ICANN Has Problemz?

Let the new gold rush begin!

Well, that’s what the Internet Corporation for Assigned Names and Numbers (ICANN) seems to imply on its site, announcing the opening of the new generic top-level domains program, which launched on January 12 (the day I’m writing this column). It’s right there on the home page: “Starting today,” crows the banner taking up a good third of the home page, “Someone will discover the next big .thing!” (Clever use of that “.” BTW.)

If you haven’t heard, the “next big thing” is that it’s now possible for you (provided you have $185,000 lying around) to create your own top-level domain name. Forget about those boring .com’s, .net’s, and .org’s…tomorrow’s Internet’s going to feature designer top-level domains (.think .aardvark, .deals, or .republicans) that all of us are going to be clamoring to register for. Why should Republican presidential candidate Mitt Romney have to settle for MittRomney.com when he could have MittRomney.republicans or MittRomney.president? Heck, if someone decided to shell out the dough to create the new TLD, he could even own MittRomney.checkoutmyhair if he wanted it.

And that’s exactly the problem. What TLD should his campaign register in order to make sure that nobody out there “hijacks” his name? What if he neglected to buy the “.sucks” TLD and somebody created “MittRomney.sucks”? He might not even have to forget to buy it: according to the ICANN gTLD FAQ (#1.9 if you’re wondering), “new TLD operator[s] may choose not to sell all second-level registrations.” Don’t like a new TLD but want to protect your brand by registering (and sitting on) your domain name? You could be SOL if the owner decides they just don’t feel like selling you your domain name.

Whether the new gTLDs are a gold rush or not remains to be seen, but they’re definitely a whole new can of worms digital marketers are going to have to deal with. In fact, the Federal Trade Commission warned back in December that the new system “has the potential to magnify both the abuse of the domain name system and the corresponding challenges [the FTC] encounter[s] in tracking down Internet fraudsters.” It even goes on to note that “scam artists” will now be presented with “infinite opportunities” for mischief such as phishing if the plan goes through.

And it is. Today you can hop on over to newgltds.icann.org and start the application process. As for ICANN, it’ll be happy to take your money and evaluate your application, but don’t expect it to notify you if someone else wants to register your trademark. “At this time,” states FAQ 1.12, “ICANN is not contemplating a notification system” for trademark owners. Want to pre-register your trademark in advance of applying for one? Fuggetaboutit…FAQ 1.10 declares that “ICANN does not accept reservations or pre-registrations based on trademarks.” It’s going to leave that to the registries, who will be “required to operate sunrise or intellectual property claims services for the protection of trademarks” as part of their duties as a new gTLD owner. Yup, that’ll solve the problem.

I’m sure that ICANN has the best intentions (it’s not trying to make money off of this and actually plans on “consulting” “the community” “as to how excess [registration funds] should be used”). But considering how many problems the existing TLDs have wrestled with (including all the controversy surrounding the .xxx domains and Google’s recent decision to ban the entire .co.cc domain in order to cut down on malware distribution issues), introducing a free-for-all top-level domain rush is surely going to create some major problems for all of us who use the Internet:

1. Consumers will be confused. To most consumers, .com is where it’s at. In fact, in this day and age it’s a given that if you’re looking for a company online, you can pretty much assume that they’ve got a .com domain name. No matter how hard ICANN and other registrars have pushed to drive acceptance of newer gTLDs (.biz and .info, for example), anything other than .com is considered second-rate by both businesses and consumers. While some businesses may register .biz and .info domain names just to protect their trademark, how many major brands do you know of that use them regularly? Let’s face it: .com’s always going to be the high-rent district.
2. Brands beware. Not only are businesses (especially major brands) going to have to be ever-vigilant in keeping track of new TLDs in order to maintain their trademarks, the rules I mentioned earlier are going to make it tough to protect IP even if you’re willing to pay for the privilege. And even if brands are able to snatch up their names as new gTLDs become available, what are they going to do with them? If history’s any indicator, the answer is “probably nothing.” A 2002 Harvard study looked back after the first six months of .biz registrations and found that “at least 74 percent of currently registered .BIZ domains provide no web content or provide only error messages or placeholders.” That number may have changed in the past 10 years, but I’m betting things haven’t gotten all that much better.
3. Potential protection racket. Besides the trademark and branding issues, businesses that want to protect their domain names are going to have to keep continuously shelling out money to register new domains…provided the registrars will even sell them. It may even provide a nice opportunity for registrars to shake down companies to avoid having their names besmirched via associations with potentially unsavory gTLDs: in September, .XXX registrar ICM Registry announced that it would graciously allow those “wanting to disassociate themselves with pornography” to pay a one-time fee of between $150 and $300 to block registration of their domain names. Here’s a whole new business model: register an offensive (or suggestive) gTLD for $185,000 and then bill the Fortune 500 a mere $1,000 a pop to keep their names from being associated with your domain. Boom! You’re $315,000 richer for not doing anything!
4. Burdensome requirements. So say you’re a big brand who wants to lock up your name as a new TLD. One hundred and eighty-five grand is a lot these days, but for a multibillion dollar company it’s a drop in the bucket, right? Sure…if that’s all there was to it. According to ICANN’s terms, you not only have to pay the money to register your TLD but you also have to serve as the registrar as well! ICANN “expects all gTLDs to be operational” (FAQ 2.5) and serve as the registrar for the domain. You also have to maintain the infrastructure to settle trademark disputes and have the financial resources to maintain the new TLD until a new registrant is found (see the Applicant Guidebook). And you thought dealing with domain names was a hassle!
5. Eventually it may all be irrelevant. As search engines have gotten better, the importance of a “perfect” domain name (one that spells out the name of your company or organization) has become less important. These days the majority of site traffic is driven by search engines, ads, and links from other sites. Sure, it might look nice to have www.yourname.com on your business cards or your ads, but we’ve all gotten used to compromising (or coming up with names that can score a .com registration). I’d predict that eventually the whole domain name system as we know it will be rendered irrelevant through the use of smarter AI-based assistants (such as Apple’s Siri) that allow us to find the company we’re looking for without having to type it into a browser.

Maybe I’m just being paranoid. Maybe ICANN’s system of gTLD evaluators, public comment, and other checks and balances will prevent the worst from happening. But for now, fellow marketers, it’s best to keep an eye out on new TLD developments if you don’t want to be SOL.