ICANN set to change the topography of the internet

Mr Arun Mohan had written a guest post for us back in 2011 when ICANN (Internet Corporation for Assigned Names and Numbers) announced they would liberalise the gTLD system. I am writing this post is to substantiate the developments of that announcement, but first to back up a bit and explain the background to this. (Warning: in analysing and predicting the growth of the internet, I may have used more space on the internet than our standard posts with this lengthy post. The busy reader may want to scroll straight down to ‘conclusions and predictions’)

But for good or worse?

I. Background

Generic top level domain names are the extensions typed at the end of web addresses, eg: “.COM” or “.ORG”. There are currently 22 gTLDs. Broadly, it can be said that domains that do not tie the domain to a geographic location or a country, and that have 3 or more characters, are gTLDs. Domains which end in “.IN” or “.CA” for instance, were established to identify the various different countries (India and Canada respectively here). They are not gTLDs and are called country code TLDs, or ccTLDs. A third category IDN or Internationalised Doman Name also exists. This allows non-latin characters to be used in domain names. 

While this is something that we all use on a daily basis while on the internet, many of us do not realise the potential significance these domain name extensions have. Though the internet started in the 1980s, it was in the late 90s and early 2000s when it really soared into our daily lives and hasn’t looked back since – affecting and effecting communication, culture and innovation like never before. It’s incredible growth and pervasiveness are erasing and will continue to erase demarcations for geographical differences, as well as for growth and innovation in all fields now. And this is why gTLDs are important. They give some kind of association and organization to the chaotic spread and exponential growth of everything online. In the virtual world, it becomes part of your identity in your interactions with everyone else, especially so if you are more than a passive consumer of information. For eg, in the early days of the internet, the big three gTLDs were: “.COM”, meant to signify a company; “.ORG” – an organization; “.NET” – a network. However, with the limited number of domains on offer, and with less internet awareness in those days, many addresses went straight to ‘.com’ without further thought on the matter. 

However, now, a great number of new gTLDs are in the process of being approved and it appears to me that they will turn into ‘lenses’ with which one browses the internet. 

Or taking a more immediate situation – Reliance has applied for the domain “.INDIANS”. If it’s granted to them, they will get to decide who can apply for an address that ends with ‘.INDIANS’. At least Reliance is Indian though. A US based LLC has applied for the domain “.IRISH”. See all the applicants here.

Of course, it will take time for the new gTLDs to become known, but after the first internet boom, corporations and organizations have realised the importance of reserving their internet space and the significance that our ever-increasingly digitized society will place on these internet spaces. 

II. Current issues

ICANN recently decided to broaden out to include much more than the current 22 gTLDs and hence between Jan 2012 and April 2012, they opened out applications to established corporations, organizations or instutitions, to apply as registrars for new top level domain names. They have said that between 300 to 1000 new gTLDs would be issued per year, though they’ve started off by accepting 500 applications. (Their graphical presentation explaining the basics is available here) Once granted, these registrars would be in charge of maintaining that top level domain. For eg, if Reliance is granted the gTLD ‘.INDIANS’, they would then be in charge of who can purchase http://www.abcd.indians and for how much, according to their own criteria.

In order to apply, applicants needed to pay a massive $185,000 to ICANN, as well as show proof of funds (in an escrow account) to support the registry for at least 3 years, which includes an annual $25,000 plus other infrastructural costs. This brings the total costs to about $260,000 plus some other unspecified expenses. If the application is rejected for trademark reasons, a refund of only $20,000 will be given. They seem to have a fair numbers of checks via objection procedures, both pre and post allotment. These checks include trademark disputes, legal rights and to a limited extent, public interest. The evaluation period will be between 9 to 20 months. When two (or more) applicants are both applying for the same domain name, then a more detailed resolution process which has 4 categories which the applicants will compete for dominance in. If there is a tie, then the process goes into an auction and it will go to the highest bidder.

This massive barrier to entry certainly favours larger corporations over smaller ones, and developed country organizations over LDCs. This is evident from glancing through the list, where the majority of applicants are USA based, while the poorer countries find very little representation. As I was just glancing through the list, I counted about 15 or so Indian applicants and they have applied on average for 2 domains each – (rough figures). Having said that, the initial price ie 185000 dollars does not really matter if the manner of settling clashes is through auction bids. This is because the end result will be settled by the bigger purse in any case, just that the starting bid is now set at a particular level.

The distribution of future tangible and intangible resources based on past and current tangible resources, for an area (a virtual world) in which these tangible resources don’t have as much say in progress as in the real world – is indeed unfortunate – and perhaps it was too early in the internet age to be making this leap, at least for developing countries. Regardless, the process is already underway.

However, unless the ICANN were to lay down subjective criteria and then invest in the (massive) necessary information gathering costs to investigate into the appropriateness (based on subjective criterium) for each and every domain they approve, I can’t think of any other method of distribution of these resources that could be considered ‘fair’. According to an information paper for applicants, suggestions for ‘prioritizing uncontested new gTLDs, those from developing countries, those promoting diversity, those in the public interest, closed registry, brands and those that are true generics’ were being taken into consideration, for whatever that is worth.

In this first round, of the roughly 150 applicants (many of whom have applied for multiple domains), a study says that 92% are going after their own brand name. Eg, Airtel is going after “.AIRTEL” and “.BHARTI”.
Despite their ‘community based designation’ procedures, some of the more problematic ones are likely the ones that groups of people that identify with such as “.INDIANS”, “.IRISH”, and “.ISLAM” (which a Turkish corporation has applied for). Also problematic are bound to be the very generic terms such as “.BOOK”, “.MOVIE”, “.MUSIC”, “.APP”.

This is controversial, primarily because once a corporation, organization or institute becomes a registrar, they can set a fee and allow anyone to purchase a second layer domain name, or they could impose stricter criteria and only allow entrants based on certain criteria. On that note, ICANN had kept their comment system opened for about 3 months for guaranteed viewing by the evaluation committee, and continues to keep it open for public viewing but without a guarantee that the evaluation committee will view comments submitted after September 26th.

Yahoo’s homepage in 1996 (!) Click here to see today’s version

Conclusions and Predictions

It’s difficult to predict the trajectory that the internet will take with this liberalization. Either of the two situations are most likely, in my mind:

a) In due course of time (ie, not in the immediate future), top level domain names will hold enormous brand and reputational importance. In this optimal world, corporations may even have standardized 2nd level domain names, and consumers would not need information other than their brand name. For eg, to go to airtel’s home page, they may just have to go to ‘www.home.airtel’, and for toyota, they would go to ‘www.home.toyota’. I.e. just go to http://www.home.insertbrandname 
If the more generic terms, such as ‘bank’, ‘book’ etc are a success too, then search engines may change dramatically. For instance, if you are searching for an actual bank, then you can choose to search the listings for the “.bank” domain. However, if you are searching for text in which the word ‘bank’ appears, you can search outside the ‘.bank’ domain, or within a ‘.history’ domain, for example. Both cases being very different from how searches are currently structured.

Or

b) There will be too many TLDs to make sense of, and continuous registration with multiple domain names will serve to confuse the consumer. Ie, many, many more web presences will take growth but there will be no structure, and no cooperation between players to build the necessary structure. This will also mean that phishers, counterfeits and deception will have plenty of opportunities to grow – with multiple ways of confusing the consumer now present.
Presumably, there will be certain domains that everyone will gravitate towards once again, to maintain some sense of standard. For eg, right now, “.com”, “.org” are the most common domains even though there are currently 20 other top level domain names available. (The reasons for the unpopularity of the other 20 domains are different than the ones I’m giving for this example though). However, with the availability of countless other domain names, there will be plenty of opportunities for confusion and brand dilution to take place. Sounds like good news for lawyers, bad news for the rest.

Again, whatever developments do occur due to this liberalization, it will take at least a few years for the effects to start being noticeable. And in those few years, with the rate of growth online and technology offline, there is scope for a lot of changes to take place, so, for the most part, we’ll have to just wait and watch. And keep a careful eye out for dangerous turns.