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ClosedSignAs the New gTLD Program has rolled out over the course of the past few years, the Internet Corporation for Assigned Names and Numbers (ICANN) has made a number of program changes along the way. One of these changes disallows closed, generic gTLD applications, such as Amazon’s application for .BOOK.

Now, applicants for closed generics must decide how to proceed: whether to open their generic strings to the public, limit registrations to a defined portion of the public, withdraw the application, or sell it.

While some applicants for closed generics are already considering selling their strings to operators more experienced in running open registries, others are weighing the costs of revising their original business plans and operating restricted registries.

Despite the added work involved, this middle ground can provide as valuable a platform for innovation as closed and open registries.

The Internet Corporation for Assigned Names and Numbers (ICANN), which oversees the New gTLD Program, announced the prohibition against closed generic gTLDs last October. Earlier in the year, ICANN’s Governmental Advisory Committee (GAC) had identified over 100 generic strings that it said were contrary to the public interest. The ICANN board endorsed the GAC advice but noted it would not apply if an applicant could demonstrate the closed registry would serve the public interest.

A restricted gTLD won’t be the same as one populated by a single-registrant, speaking with one voice. But nor will it dilute the registry operator’s central message, purpose, or intention, the way an open generic might.

The traditional gTLD space is filled with successful restricted registries — .GOV and .EDU are the most prominent examples — so ICANN’s decision doesn’t have to be the death knell for applicants of closed generics. Those applicants can still build an intuitive and meaningful restricted namespace.

The most obvious benefit of operating a restricted registry, as is the case with an open registry, is the potential for profit, though registries will have to carefully weigh potential profits against the cost of running the registry. Of course, determining the potential profitability of a registry is exceedingly difficult, as the market changes constantly. But applicants can take a number of steps to increase their chances of financial success.

Restricted registries can take advantage of options available to all applicants to strengthen their exclusivity. They may, for example, reserve up to 100 names for promotional purposes before going live. They also may reserve any number of second-level domains as “premium names,” which can be sold at higher prices, adding to the proprietary nature of the string.

Operators of restricted registries also must work closely with their registrars to enforce the restrictions they impose. Without enforcement, the restrictions will be meaningless. And the registry operator must understand that a restricted gTLD may not discriminate against otherwise eligible registrants, such as competitors.

The Registry Agreement and Registry-Registrar Agreement are the primary places a registry must clarify its new policies as an open or restricted registry. Clarifications must also be made to the Acceptable Use and Takedown policies.

A registry that makes the necessary adjustments to run a restricted generic may reap the benefits, despite having had to abandon its original plan and adopt a new one. As with other types of gTLDs, association with a successful new string can open new avenues for extending a brand, supporting new business models, and creating unique marketing opportunities.

If a new gTLD is well maintained and provides high-quality, relevant content, the operator of that space may be viewed as a trusted, reliable, and useful source of information, which in turn creates demand, and thus profit.

 

Among those looking for answers at ICANN’s March meeting in Singapore will be new generic top-level domain (gTLD) applicants who haven’t yet found a path to delegation due to potential name collisions. No longer is the issue of name collisions merely technical. Over the course of almost a year, it has evolved into a potential business and financial roadblock.

Name collision refers to the confusion that may occur when a new gTLD string exactly matches an existing string used on an internal network. So, as new gTLDs enter the root zone, they can potentially “collide” with existing names. Name collision is a problem in current gTLDs too, but has taken on greater significance because of the exponential number and types of strings involved in the New gTLD Program.

The issue first took hold in late March 2013 when Verisign produced an incisive report (pdf) laying out a number of possible security concerns. At first, the report seemed quite damning. Upon closer examination, it became clear that ICANN’s Security and Stability Advisory Committee had already addressed many of Verisign’s concerns. Nevertheless a community-wide conversation was launched and the search for solutions began.

ICANN hired an independent agency to audit the root zone through the “Day in the Life of the Internet” (DITL) project to gain insight into the breadth and depth of potential collisions. The DITL data lists every domain name queried at the root zone over the course of 48 hours each year for a number of years. The domain names ending in new gTLDs were pulled from this list to determine which strings got the most hits. But the audit offered scant data aside from the simple list of colliding domains. These lists are the basis of the mitigation plan in place today.

Each path forward, however, has far-reaching and highly variable implications.

The majority of strings will follow the “alternative path to delegation,” which requires applicants to block every domain on their string’s list of DITL data before they launch. Once ICANN has the time and resources to investigate the blocked names, it might unblock those it thinks will cause no trouble. This path is the easiest and quickest for applicants, especially those with fewer than 100 names on their list.

For those strings with hundreds of thousands of names on their list, the solution is more complicated since inevitably the list will contain high value terms. So what has been a technical issue for some applicants becomes a strategic issue for others.

If corporate applicants cannot register names such as help.BRAND or buy.BRAND for an unknown period of time, their new gTLD business plans could be seriously impacted. How long will these names be blacklisted? Could they be blacklisted forever? What do competitors’ lists look like? ICANN’s timeline for digging deeper into the DITL data and creating thorough recommendations for each term on a string’s list could be critical to many gTLD marketing and use strategies.

Finally, applicants for 25 strings, including .BOX, .CASA and .FAMILY, are unable to use the alternative path to delegation not because they have lengthy lists of domains to block but because their lists are dynamic, with a high rate of change from one year of DITL data to the next. This is the group of applicants that must wait until the next ICANN public meeting to find out how ICANN will go about developing a mitigation plan and how long it will take.

While it is unlikely this group’s Name Collision mitigation will stall applications for more than a few months, once again, a technical issue has become something much bigger with serious financial and strategic implications.

Name Collision is a sticky business, and opinions vary on the impact it will have on new gTLDs and legacy websites. But for many applicants, the constant chatter about technical issues pales in importance to business and commercial considerations.