Trend Towards Liberalization Of Country Domain Names: Enters .CN

By Alex Liesche

On Monday 17 March, domain name registrations under the new Chinese Internet address, .cn, were available for the first time to registrants both inside and outside of China. As China's equivalent of .uk, or .us, the .cn domain space will be the Internet address of choice for Chinese consumers and for corporations interested in operating in one of the largest Internet markets.

Country code top-level domains, or ccTLDs, such as .cn for China, .de for Germany and .fr for France are an integral part of most corporations' global domain name portfolio. They provide a direct means of targeting local markets and demonstrate a company's presence or intent to trade within a specific territory. They also enable companies to participate in valuable emerging markets. The China Internet Network Information Centre (CNNIC) which runs .cn, predicts that the number of Chinese Internet users will jump 46 per cent to 86.3 million by the end of 2003. China's e-commerce market, currently valued at $500 million per year, is projected to expand to $23 billion within three years. China will become the second largest Internet market in 2003, and will be the third largest broadband market by 2006 (Source: NeuStar). Through CNNIC's partnership with NeuStar, the exclusive distributor of .cn to various specific registrars such as Register.com outside of China, corporations can now establish a local Internet presence in the market.

Many companies are prevented from registering in certain ccTLDs due to restrictions imposed by the operating registries. For example, registration under .cn was previously extremely restricted and only registration at the third level (e.g. mycompany.com.cn, mycompany.net.cn and mycompany.org.cn) was possible. Other ccTLDs still have similar restrictions, such as in Finland where companies registering a .fi domain name must be locally registered and the administrative contact must be from the organisation applying for the domain. Others such as .es for Spain also require the word string of the domain name to be a trademark, registered company name or abbreviation of the company name.

Many ccTLD registries, however, are seeing liberalization as a way of increasing the number of registrations under their management since the relaxation of their rules allows companies outside the territory to secure a domain name registration.

One such example is the Netherlands, which as of 29 January 2003 has allowed companies without a presence in the country to register .nl domains. This opportunity allowed brand owners to expand their presence into one of Europe's key markets, with a population of 16 million people and over 60% Internet penetration. Although SIDN, the registry operator for .nl still requires domains to have a local contact, providers are able to provide this service on behalf of clients. Other examples include .tm for Turkmenistan, which recently relaxed its registration rules, and .se for Sweden, which will see registrations open up to overseas businesses in April.

Frequently, liberalization also results in a new marketing strategy for a ccTLD. Most famously perhaps is .tv for Tuvalu, which has successfully been adopted by some in the television industry to reflect their brand values. An example of this is UK television broadcaster Channel 5's relaunched five.tv domain name. In addition, the Cable News Network recognised the value of this extension and registered the domain name cnn.tv. More recently the liberalization of .la for Lao People's Democratic Republic meant the domain could be marketed as an address for Los Angeles, Latin America or Louisiana.

One of the potential dangers of liberalization however is an increase in cybersquatting in the territory, and ccTLDs such as .nl have taken steps to tackle this. If intellectual property owners discover that someone has taken their name there is a dispute resolution process available for all domains registered after 29 January 2003.

Similarly, the China Internet Network Information Centre (CNNIC), has introduced a dispute resolution policy for .cn domains in response to the liberalization of .com.cn, .net.cn and .org.cn which happened in December last year. The forthcoming introduction of second-level registrations (e.g. mycompany.cn) could put brands at further risk of being targeted by cybersquatters. The CNNIC Domain Name Dispute Resolution Policy is similar to the Uniform Domain Name Dispute Resolution Policy used for generic TLDs and 32 ccTLDs.

With the constantly changing rules of the various ccTLDs, intellectual property owners must have a well-defined strategy for promoting and protecting their brands in the domain name system. Many will see certain liberalization s as an opportunity to enter valuable local markets, while others will see registration in those areas as protection against cybersquatting. Whatever your strategy, it is important that you keep yourself informed of new developments and that you remain proactive in your approach.

By Alex Liesche, Operations Manager

Related topics: Cybercrime, Domain Management, DNS, Domain Names, New TLDs

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