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.

Go Daddy files three patents for whois and DNS.

Go Daddy Group, Inc., parent company of domain name registrar GoDaddy, has filed three patents related to interactive and enhanced whois and DNS records. The three applications were published by the United States Patent and Trademark Office on Thursday.

The applications cover various aspects of how to add additional information to whois and DNS records, such as information about whether the domain name is for sale and comments about the domain owner’s business (e.g., hours of operation or product listings). The additional information could be collected through various entities and in several different ways, such as through information stored at a web site. It could also allow for various queries to be made of the whois record’s owner, effectively making whois and DNS records interactive.

Copies of patent applications (pdf):

Interactive DNS for Non-Controlling Party, USPTO application 20090240709

Interactive DNS for Controlling Party, USPTO application 20090240799

Interactive WHOIS, USPTO application 20090240835

Pre-paid wireless company gets a better domain name.

Cricket Communications has a domain name problem, but it just fixed some of it.

The pre-paid wireless company is growing quickly. But finding it on the web isn’t so simple. If you go to Cricket.com, you’ll find the recently sold domain name that pertains to the sport of cricket. (The previous owner of Cricket.com — Live Current Media — used to park it with ads for cell phones. It was the company’s top earning parked domain name). So the company uses the much inferior MyCricket.com domain name — something that’s very hard to guess.

But Cricket Communications just picked up CricketWireless.com, which should give it a boost. According to Compete.com, the domain name gets between 10,000-35,000 type-ins a month. You can assume all of those people are looking for the cell phone provider.

Cricket filed for arbitration with National Arbitration Forum. The owner of the domain name, Standard Bearer Enterprises, decided to hand the domain name over. Standard Bearer was involved in another high profile dispute recently, when it handed over ElizabethTaylor.com.

Here’s hoping Cricket gets on the ball and forwards its new domain name to MyCricket.com.

Lawsuit heads to mediation.

Moniker and Transamerica will enter into mediation to try to resolve their legal battle.

Transamerica sued Moniker, claiming that Moniker owned domain names that infringed Transamerica’s trademarks and set up fictitious entities to hide its ownership. Transamerica later amended the complaint to suggest that Moniker didn’t own the domain names, but enabled the real owners hide their identity.

Earlier this week Moniker filed a motion to dismiss the lawsuit, citing that the complaint only applies to registrants of the offending domain names. It said there is no cause in the complaint that should apply to Moniker, Moniker Privacy Services, or Oversee.net.

After filing the motion to dismiss, the two parties agreed to enter into mediation to try to settle the issue. The mediation is scheduled to take place December 2, 2009 in Miami.

According to The Economist, deal between ICANN and U.S. government is imminent.

The Economist is reporting that ICANN will likely be mostly set free this month, signing a four page “affirmation of commitments” with the U.S. government.

The Joint Project Agreement, which currently governs some of the government’s relationship with ICANN, is due to expire at the end of this month. The new “affirmation of commitments” is due to go into effect the day before the JPA expires.

According to The Economist:

[The agreement] gives ICANN the autonomy to manage its own affairs. Whereas prior agreements had to be renewed every few years, the new one has no fixed term.

The agreement sets up oversight panels that include representatives of foreign governments to conduct regular reviews of ICANN’s work in four areas: competition among generic domains (such as .com and .net), the handling of data on registrants, the security of the network and transparency, accountability and the public interest—the only panel on which America will retain a permanent seat. But there are no penalties if ICANN fails to heed its new overseers short of a termination of the accord.

ICANN’s other agreement with the U.S. government — to run Internet Assigned Numbers Authority (IANA) — runs through 2011.