Today could be the point in history at which we look back and say, “that was the day the Internet fundamentally changed.” Today is the day the International Corporation for Assigned Names and Numbers (ICANN) opens up its new registry for generic Top Level Domains and it will have a profound affect on how people find and consume information on the Web. Will it be a gold rush? Is this the end of the “.com” era as we have come to know it?
A top level domain is a core part of how the Internet organizes and parses the names of websites. The most common, of course, is .com, but other TLDs are .net, .org and country domains like .CO or .UK. ICANN’s new gTLDs will allow companies, governments and other organizations to register unique strings. For instance, are we about to enter the era of .pepsi? See below for everything you need to know about the new domain name system.
Why and How
ICANN believes that the new gTLD system will be a boon for the Internet economy. Startups, business, entrepreneurs and governments will all be allowed to own and manage their own little portion of the Internet, if they so choose.
Here is ICANN’s reasoning:
“One of ICANN’s key commitments is to promote competition in the domain name market while ensuring Internet security and stability. New generic Top-Level Domains (gTLDs) help achieve that commitment by paving the way for increased consumer choice by facilitating competition among registry service providers. Soon entrepreneurs, businesses, governments and communities around the world will be able to apply to operate a Top-Level Domain registry of their own choosing.”
Many people think that the new gTLD system will start a gold rush for new domains. To a certain extent this is true. A lot of companies will be bidding big money to retain their trademarks as a gTLD. ICANN will not hold a trademarked name for a specific gTLD just because that company owns the trademark. On the other hand, owning a gTLD is a big organizational and financial responsibility that will be prohibitive for many brands and enterprises.
For example, the base financial commitment for entry for a gTLD is $185,000. If you thought you would waltz in and grab your last name as a TLD, you are probably not going to be able to. It is unlikely that we are going to start seeing individuals with personal URLs like “joe.smith.” In this case, Mr. Smith would need to pay for the gTLD and prove to ICANN that he and his organization can support the strict requirements of owning a gTLD.
“Please note that applying for a new gTLD is not the same as buying a domain name. An applicant for a new gTLD is, in fact, applying to create and operate a registry business supporting the Internet’s domain name system. This involves a number of significant responsibilities, as the operator of a new gTLD is running a piece of visible Internet infrastructure.”
The financial commitment is more than just $185,000 that serves as an evaluation fee. A deposit of $5,000 is required with the application. As a gTLD owner, an entity is required to be the keeper of that domain. That means the company will, in one way or another, be responsible for every other URL that pops up using the new name. In the Smith scenario, whoever owns the Smith gTLD would be responsible for the organization, security and infrastructure of the domain name. After a domain is approved, there is a $6,250 monthly fee and a $0.25 per transaction fee after the first 50,000 transactions in a calendar year.
ICANN does not know how many applications it will receive in this first round of new gTLDs. Entities can apply for domains from today (Jan. 12) until April 12, 2012. This round will contain a maximum of 500 new gTLDs applications and subsequent batches will be limited to 400.
The application and review process is extensive. We are not going to see new gTLDs crop up tomorrow or even next week or next month. The review process for each application can take anywhere between nine and 20 months.
“There are several stages that an application may pass through prior to a final determination being rendered. Those stages are Administrative Check, Initial Evaluation, Extended Evaluation, String Contention, Dispute Resolution and Pre-delegation. The shortest path for a successful application is to pass Administrative Check (lasting 2 months), Initial Evaluation (lasting 5 months) and then move to Pre-delegation (lasting approximately 2 months) without any Objections filed or String Contention concerns. In this case the evaluation process could take as little as 9 months to complete. On the other hand if an application does not pass Initial Evaluation and elects Extended Evaluation and/or is in the Dispute Resolution or String Contention stages then the evaluation process could take up to 20 months to complete (or longer in the event that unforeseen circumstances arise).”
New applications will be assessed by independent third-party expert panels.
What Will New gTLDs Look Like?
New domains will be required to be at least three characters in length and contain only alphabetic characters from A to Z. Hence, no domains will be issued that have numbers, like .c0m or .1234.
Country codes are not included in this sale of gTLDs and are a completely separate part of ICANN’s TLD standards. Part of the three letter requirement is to protect current and future country level domains like .CO (Colombia) or .UK (United Kingdom).
Not included in ICANN’s gTLDs are second and third string domain names. Consider maps.google.com. In this case, the TLD is .com while the second string is .google and the third .maps. Operators of new gTLDs will be the ones to validate any second and third string domain names.
Multiple languages will be supported in the new gTLD system, and non-Latin writing systems, such as the Arabic alphabet and Chinese characters. When an applicant applies for a gTLD, it will not own the translation of the domain. Hence, if you are applying for .thing, you will not also receive the Spanish .cosa or the equivalent in Arabic letters or Chinese characters.
There are two options for new owners of gTLDs to operate them: open or closed. One will be that a company or a brand owns its own name, Coca Cola for instance, and keeps its second and third string URLs within the company. Like, news.coke or offers.coke. Coca Cola would not sell URLs to outside entities and maintain the entire gTLD in the corporate environment. This would be a closed example.
An open example would be if some entity purchases the aforementioned .smith gTLD. The organization could then start selling DNS registrations to individuals, like joe.smith or betty.smith. This is where the true money will be made in the new ICANN infrastructure.
Owners of new gTLDs will likely not be able to turn around and sell the domain. The extensive application and review process contains many layers of objections, comments and evaluation on how well an organization can conduct the domain. So, buying .sex and thinking that it can be flipped for millions of dollars later would not be a feasible model. Buying .sex and selling registrations to the domain would function much more effectively in the new system.
There are two types of applications: standard and community. A community could function as a group of like-minded people working towards a common goal with a reasonable shared infrastructure. A community could be, say, a large group of Silicon Valley startups that all want to use the gTLD .startup. The companies could create a partnership with a central body that would support the gTLD. A standard application would be to a company or an organization that merits consideration.
An organization cannot, however, apply for a gTLD on anothers behalf. If you buy a gTLD, it is yours. You cannot turn around and flip it to GoDaddy or Namecheap for management. On the other hand, there is nothing stopping the domain registrars from applying for gTLDs on their own.
“ICANN will only enter into an agreement with the applicant. There’s no provision for Party X to enter a registry agreement with ICANN designating Party Y as the registry operator.
ICANN makes it a point to say that “no, gTLDs are not going to break the Internet.”
“The increase in number of gTLDs into the root is not expected to affect the way the Internet operates, but it will, for example, potentially change the way people find information on the Internet or how businesses plan and structure their online presence.”
The application and review process, not to mention the cost of supporting a gTLD, is prohibitive to cybersquatters. Some companies may buy their .brand as a defensive strategy but the fact of the matter is that it will be extremely difficult for squatters to get through the process without a plan of action and support. Some companies that can support might just buy the name so it will not have to deal with headaches later.
Forrester’s Jeff Ernst has this to say on companies making decisions of whether or not to apply for a gTLD:
“Keep in mind that this is much bigger than just moving your brand from the left to the right of the dot. I’m not a big fan of submitting a defensive registration. Get some of your smartest people from marketing, finance, legal, distribution, service, and strategy together. Examine some of the biggest challenges you have today in any of those areas. Think about your company’s strategy and priorities over the next 4 years. See if you can find a strategic application of a registry that can differentiate your company, contribute to growth plans, or help with one or more of your biggest challenges. And if so, go forward with a strategic application. If not, read my latest reports and understand the risks and actions you should take when you stay on the sidelines.”
So we, for example, are not worried in the slightest about some organization buy the .writeweb gTLD and blackmailing us to sign up for read.writeweb. There are bigger fish in the sea.
From a security perspective, it is not likely that spammers will buy their own domains and use them as a launching point for spam attacks. As Blue Coat’s Chris Larsen pointed out to me recently, it is fairly easy to block spam and malware once you know where it is coming from. So, if spam is coming primarily from a gTLD owned by a botnet operator, it would be simple to just block that gTLD. Again, given the cost and review process, that is not an efficient use of funds for malware makers.
What are the concerns regarding the new ICANN gTLD ecosystem? It will definitely dilute the TLD infrastructure and fragment how the Web is organized. Is that a bad thing though? ICANN is a not-for-profit organization so it is not motivated by making money hand over fist. How excess money from the application process will be used will be put to a vote. Overall, is this a positive or negative move for the Web? Let us know in the comments.