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Finishing What We Started: A Level Playing Field for New gTLDs

Mason Cole

While the Internet governance debate devours headlines, it's almost easy to forget that ICANN is in the midst of the most audacious and important policy process it has ever undertaken. And while many new generic top-level domains are now live, the process of ensuring the best opportunity to fulfill their potential is not yet complete.

We recently reached the milestone of 280,000 registrations in the Donuts gTLDs that are currently generally available. After years of policy and business development, it is extremely gratifying to finally begin fulfilling our and the industry's mission of providing specific and relevant gTLDs to users worldwide and we look forward to our weekly launches of many more meaningful names.

But even amid that excitement and the flurry of activity surrounding each new batch of gTLDs we make available to the public, we are keenly aware of obstacles standing in the way of gTLD applicants who have invested significant resources of time and money in the new gTLD program.

The New gTLD Program should be the culmination of ICANN's original mission to introduce real competition to the domain name marketplace. The program should dramatically increase consumer choice, end an era of false scarcity and artificial limitation, and create a marketplace driven by real competition.

The registries participating in the program are already providing some of that value, to be sure, but we remain hobbled by a series of conscious policy decisions that intentionally constrain our ability to compete with the very incumbents against whom we were created to compete.

The steps we take now and in the coming months and years to level that playing field, and provide a real and competitive landscape will go a long way toward determining the success of the program.

As of today, participants in the new gTLD program are subject to several key competitive disadvantages, relating to our registrar channels, the domains we are able to sell, and the complicated rules under which we can sell them.

Getting registrars on board to sell new domains was always going to be a challenge. But what no one involved in the new gTLD program could have known when first applying to participate is that participation came with an automatic 30 percent degradation in the available sales channel just as a cost of doing business.

That, however, is the precise impact of ICANN staff's unilateral decision to use new gTLDs to induce registrars to sign the recently completed Registrar Accreditation Agreement. Under current rules, only the registrars governed by the 2013 RAA are permitted to sell any new gTLDs — in Donuts' case, almost a third of our contracted registrars may not sell our new gTLDs because, for varying reasons, they have not signed the new RAA.

Those registrars sponsor about 18 percent of current total domains under management. These registrars can sell registrations in the incumbent gTLDs and ccTLDs, but not new gTLDs.

The sentiment behind this new provision might be understandable, but it's critical we begin to move away from a construct that creates separate, unequal policy frameworks for new and incumbent gTLDs.

ICANN's approach to name collision creates similar challenges. The risk mitigation plan currently in place is too conservative, eliminating three highly appealing new gTLDs outright, placing about 20 percent more under indefinite hiatus, and limiting the go-to-market speed of all that remain. Not coincidentally, the domains caught in the most restrictive "protections" neatly overlap with those likely to provide the most competition to incumbents like .COM. The new name collision proposal needlessly delays the ability for new gTLDs to go to market, all while permitting names to be registered in incumbent gTLDs where name collisions have existed for years and continue today.

Stability and security are critical, but too often in our community those words are used as a cudgel to beat back innovation and growth. In medicine, physicians — for obvious reasons — are trained to use the "least-invasive" procedure to treat a specific condition. At ICANN, however, we're still doing the equivalent of elective amputations.

For instance, new gTLD registries are not permitted to register any names that are two-character labels, regardless of whether they correspond to an existing ccTLD label, absent a process for ICANN approval. None of the incumbent gTLDs had or continue to have the same restrictions.

In most industries, regulators who wish to foster competition give new entrants some advantages over the incumbents (vs. "protections" in new gTLDs that protect incumbent positions), to offset the natural advantages of incumbency.   In trying to foster gTLD competition ICANN has done the opposite — they have saddled the new entrants with additional disadvantages, but not the incumbents.  
 
So this week in Singapore, in the breaks between Internet governance discussions, participants should turn their focus to ensuring the program we worked so hard to create enjoys a level playing field between incumbents and new entrants and fulfills its potential.

By Mason Cole, VP, Communications and Industry Relations at Donuts
Related topics: Domain Names, ICANN, New TLDs
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Great article Antony Van Couvering  –  Mar 21, 2014 3:26 PM PST

Mason,

I couldn't agree more with the principles you lay out here. Somehow the familiar story-line of scrappy upstarts introducing new, better services in an industry dominated by faceless behemoths has been perverted at ICANN into one where the new entrants are seen as "industry insiders" trying to pull the wool over the eyes of naive and innocent incumbents.  Nothing could be farther from the truth.

The issues go beyond those of the 2009 vs. 2013 RRAs.  They have to do with innovative services that are subject to expensive and excruciatingly long reviews; with fuzzy distinctions between registries and registrars that are being interpreted by established players in ways that harm new entrants; and with a registry agreement that can be changed at any time, opening wide a door for new regulatory burdens and costs at a moment's notice on a fledgling and vulnerable marketplace. 

While ICANN executives are rightly concerned to make sure that the Internet is truly global, and that the multi-stakeholder model is extended and protected, they need to take care that they don't fall into the trap of trying to control the market with a heavy hand. 

The urge to control economic activity is tempting for a regulator, but a heavy hand has never worked.  It simply forces the real economy underground, and the regulators find that they are controlling only a small portion of economic activity, while the real market moves outside their purview without any controls whatever.  ICANN and participating governments need to realize that they must govern with a light hand, or find that they are governing very little at all.

Antony

I agree the playing field should be James Harps  –  Mar 22, 2014 6:49 AM PST

I agree the playing field should be leveled for all TLDs, including among the new gTLD applicants themselves. That process should start with a uniform application of the Applicant Guidebook rules for qualification on all applicants. #Stoler

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Promoted Post

Buying or Selling IPv4 Addresses?

Watch this video to discover how ACCELR/8, a transformative trading platform developed by industry veterans Marc Lindsey and Janine Goodman, enables organizations to buy or sell IPv4 blocks as small as /20s.