New ICANN-sanctioned report suggests limiting new TLD application rounds in order to collect more data.
ICANN has published its latest hired economic report on the costs and benefits of introducing new top level domain names. Unlike the last report from a different author, this one lays out clear logic rather than just playing to the hands of ICANN.
It is a well reasoned report that lays out the truth about the costs and benefits of new TLDs, and comes to a conclusion I’ve repeated many times: there’s no way to accurately predict the costs and benefits of new TLDs.
After discussing many possible studies that could be undertaken to try to determine costs and benefits, the authors conclude that doing so would largely be a waste of time. Instead, the authors suggest a staged approach to new TLDs to get a better read on the cost/benefit equation:
First, it may be wise to continue ICANN’s practice of introducing new gTLDs in discrete, limited rounds. It is impossible to predict the costs and benefits of new gTLDs accurately. By proceeding with multiple rounds, the biggest likely costs—consumer confusion and trademark protection—can be evaluated in the earlier rounds to make more accurate predictions about later rounds.
Second, in order to derive the greatest informational benefits from the next round of gTLD introductions, ICANN should adopt practices that will facilitate the assessment of the net benefits from the initial rollout of additional gTLDs. Specifically, ICANN should require registries, registrars, and domain names registrants to provide information sufficient to allow the estimation of the costs and benefits of new gTLDs. For example, there might be mandatory reporting of trademark disputes.
The report does an excellent job summarizing previous studies on new TLDs. Here’s one tidbit I wasn’t ware of — each new TLD introduced in the 2000 round underperformed its forecasts:
The number of domain names registered in the new open gTLDs was far less than each registry had projected during the application stage. The .info registry had 39 percent of its projected registrations as of the end of 2003, while .biz had 61 percent, and .name had just two percent.
If I have one criticism about the report, it’s that it references studies undertaken by parties with an economic benefit from the introduction (or not) of new TLDs, and doesn’t note these conflicts.
Still, this is a step in the right direction.
Finally, the first semblance of logic at work. Staged release is the only reasonable way to proceed and I have specifically said this since the beginning. The flood approach brings lots of needless risks.
The “Carlton study” was an insult and a disgrace. There are too many intelligent participants and stakeholders around to blindly buy into something so inherently flawed/weak. Hopefully, sentiment is cycling around to a common sense approach. Selective, staged release … evaluation of the results … and modifications based on examination of the results. This allows for maximum damage control should it be needed, and a more controlled means of testing the market’s appetite for new tld’s. Not to mention it reduces the introduction of tld pollution on the net … that I know for a fact consumers do not want or need.
I think one factor in why .info had so few registrations relative to its projections may have had something to do with the fact that its first-choice TLD in its application was “.web”
The study leaves some wiggle room on what limiting new TLDs means — it says to make “finite” rounds, which could mean do one open round and then evaluate afterward rather than letting people continuously apply. After all, previous rounds technically didn’t have limits to the number of TLDs.
It will be interesting to see how people play off of that.
ICANN just does TLD Market-Trials (Proof-of-Concept)
Based on the financial incentives to-date, it
appears that ICANN will run more Market-Trials.
ICANN has less and less to do with the DNS
that reaches the average user, especially in
the Internet@TV space. The FREE market is
making incremental introductions of new DNS
solutions. ICANN has very little to do with
that. .CO is an example in progress.