and administered. Since the break-up of Network Solutions in 1999, ICANN has required separation between registries, which handle back-end operations for domains, and registrars, which sell domain names to individuals and corporations. With the new gTLDs, ICANN has proposed that registrars can operate registries.A group of leading domain name registries has banded together to fight this change, arguing that it will lead to fewer retailers, higher prices and less protection for sensitive information. The organizations battling the change are: Afilias, which operates the .info domain; NeuStar, which operates the .biz domain; and PIR, which operates the .org domain.  

"Allowing Registry-Registrar cross-ownership is a major decision that could have a massive and far reaching negative impact on the Internet, end users and the entire ICANN community," Alexa Raad, CEO of PIR, said in a written response. "The separation of functions performed by Registries and Registrars has been a proven and successful model in generating competition. The end result of allowing cross-ownership would be further consolidation of the top tier registrars, gaming of the loopholes in the current registry contracts and limited remedies for those suffering abuses, who will be dependent solely on ICANN or national courts to enforce their trademark rights."

On the other side of the argument are Network Solutions and Demand Media, registrars that argue that it's anti-competitive for the existing registries such as Afilias and NeuStar to prevent newcomers into the back-end registry operations business.

Critics also claim that ICANN is charging too much for new gTLD applications. ICANN's current position is that it will charge $185,000 to each new gTLD applicant, and $25,000 per year to each successful new gTLD operators.

Many of these outstanding issues – including trademark concerns and registry/registrar separation -- are being discussed at the Sydney meeting this week. ICANN expects to resolve these issues by fall 2009, when the third version of its guidebook is released.

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