ICANN Skirts Criticism To Announce Domain Changes

ICANN, the body that manages the Internet address space, is proposing to expand the generic top-level domains (gTLD) system of categorising web sites (.com, .org, .net. .gov) to allow companies to register their names as domains.

ICANN chief executive Rod Beckstrom (pictured) announced the timetable for the changes at the ICANN 39 conference but would not comment on a letter, published by the organisation, from an angry US Department Of Commerce.

The high cost of exclusivity

There are currently 21 gTLDs constraining the world’s websites to a narrow band of designations, but under the planned regulations this could expand astronomically – in cost as well as number.

At the moment, registering a domain name costs relatively little compared to the registration fee of  $185,000 (£117,000) for a company name gTLD. Some companies have already expressed concern that this will favour the larger companies. Some of the larger companies are worried that it will increase their costs in protecting their trademarks on the Internet.

At this week’s ICANN 39 conference in Cartagena, Colombia, the company outlined its plans. It also published, without initial comment, a letter from Lawrence Strickling, assistant secretary for communications and information at the Department of Commerce.

In the strongly-worded letter, Strickling expressed concern that the organisation had failed to comply with obligations it agreed with the US Government in an Affirmation of Commitments signed over a year ago.

Under the commitment, ICANN promised to complete an economic study evaluating the potential consumer benefits of expansion balanced against potential costs prior to implementation.

Strickling wrote: “You and I have discussed the importance of performing this comprehensive economic analysis on more than one occasion since we signed the Affirmation. Nonetheless, it appears that ICANN has not completed this important analysis.

“While ‘An Economic Framework for the Analysis of the Expansion of Generic Top-Level Domain Names’ was posted on June 16, 2010, this report confirms that the requisite economic analysis remains, at best, incomplete. This fact is reinforced by the ‘to be posted’ reference to the Economic Study Phase II Report on the ICANN website,” he continued.

The Art Of Brinkmanship

Shortly after the posting of Strickling’s letter, in a fine display of brinkmanship, the missing New gTLD Economic Study Phase II Report appeared on the ICANN website as promised, though somewhat belated. Though the promise to discuss the report before taking action has yet to be fulfilled.

The changes have been in the air since 2008 and were originally planned to be active in 2009, but got enmeshed in trademark issues. The new schedule, announced at the conference, means that implementation will take place in spring next year.

Already Iron Mountain and Afilias, two major domain name registry and Domain Name System (DNS) services, have announced a co-referral programme to vet applicants for new gTLDs. Under the terms of the programme, Iron Mountain will refer prospective gTLD registry operators to Afilias for registry services, and Afilias will, in turn, refer the prospective registry operators to Iron Mountain for data escrow services.

The cost of registration is a hurdle in a world concerned about returns on constrained investments. The Metropolitan Corporate Counsel, a legal advisory organisation, said, “Clients need to formulate a strategy for their business, be it a defence against infringement of trademark rights or the creation of, or participation in, a custom domain for select constituencies. In either circumstance, clients considering applying for a new gTLD should consider whether the anticipated return on such investment is acceptable.”