Article

Change in Domain

How New Generic Top-Level Domains Will Change the Internet

R. Parrish Freeman, Jr.

August 1, 2012

Four years from now, there may be more than 500 new generic top-level domains. The internet is about to become so much more organized, or so much more chaotic, depending on who you ask.

Whether you know it or not, you use top-level domains every day. A top-level domain (or TLD) is that part of an internet address appearing to the immediate right of the last period. In the example www.example.com, the top-level domain is “.com.” Two-letter top-level domains are called country-code top-level domains, or ccTLDs, while domains of three or more letters are labeled generic top-level domains, or gTLDs.

There are 280 ccTLDs, most of which are used to identify their respective countries, such as .us and .uk. Some, however, have been re-purposed to identify things such as “television” in the case of Tuvalu’s .tv, or “company” in the case of Colombia’s .co. As for gTLDs, there are only 22. These include the ones with which you are probably most familiar: .com, .net and .org, as well as others you may encounter less frequently, such as .mobi, .pro, .travel and .museum, to name a few.

Beyond .Com
The Internet Corporation for the Assignment of Names and Numbers (ICANN), the corporate entity tasked with managing the internet generally, particularly the assignment of address names and numbers, decided several years ago that the current slate of 22 gTLDs was inadequate. New gTLDs are needed, so the argument goes, to enhance competition and allow new platforms for companies and individuals to register internet domain names that more clearly and accurately describe who they are and what they do. This, according to ICANN, will eliminate consumer confusion because consumers will know instinctively to type, for instance, smiths.grocery into their browsers without having to know that Smith’s internet presence can only be found at smithsfoodanddrug.com.

The hope now is that geographic regions or cities (.london, .boston, .wales), common interest communities (.eco, .gay, .thai), trade organizations or established brand names (.aaa, .oldnavy, .ieee, .gucci), and retailers specializing in particular types of goods or services (.furniture, .pizza, .tattoo) will be able to direct consumers to their internet sites by relying more on addresses that make sense and less on how a third-party search algorithm ranks their page among their competitors. 

It took several years to come up with a set of rules and procedures for applying to run a new gTLD but, beginning last January 12, ICANN finally began accepting applications for what it has colorfully labeled “New gTLDs.” The application window (for the first round; future rounds are contemplated) closed on May 30, 2012, and on June 12 the list of applicants and TLDs, which are called “strings” in New gTLD parlance, was made public.

The list consists of some 1,930 separate applications. This figure is a little surprising given the very expensive application fee of $185,000 and the fact that “winning” only brings the honor of having to maintain and operate a domain registry—a very expensive and all-consuming undertaking. Over the next several years, the applications will be examined and the applicants vetted. Because there are so many applications, ICANN has decided to proceed in batches of 500. Each batch may take a year or more to examine, so the first round may remain under review for the next four years.

It is likely, in any event, that the New gTLDs that ultimately emerge and are delegated into the root zone will be something on the order of 25 percent of the applicants, or about 500. The anticipated success rate is so low because there are considerable hurdles to winning, such as proving the financial and technical wherewithal to operate a domain registry.

Applicants must also survive a gauntlet of potential objections from various sectors, as well as the possibility of string contention, i.e., the situation in which several applicants have applied for the same or similar strings. There are, for example, 13 applications for .app, 10 for .art and eight for .movie.

Potential Fallout
The way these New gTLDs will affect business cannot be known with any certainty, but businesses need to know that they are coming. Trademark owners should follow this process closely, learn about the new Trademark Clearinghouse and use it, and monitor the New gTLDs for cybersquatters, just as they do with the current slate of TLDs. Businesses will be affected outside the trademark context as well. In the smiths.grocery example above, the real-life applicant for the .grocery registry is Safeway. Smith’s may be less than comfortable with this.

Interested businesses and individuals who want to comment on or object to a pending application can do so by visiting ICANN’s New gTLD website, http://newgtlds.icann.org/en.

Whether things will be better or worse remains to be seen. There is much ground that will be travelled between now and when that verdict is returned. Many applications. Many objections. Many disputes. Many resolutions. One thing is certain—things will be different.

R. Parrish Freeman, Jr. is a shareholder at Workman Nydegger.

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