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  • The Real Truth About New Top Level Domains

    1. BY - Sep 25, 2009
    2. Policy & Law
    3. 41 Comments

    Here’s what is really happening with new TLDs.

    I’ve written before about why I’m opposed to how ICANN is releasing new top level domain names, even though I stand to benefit financially from the release. But over the past couple months we’ve heard plenty of spin from everyone involved in the process. So I want to clear a few things up. I’m going to tell you what everyone is thinking, but may not want to come out and publicly say.

    New TLDs will be introduced - There’s no stopping this freight train. But it can be slowed down. If ICANN were to halt new TLDs today, it would be sued. Of course, it will also be sued when it releases them.

    Everyone is a ‘special interest’ - Everyone who is fighting for or against new TLDs is a special interest, and everyone stands to gain or lose financially depending on what happens. That’s why it was ironic that a letter penned by dozens of new TLD supporters called those against them ‘special interests’.

    These ‘special interests’ are using the process as an excuse to push their agendas - Beyond the current financial implications for these interests with regards to new TLDs, they are using the new gTLD process as an excuse to fast track other proposals. For example, the intellectual property interests are trying to push through massive changes to domain registration rules and dispute policies. This is being done without regard to the ICANN policy process. Governments are trying to change rules about who can register geo domains, at both the top and second level. It’s like slipping an unrelated, last minute amendment into a bill in Washington.

    The IP interests are overstating their worries - I’ve worked in the intellectual property industry. I understand how it works. The goal is to cry that the world is ending. In this case, they say the internet will be overrun by scams, phishing, and cybersquatters if new TLDs are introduced. Although it will certainly exacerbate the current situation, the world won’t end.

    There will be defensive registrations - Although the IP interests are overstating the effect of new TLDs, they will certainly be forced to pay up for defensive domain name registrations. And those proposing new TLDs are counting on these defensive registrations for a large part of their payday. IP owners may not have to buy their trademarks in every extension, but most. If they don’t, someone will snap up yahoo.tel and heineken.tel and their boss will ask why they don’t own it.

    Consultants such as Mark Monitor and Fairwinds really want to see new TLDs approved - IP protection companies are acting like they don’t want new TLDs. Their clients expect them to advocate against their introduction. But they secretly hope they are introduced, because they’ll make a lot of money working with clients to protect their brands in new TLDs.

    .Com values won’t be hurt - Recently, a few pro-new TLD special interests have suggested that .com domain owners are opposed to new TLDs because .com values will drop in their wake. Don’t buy it. It’s especially ironic to hear these words from eNom co-founder Paul Stahura. He suggested someone might buy resume.online instead of buying resume.com. If he really believes this, then his employer Demand Media will lose big money when new TLDs are released. The company is a large .com portfolio owner, makes money selling expired .com domains at NameJet, and sells lots of .com domains through its Acquire This Name entity. So unless Demand Media thinks it will make more money selling new TLDs than it will lose on its .com holdings…

    It’s possible that domain name use will gradually change over time. But I suspect that’s at least 20-30 years off. That’s longer than most people have been on the web.

    Newer TLD values may be hurt - Although web users may become more accustomed to typing in non-.com domains, the value of newer TLDs such as .info, .biz, and .mobi will likely be hurt. Although I don’t believe someone would consider resume.online on par with resume.com, they probably would view it on par with these other extensions. The same goes for commercialized ccTLDs. .TV will compete with .video, and .me will compete with .you.

    A lot of TLDs will fail - Preparing for registry failure is one of the most important aspects of the new gTLD rollout. I don’t have a lot of faith in ICANN on this matter. Its first plan was to require registries to show that they’ll have enough in reserves to pay for basic registry operations for 3-5 years if they fail. That’s like telling a startup that it needs to shut down when it has only 5 years of capital left.

    That said, we might need to redefine what makes a successful TLD. Many people look at .biz and .info as failures because they didn’t conquer .com. But the $10M + they bring in to their registries each year isn’t chump change.

    There are lots of loopholes being inserted into new TLD agreements - Once new TLDs are released, look for radical changes to be applied to existing TLDs. For example, pricing policies inserted in new registry agreements will eventually be applied to .com. ICANN seems to think we should trust that VeriSign won’t try to pull this off. ICANN must have a short term memory.

    There will be an innovative TLD that could shake things up - Proponents of new TLDs suggest that innovation will occur with the release of more TLDs. I agree — there will be one or two innovative TLDs that could make an impact. I don’t know what they are. If I did, I’d be working on it. Unfortunately, no innovative new TLDs have been announced. They’re all just “label” TLDs. And no, offering software applications to registrants is not innovative. That can be done in the layer above the DNS.

    Registries have more to lose in the registry/registrar separation battle – There’s an ongoing battle over ending or curtailing registry/registrar separation. In the near term, registries have more to lose in this battle than registrars. The registrars own the customers, and registries will take a while to catch up.

    Consider this. Say grocery stores were forbidden from selling their own store brand products. Then rules are changed to permit it. At the same time, big food brands are allowed to open grocery stores for the first time. The incumbent grocery stores would immediately gain power as they control existing shelf space and customer relationships. The brands could build their own stores, but it will take a couple years.

    That said, don’t be surprised to see a merger between a major registrar and a large registry. There’s already some cross-ownership of registries such as Afilias.

    Blame ICANN for TLD trademarking - when DNW first wrote about how new TLD applicants were filing trademarks for their non-existent TLDs, there was a lot of backlash against these applicants. But I understand these applicants’ predicament. They don’t trust that ICANN will not consider the trademarks in the application process. ICANN could put an end to this in five minutes by announcing that TLD trademarks will not be considered. Better yet, they’ll be penalized. Give people 60 days to cancel their trademark applications, otherwise a penalty will be assessed.

    We got into this mess because ICANN doesn’t want to be boring - ICANN is supposed to be boring: manage policy and technical underpinnings. But it was founded by smart people. And it has hired a bunch of smart people. Smart people want to be important. They want bigger budgets and more responsibility. That’s what’s going on here. The Joint Project Agreement suggesting some mechanism for the release of new TLDs is the excuse, not the reason, for the introduction of new TLDs.

    Now, pass the popcorn.

41 Comments
  • As always a very well thought out and informative posting Andrew. (why you’re one of the best.) Some good ‘food for thought’/’just reality’ info here on the new tld debacle headed our way. Too bad ICANN doesn’t read and/or pay attention to these viewpoints.

    Popcorn passed.

  • The Real Truth About New Top Level Domains – http://tinyurl.com/ya9jq8n

  • “Governments are trying to change rules about who can register geo domains, at both the top and second level.”

    How serious do you consider this threat? Are the Associated Cities owners under threat? Would you advise holding off on registering dot com city domains that are in excess of five figures?

  • Regarding TLD innovation, the .Artist TLD is helping pioneer several new innovations in Top Level Domains. 1) Community Empowerment – The .Artist TLD, and additionally some of the new TLD operators, have stated they will use a percentage of proceeds to fund and grow their communities. Schools have been cutting down on Art programs and additionally many other programs that fall outside of the core competencies described in the no child left behind act. .Artist is committed to sponsoring youth art initiatives worldwide using a percentage of the proceeds generated from selling .artist domains. By purchasing a .artist domain rather than a .com domain, Artists can decide to invest in something that will reinvest back into their community. This is a fairly new concept in TLDs and I think that the new registries that take this community-centric approach will be the most successful long term. 2) Free Domains & Free Mail – While this is not official, the .Artist registry has considered creating a .artist subdomain dedicated to providing free domain names and free email to artists worldwide. This would be a free alternative to having to register and pay for a .artist domain each year. While free domains and free email certainly aren’t anything new, I believe it’s a new concept that a TLD registry directly offer free domains to their consumers. Regarding other technological innovations that could be done on the various network layers, I believe it’s important to have a standardized process. At this point in time, new registry operators need to concentrate on meeting existing RFCs. I believe changes on that level should originate from the IETF.

    • Luke – I appreciate what you’re trying to do. When I think of innovation, I don’t think of it as giving a share of profits to those in need (although that’s a very admirable cause). I’m thinking of something that can’t be done with TLDs today. Both giving away a share and offering email can be done.

  • Andrew I would also add that the search engines will benefit from the all the confusion so this is good for GOOG and MSFT.

    Anthony

  • Andrew I would also add that the search engines will benefit from all the confusion so this is good for GOOG and MSFT.

    Anthony

  • Hi Andrew – I like the article, I’ll pass it around. I think you are saying some things that need to be said, even though you, like many others on this issue, have your own preferred outcome.

    I am personally (fwiw) pushing ICANN to issue a statement about trademarks for new TLDs, as I agree with you (and always have) that trademarks for “dot something” should not be considered. Then we could get out of this silly trademarks race.

    I personally believe that some TLDs will “fail,” although that doesn’t have the catastrophic consequences the word implies. Like .NAME, some other registry will pick them up; there is talk among registries now for mutual “if you fail we’ll make sure the names resolve” pacts. The incremental cost of a name for a registry is not great, despite what incumbent registries with inflated prices would have you believe. Furthermore, I think registries should be given the chance to experiment with business models and demographics; if they don’t get the registrations they hope for and therefore “fail,” the registrants will not be at risk of losing their investment. I really do think the market should be given a chance to sort this out.

    Finally, I don’t think ICANN being boring or not has much to do with how they’re operating. ICANN, like any institution, has an imperative to survive. In general, over the last few years, they have plainly followed a strategy of “too big to fail,” which is perhaps a natural outgrowth of huge revenue surpluses.

    Anyway, good article, even if I don’t agree with all of it.

    Antony

  • A lot of good points, Andrew.

  • Excellent review of the whole mess :) Bring on the .chaos!

  • @Luke
    How will you know people registering a .artist domain are really artists ?

    The most sought after domain in this TLD might be scam.artist

  • Great point by point summary of this hot topic Andrew!

  • @Seb

    It is important to note the distinction between sTLDs and gTLDs. .Artist will be a generic top level domain (gTLD) therefore anyone worldwide will be eligible to own a .artist domain name. Perhaps in the future there will be a distinction for community top level domains (cTLDs) like .Artist that are operated for the benefit of the community.

  • Patrick McDermott says:

    September 25, 2009 at 3:12 pm

    “…even though I stand to benefit financially from the release (of new TLDs).

    how so?

  • Very good points, from your view. For each of
    your points, one could probably consider 4
    or 5 other viewpoints. Unfortunately, the
    Internet culture is to not consider other
    points of view or potential results.

    One example to consider is that DNS is not
    required to operate the Internet. Monetized
    domain name systems are also not a given.

    It is also not a given that only Verisign
    will be operating the .COM servers. It is
    also not a given that ALL of the .COM names
    need to be on a server cluster. As an
    example, the 4-letter .COM owners may form
    a coalition and deploy their own servers,
    just for 4-letter .COM names. They may be
    vocal in preventing their names from being
    “taken” as TLDs.

    In the existing, aging, legacy, DNS, we have
    yet to see database-driven TLDs. Will the
    Zip.Code database become http://Zip.NNNNN.Code? in the .CODE TLD ?
    What about the ISBN numbers ? Will NASDQ
    have all of their symbols moved into
    second-level names ?

    There are many other pieces to the puzzle.
    Very little of the DNS protocol is currently
    used. We may see TLDs focus more on TXT
    records than A and AAAA records. Also, AAAA
    records are just 128-bit binary, not IPv6.

    Speaking of IPv6, people are just now
    starting to realize that it is a “different”
    network. Who knows what is being developed
    over there? It might as well be on another
    planet and vice versa. People who start
    over there, may never see any IPv4 stuff
    and TLDs, etc. They may have a real life,
    or a second life on http://Blue.Mars which
    is not a http://Candy.Bar

  • Great article Andrew.

    Cheers and happy weekend.
    Em

  • Domain Investor says:

    September 25, 2009 at 7:26 pm

    Jim,

    That is what Icann and others are trying not to prevent.

    The Icann representative briefly talked about it in the congressional hearing this week.

    The last thing all of us want is a splintered internet.

  • Domain Investor says:

    September 25, 2009 at 7:27 pm

    Sorry, mis-type.

    That is what Icann and others are trying to prevent.

  • Interesting how you mentioned that Fairwinds would like to see the new TLDs approved when one of the co-founders is also active with CADNA, which recently issued a statement that ICANN is irresponsibly releasing the gTLDs.

  • If everyone understands we don’t want to see a split root then this should be ICANN’s main concern and priority:

    Steve DelBianco on CircleID:

    What really frustrates me is that ICANN could have simplified this new domain plan by just taking it in steps. While the demand for new Latin-character domains like .eco, .food and .shop is purely speculative, there is one area where the demand is unquestionable—non-Latin domains.

    More than half of the people on earth use non-Latin character sets, and cannot enter or read domain names or email addresses entirely in their own language and characters. ICANN is planning to introduce non-Latin character domains along with new Latin-character domains, but it should have used the international domain rollout as a proof of concept. Moreover, it would have sent a signal to non-Latin users that ICANN was committed to serving the global community.
    When I made this point before the panel, it got a lot more traction than it does at ICANN meetings, where any effort to moderate a plan already in motion are viewed as obstructionist and irrelevant.

    http://www.circleid.com/posts/20090925_new_domains_and_icann_accountability_more_questions_than_answers1/

  • @Split root – “… at ICANN meetings, where any effort to moderate a plan already in motion are viewed as obstructionist and irrelevant.”

    Very well said. That is the consistent response that irriates so many with ICANN and important issues. If it doesn’t fit within their agenda, then they avoid responding directly. And then ICANN representatives become immediately defensive when questioned about the obvious side-stepping. Or if their supposed public inclusion efforts get labeled as insufficient.

    I have suggested that ICANN devise a more user-friendly forum whereby the internet community can discuss critical issues ongoing. It’s a no brainer and the best method available for ICANN to interact with the larger community for input and debate. They will occasionally post here, but then absent themselves when the core issues begin to be raised.

    Stakeholders and interested parties don’t have the time to follow ICANN around the globe or halfway across the country to participate in meetings. Although face-to-face debate of these issues would indeed be preferable in order to “pin down” real answers.

  • Great article, Andrew!

    I think one thing is for sure: It will keep getting harder and hard for brands to protect their trademarks: They need to stay on top of the squatters in .COM/.NET/.ORG, the basic TLD’s and all these new TLD’s. Plus: Twitter squatters, Facebook Squatters, and all the other social media.

    Interesting times. Lots of opportunities.

  • The Real Truth About New Top Level Domains…

    Here’s what is really happening with new TLDs.

    I’ve written before about why I’m opposed to how ICANN is releasing new top level domain names, even though I stand to benefit financially from the release. But over the past couple months we’ve heard ple…

  • Interestingly, as you mentioned that Fairwinds would like to see the new TLDs approved if one of the founders is also an active Cadnam, which recently issued a statement that it is irresponsible letting ICANN gTLDs.

  • Jeremy Leader says:

    September 28, 2009 at 11:25 am

    “[IP interests] say the internet will be overrun by scams, phishing, and cybersquatters if new TLDs are introduced”

    So after the introduction of new TLDs, the Internet will be pretty much the same as it is now.

  • John Berryhill says:

    September 29, 2009 at 11:21 am

    “Interesting how you mentioned that Fairwinds would like to see the new TLDs approved when one of the co-founders is also active with CADNA, which recently issued a statement that ICANN is irresponsibly releasing the gTLDs.”

    This phenomenon is sometimes called “The Baptist-Bootlegger Coalition”. As the story goes, those engaged in the unauthorized production of alcoholic beverages are avid supporters of those who argue against legal production of alcoholic beverages.

    Increasing the number of TLDs both increases the cost and lowers the value of cybersquatting. Hardcore cybersquatters profit from the limited availability of TLDs and the primacy of .com. How am I going to force you to buy yourname.tld when you have a hundred other choices?

  • Heineken has recovered the domain name HEINEKEN.TEL, the resolution of the WIPO is in Spanish, but I recommend you to read it… another victory of another big company

  • This should be found, big company monopolizing the industry waaa

  • I can’t help feeling that the impact on the values of .com domains will be hit by this in a big way. London.com is memorable, but so is London.England; Candy.com is good, but chocolate.candy might be better. Two or three intuitive words with a dot somewhere between them might just be the way forward for the interernet – whats DomainName.News worth?

  • MORE SEO / ICANN NEWS: "The Real Truth About New Top Level Domains." Useful FAQ post by Domain Name Wire. http://ff.im/-92H3G

  • Good article Andrew.

    The plans by ICANN to launch an unlimited number of new TLD’s will cost our Company several thousands of dollars in extra costs in order to defend different online brands we run throughout Europe. If we don’t register all those .love, .eco, .hate, .online some spammers will. We will never use any of those new domains, but it doesn’t matter as we will be forces to pay them dearly in the sunrise period. If we don’t some cybersquaterr will and cause confusion, and to recover them we will be forced to pay thousands to our attorney.

    I’m asking all visitors of this site whether in their belief it’s acceptable that those registries/registrars will force a business which own trademarks and reputation for some online brands to pay 100/200 euros for each sunrise applications in order to protect its name and not be confused with a cybersquatter?

    Let’s say the truth once and for all. If the new TLD will be unveiled without any limit in numbers or regulation existing internet businesses will be held at RANSOM by the registries and some will not survive having to pay exorbitant bills to defend their name. Their choice will be either to place at financial risk their Company or accept to cohexist with dozens (or hundreds) new sites using their brand name, ripping off their idea, flood the market and confuse the public with crap imitations.

    Why on earth should we pay thousands to register a domain with OUR OWN NAME that we don’t want and don’t intend to use??

    Let’s call once and for all this TLD plan for what it stands for: blackmail and extortion of money from online businesses!

  • [...] top level domain names will be costly and time consuming from a brand protection perspective. But, as I noted, they are also overstating the [...]

  • [...] registries have a lot to lose if registry/registrar separation ends with the introduction of new top level domain names. [...]

  • it’s true by TLD names

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