Home / Blogs

"Open" or "Closed" Generic TLDs: Let the Operators Decide

Tom Lenard

(The following is an edited version of comments I submitted to ICANN regarding "closed" generic TLDs.)

On February 5th, ICANN solicited comments on whether ICANN should determine the circumstances under which a generic TLD operator is permitted to adopt "open" or "closed" registration policies. Allowing gTLD operators to make these determinations, as opposed to ICANN, will promote innovation on the Internet to the benefit of consumers.

In order to bring the benefits of a competitive TLD market to consumers, ICANN should generally take as light-handed a regulatory stance as possible, as long as it meets its technical responsibilities. A light-handed regulatory approach is consistent with the policy of relatively open entry into the TLD space that ICANN has adopted.

A benefit of the new gTLD program, in addition to providing competition to incumbents, is the ability of the entrants to develop new business models, products and services. Historically, gTLDs have been open, and arguably that openness benefited the growth of the Internet. But at this stage of the Internet's development, adding new options to the status quo is more likely to unleash new forms of innovation. Closed gTLDs may be a promising source of innovations that have not thus far been possible to implement or even envision. Closed gTLDs may, for example, be a way to provide services with enhanced security. No one can know what innovations might be blocked if ICANN generally required gTLDs to be open. In short, adding new open gTLDs is likely to create benefits, but the returns to adding completely new types of gTLDs are potentially much larger.

New gTLDs are valuable economic assets. ICANN should adopt policies that assure that these assets are allocated to their most highly valued uses. ICANN's decision to use an auction when there are multiple applicants for the same gTLD will further that goal. The bidder who believes its business model will be the most profitable will win the auction and the right to operate the gTLD. When there is only a single applicant, that applicant presumably represents the highest-valued use of the gTLD.

The best use of a gTLD can change (e.g., from closed to open) if the initial business model isn't successful or if economic conditions change. This change can be effected either by the current operator or by a transfer of the gTLD to a new operator, subject to ICANN's review. In this way, gTLDs can continue to move to their highest-valued uses over time.

The dangers of ICANN dictating how gTLDs should be used are illustrated by the experience with radio spectrum. Historically, the U.S. Federal Communications Commission allocated blocks of spectrum to specific uses — e.g., broadcast radio and television. Over time, the costs associated with misallocation of spectrum under this "command-and-control" regime became very large. The process of reallocating spectrum to higher-valued uses has proven lengthy and difficult. Although the U.S. and other countries have moved toward a more market-based system, the costs of the legacy system are still reflected in the scarcity of spectrum for wireless broadband uses.

Several commentators have expressed concern that closed gTLDs are anticompetitive. No evidence supports this claim. First, we already have experience with generic second-level domain names — e.g., cars.com — which have provided useful services with no apparent anticompetitive effect. There is no reason to expect anything different from a .cars gTLD. If, for example, General Motors (or any other automobile company) were to operate .cars, it is not plausible to suggest it could thereby gain market power in the market for cars. Note also that both operators and ICANN are subject to the U.S. antitrust laws if they use the TLD system in an anticompetitive way. To the extent that ICANN allows synonyms as gTLDS — e.g., "autos" "automobiles", "motorvehicles", perhaps even "goodcars", etc. — the potential competitive problems become even more remote.

In sum, ICANN should provide maximum flexibility for operators to experiment with new business models. This is the best way to promote innovation on the Internet.

By Tom Lenard, President, Technology Policy Institute

Related topics: ICANN, Top-Level Domains


Don't miss a thing – get the Weekly Wrap delivered to your inbox.


Kind of disagree. Jean Guillon  –  Mar 07, 2013 11:02 AM PDT

I am already worried by ICANN allowing an open .WINE TLD to be managed by an operator with absolutely no knowledge about wine so when it comes to allowing the same operator to use such a TLD as a closed one, it worries me even more (.wine is just an example here). I already see the picture: champagne.wine used for the promotion of Californian Champagnes ;-)

Again, if no evidence supports commentators concern that closed gTLDs are anticompetitive, then why didn't ICANN allow this use of closed gTLDs in its first version of the applicant guidebook? Couldn't these uses have been considered right at the beginning: years ago and in a T-R-A-N-S-P-A-R-E-N-T way?

Today, once again, our Community has to face one of these "rat├ęs" and if whoever considers these problems at ICANN, decides that they are not anticompetitive when they are, then it is entire industries which are concerned. And once it is too late: it is too late, there is no way back and the guy who agreed on such decision is gone star-fishing.

To post comments, please login or create an account.

Related Blogs

Related News

Explore Topics

Dig Deeper

DNS Security

Sponsored by Afilias

Mobile Internet

Sponsored by Afilias Mobile & Web Services

IP Addressing

Sponsored by Avenue4 LLC


Sponsored by Verisign

Promoted Posts

Buying or Selling IPv4 Addresses?

ACCELR/8 is a transformative IPv4 market solution developed by industry veterans Marc Lindsey and Janine Goodman that enables organizations buying or selling blocks as small as /20s to keep pace with the evolving demands of the market by applying processes that have delivered value for many of the largest market participants. more»

Industry Updates – Sponsored Posts

Domain Registrations Reach 331.9 Million, 6.7 Million Growth Year over Year

.brands Spotlight: Banking and Finance Industries

Google Buys Business.Site Domain for 'Google My Business'

Radix Announces Global Web Design Contest, F3.space

Global Domain Name Registrations Reach 330.6 Million, 1.3 Million Growth in First Quarter of 2017

.TECH Gets Its Big Hollywood Break

.PRESS Supports Press Freedom Day for 3rd Consecutive Year

5 Afilias Top Level Domains Now Licensed for Sale in China

Radix Announces Largest New gTLD Sale with Casino.Online

2016 Year in Review: The Trending Keywords in .COM and .NET Domain Registrations

Global Domain Name Registrations Reach 329.3 Million, 2.3 Million Growth in Last Quarter of 2016

A Look at How the New .SPACE TLD Has Performed Over the Past 2 Years

Neustar to be Acquired by Private Investment Group Led by Golden Gate Capital

Startup League Reports from WebSummit, Lisbon

.SPACE Becomes the Choice of the First Ever Space Nation Asgardia

Afilias Chairman Jonathan Robinson Wins ICANN's 2016 Leadership Award at ICANN 57

MarkMonitor Supports Brand Holders' Efforts Regarding .Feedback Registry

Why .com is the Venture Capital Community's Power Player

The .cancerresearch TLD: Search for Cure Drives Digital Innovation

New TLD? Make Sure It's Secure