6 things that could go horribly wrong with new TLDs

If any of these things happen the new TLD program will have some serious headaches.

ICANN officially opens its application window for top level domain names today, giving companies, organizations, and individuals 90 days to submit their plans for a .whatever.

The plan has many notable flaws, but six of them seem to me like the biggest break points in the program — things that could delay individual applications or lead to lawsuits against ICANN.

1. Community gaming

This is going to be a big one. The application process gives preference to applicants representing “communities”. But I suspect just about everyone (save for .brands) will try to claim community status. .Music? We represent the music industry and fans. .Sport? We represent every person who has ever stepped onto a sports field. .Sex? You get the idea.

2. GAC advice on controversial TLDs

Speaking of .sex, don’t expect this to ever see the light of day. The guidebook gives the Governmental Advisory Committee the power to kill or, at minimum, delay the allocation of any controversial string. .Gay and .sex come to mind. And believe me, if .gay is denied then ICANN is going to take a lot of heat.

ICANN is giving the GAC this power because of immense pressure. It may have been required to push the new TLD program forward. But it’s a big mistake. If you’re going to open up the top level, you may as well allow at the top level what can be registered at the second level: everything. Yes, that includes thing’s I’d rather not see, such as hate terms.

There’s one thing playing in ICANN’s favor here. The application price tag of $185,000 is high. Given the GAC mechanisms to quash controversial terms, groups like the KKK would have to fork over a lot of money just to try to stir up the pot.

Yet part of me wants to apply for .womenshouldbeabletodrive just to piss off a certain country…

3. Restriction on applicants guilty of cybersquatting or reverse domain hijacking

There’s a provision in the guidebook that forbids groups from applying for new TLDs if they or related persons have shown a “pattern of adverse, final decisions” against them on UDRPs, ACPA lawsuits, etc. The spirit of the rule in the guidebook would ensnare companies such as GoDaddy and eNom (Demand Media). But I highly doubt it is enforced against these companies. Perhaps ICANN can weasel out of it by showing “exceptional circumstances”, or the applicants will just show their alternate entities on the applications.

Don’t expect this provision to stop anyone who has been found guilty of reverse domain name hijacking to be rejected. I know of no entities that have been found guilty of three RDNH’s, the threshold in the guidebook.

4. Discounts for needy applicants

This is a smaller concern, but the $2 million program to discount application fees to “needy” applicants is really bad. Worse, any TLD that is approved under the discounted program probably doesn’t have enough money to really make their new TLD work.

There’s no penalty for asking for the discount, so I expect just about everyone who might qualify to go for it, which could lead to delays. You’ll also have a lot or organizations upset about the results, as ICANN will effectively pick winners and losers — something it says it doesn’t want to do.

5. Registry/registrar cross-ownership

The guidebook allows registries to own registrars and vice-versa. However, it notes: “ICANN reserves the right to refer any application to the appropriate competition authority relative to any cross-ownership issues.”

Who is the appropriate competition authority? Depends on the location of the registry or registrar? Or would the U.S. antitrust authorities have jurisdiction?

The most likely targets of any sort of action would by VeriSign and GoDaddy given their dominance in the industry. But if there are competing applications for the same TLD, and one comes from an integrated entity, don’t be surprised if a non-integrated organization tries to push antitrust concerns. If a registry were smart, it would wait until after allocation of a TLD to pursue vertical integration. As for registrars, that’s a bit harder: by applying for a new TLD they are effectively becoming a registry.

6. Batching

What if more applications are received than ICANN can process at one time? ICANN will “batch” the applications. How will it do this? No one really knows. All the guidebook says is that it won’t be based on when the application is received and it won’t be a lottery. It will be a secondary timestamp.

A secondary timestamp? As in someone will concoct a system like a drop catching service to ping the server when this secondary timestamp scheme starts?

A smart thing for ICANN to do in this case is to ask for volunteers to delay delegation. I bet a number of .brands would take ICANN up on this if it means delaying or reducing fees.

a final prediction…

OK, so there are my six things that could go horribly wrong. I bet the biggest ticking time bombs haven’t even been identified yet.

But I have one prediction for new TLDs that I think is pretty solid: the application closing will be delayed. It’s set to close April 12. But I expect a flurry of last minute activity, forcing ICANN to extend the deadline.