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New gTLDs – An Overview

Written by Muhammed Poswall on 24 April 2013

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Last summer applications were invited by the Internet Corporation for Assigned Names and Numbers (ICANN) for new generic top level domain names. A gTLD is the last component of the domain name i.e. .com, .net,  . gov, etc. Organisations are able to apply for endings with their organisations name or a generic name such as .book, .hotel, .app, etc. The cost of making an application is $185,000 and a $25,000 annual payment to ICANN. As of 18 March 2013 there were 1912 applications for new gTLDs and 26 withdrawals (if you withdraw at this stage you can still get 70% of your money back).

The new gTLDs are going to raise a host of issues for right owners and businesses. Each business will need to evaluate whether it needs to apply for a new gTLD or whether to take action should there rights be infringed. The benefits for applying for a new gTLD include:

  • Entrepreneurship and Flexibility - you can control and modify the domain name to suit your business needs and clients.
  • Increased control – owners can set the price for those registering your gTLD and can control who may use the gTLD. Bring together clients, locals and communities and use the gTLD as a rallying call.
  • Potential income stream - customers could renew their domain names year after year.
  • Marketing - establishing brand protection and definition, brand awareness, brand loyalty and full control over your own gTLD. As well as increasing your market reach as the gTLDs are accessible to users whose local languages use non-Latin characters.

There are risks involved in applying for a new gTLD:

  • Potential Loss of Investment
    • applicants must pay an initial fee of  $185,000;
    • pay annual running costs;
    • demonstrate sufficient financial depth to keep the registry fully operational for at least three years even if the business plan does not achieve its objectives;
    • no guarantee that you will get the gTLD you applied for.
  • Contractual and Staffing requirements – you will be running a registry you must comply with ICANN’s requirements. A registry also requires employing highly skilled technical operators.
  • Competition – other organisations may have applied for similar TLDs and if approved, your new TLD could encounter competition from unexpected sectors.

With the introduction of new gTLDs there is likely to be plenty of disputes. ICANN has therefore introduced the New gTLD Dispute Resolution Policy. Businesses, individuals, governments and communities may file objections to a gTLD application on four different grounds:

  1. String Confusion Objection
    • gTLD string is confusingly similar to an existing top level domain or to another applied for gTLD string in the same round of applications.
    • the International Centre for Dispute Resolution (ICDR) will administer disputes arising on this ground.
  2. Legal Rights Objection
    • gTLD string infringes the existing legal rights of the Objector.
    • the Arbitration and Mediation Centre of the World Intellectual Property Organization (WIPO) will administer disputes arising on this ground.
  3. Limited Public Interest Objections
    • gTLD string is contrary to generally accepted legal norms of morality and public order that are recognised under international principles of law.
    • the International Centre of Expertise of the International Chamber of Commerce will administer disputes arising on this ground.
  4. Community Objection
    • there is substantial opposition to the gTLD application from a significant portion of the community to which the gTLD string may be explicitly or implicitly targeted.
    • the International Centre of Expertise of the International Chamber of Commerce will administer disputes arising on this ground.

The result of winning an objection under points 2-4 will result in the application being rejected. However, the result of winning a String Confusion Objection will result in ICANN placing the applicants into a string contention set. As of 26 February 2013 there were 230 string contention sets (due to ICANN receiving multiple applications). Take for example the new gTLD .app this had 13 applications and .blog had 9 applications.  Once the list of 230 strings has been finalised by ICANN the resolution process can begin.

There are four ways the parties can resolve the dispute:

  1. withdrawal of an application;
  2. Community Priority Evaluation(process to resolve string contention, which may be elected by a community-based applicant);
  3. an agreement among the parties; or
  4. an auction.

Only one party will prevail in the set and the dispute may very quickly result in the parties going to auction.

It also raises issues in relation to competition within the internet and the monopolisation of the internet by major corporations or organisations that are able to obtain the funding necessary to make these applications and bid in these auctions. A number of organisations such as Google and Amazon have made numerous applications for generic terms such as .book and .search.  These organisations already dominate the internet (Google controls 79% of all search queries within the USA and 90% within Europe). Not only do they have an unfair advantage due to their size and financial backing, it seems these organisations are attempting to direct users to these closed registries. The consumer may not know if they are dealing with one company instead of a competitive market.

We will have to wait and see if this large investment by these organisations in the new gTLDs will pay off and overcome the dominance of the  .com. One thing is for sure though, ICANN is a lot richer.
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