Radical change coming to Net addresses (FAQ)

Soon .com, .net, and .edu will be joined by .whatever-you-want. Expect the new Net domains to bring confusion and trademark hassles, along with business opportunities.

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Come 2012, confused camera customers might be able to point their browsers to a Web address that looks very different from what's available today: support.canon.

That's because the organization in charge of such names, the Internet Corporation for Assigned Names and Numbers, is planning on a dramatic rewriting of the rules for Web addresses that could demote .com's importance.

Today there are just a few of what are called generic top-level domains--.com, .net, .org, .biz, and .edu, for example. But ICANN wants to open the door to, potentially, hundreds or thousands more of these GTLDs.

That's a big change, especially for those who have a brand to protect on the Internet and were taken by surprise by the virtual land grab that took place with .com addresses in the 1990s. Here's a look at what GTLDs mean now and in the future.

What is a generic top-level domain, and how do I get one?
In an Internet address, the top-level domains is what comes after the last period in the main server address. There are two broad types: the generic top-level domains such as .com and country code top-level domains such as .jp for Japan or .de for Germany. With ICANN's expansion, though, the term "generic" is something of a misnomer: it could include not only something like .auto or .hotel, but also branded domains such as .ibm or .safeway.

When .com addresses became must-have business accoutrements, companies scrambled to register their own or buy them from those who already owned them. Things will be different with the GTLD expansion though: instead of registering a domain for a modest fee through a registry such as GoDaddy, those who want a GTLD of their own must apply to ICANN. And it's expensive: table stakes are $185,000 for the application fee and $25,000 a year to operate the registry. If someone else wants the domain, bidding will determine the winner. And another fee will crop up when a registry is setting up secondary domains on a top-level domain: the first 50,000 are free, but they will cost 25 cents apiece after that.

For a detailed look at the process, check the most recent GTLD applicant guidebook, but be warned: the most recent version is a 312-page, 4.7MB download.

Why expand the range of top-level domains?
ICANN, a not-for-profit corporation founded in 1998 to oversee the Internet address system, tries to promote competition, including in the market for domain names. Most prominent global sites today need an address ending in .com, and one company, VeriSign, is the registry that oversees that domain. A company wanting more control over its brand on the Internet might want to apply to ICANN to become a registry controlling a domain with its own name. Other companies might want to operate broader registries open to all comers, perhaps with a very generic domain such as .web or something more specific such as .art. GTLDs could help people launch Web sites using a family name even if the .com version is taken. And cities are expected to get in on the action, too, with local domains such as .sydney.

There are a lot of companies in the world, of course, and ICANN appears to be bracing itself for a lot of new activity: in notes from its September meeting, ICANN indicated it thinks it will be able to accommodate adding something like 1,000 new domains each year.

Big companies worry a lot about controlling their brands, and GTLDs offers a new mechanism for doing so. A company that secured a GTLD with its own name doesn't have to open it up to use by others, said Karla Valente, director of ICANN's product services communications. It is possible to have a "top-level domain that doesn't have second- and third-level selling. There are many brand owners that find this strategy very appealing," with their own control over the domain rather than reliance on third parties. "They also believe this could lead them to all kinds of different branding and marketing strategies," Valente said.

Filling ICANN's coffers is apparently not a reason to expand the range of GTLDs, though. "The model of the program is to be revenue neutral. We are not here to make money on new TLDs," Valente said.

When people start seeing GTLDs arrive?
"I think 2012 at the earliest," Valente said.

But the run-up to offering GTLDs is already well under way. Their arrival has been delayed to deal with concerns from trademark holders, the U.S. Commerce Department (PDF), and ICANN's Governmental Advisory Committee (PDF), which reports to ICANN's board. But the expansion is proceeding, and ICANN expects to approve the final GTLD guidelines, publicize them, and accept applications for a window a few weeks long in 2011--more than two years later than originally expected. So companies that might be affected by GTLDs probably should start thinking about them sooner rather than later.

The actual arrival will be gradual. "We have to pace ourselves how we add things to the root," Valente said, referring to the servers at the heart of the Internet address system that link the textual names people type into a browser with the actual numeric addresses those Web servers use. And the root servers have been undergoing significant change of late, with the arrival of IPv6 (Internet Protocol version 6) to provide vastly more addresses and the shift to a technology called DNSSEC that makes the domain name system more secure.

ICANN hasn't decided yet when the next window for submitting applications would open.

Who needs to care?
At the outset, chiefly those with trademarks and brands to promote or defend are the ones who should pay the most attention. Unfortunately, there's no clear path about what they should do.

Japanese camera maker Canon has announced its intention to apply for the .canon domain, an asset that would stamp its communications and Net presence with its own brand. "With the adoption of the new GTLD system, which enables the direct utilization of the Canon brand, Canon hopes to globally integrate open communication policies that are intuitive and easier to remember compared with existing domain names such as 'canon.com,'" Canon said of its move. Not everybody will come to the same conclusion, though.

"I would not recommend brands invest in GTLDs at this stage of the game. The URL is only the holding place for what is most relevant--content," said Rick Gardinier, chief digital officer of marketing agency Brunner. "Customers will flock to great content and engaging experiences, not to domain names."

Steve Stolfi, vice president of global partnerships at branding firm CT Corsearch, is more bullish on the idea. "It completely changes the landscape of the Internet and how future commerce will happen on the Internet," he said. "Now a company can have a dot-brand and deliver more personalized and individual Web services to people. For example, a major consumer products company can have .anheuser-busch, and can have all its products--budweiser.anheuser-busch, michelob.anheuser-busch, corona.anheuser-busch. A banking company could take it one step further [by offering] each one of its customers a dedicated domain, so when they're doing banking on the Internet, they would have their own secure domain."

Will security be affected?
ICANN is working to ensure security isn't worsened. There could be benefits to a generic top-level domain expansion. For example, phishing might be harder if people learn that any communication from their banks must involve Web sites or e-mail with .bankofamerica or .banking. On the other hand, new Web and e-mail addresses will be confusing to people, and confusion over authenticity and identity is a perfect opportunity for nefarious behavior.

Trust will certainly be at least a transitional issue as people see unexpected Web addresses. In the long run, though, people could end up with more faith in a branded domain than a .com, said Jim Hendler, a Rensselaer Polytechnic Institute professor who among other things has worked with the Obama administration on its government transparency site, data.gov. It's a double-edged sword, though, he believes. "I'm going to be a lot more comfortable I'm not being phished if I'm going to somebody who had to pay $185,000 to get that name," he said. "But on the other hand what will happen to the other folks who don't have $185,000?" In particular, he doesn't want to see a world where start-ups are at a disadvantage to incumbent powers. When Facebook began, "at no point did it have to go to a venture capitalist and say, 'We need $200,000 so we can be .facebook so we can play on the same playing field...this stuff strikes me that yet another way that big players are trying get an advantage."

Will some cybersquatter grab my company's name?
This was a problem in earlier days of the Internet's commercialization, but ICANN is working to thwart it with GTLDs. One mechanism is the trademark post-delegation dispute resolution procedure (PDF) that's designed to provide a way for trademark holders "to proceed against registry operators who have acted in bad faith with the intent to profit from the systemic registration of infringing domain names (or systemic cybersquatting)," according to a February draft of the process. But that doesn't mean those with trademarks will be able to sit idly by, some believe.

"Today, trademark holders are buying up domain names for brand protection. As new GTLDs come on, that will cause them to have to go out and buy more. Trademark holders may have some challenges ahead of them," said Lance Wolak, director of marketing and product management for another top-level domain, .org.

ICANN has worked to mitigate these issues with, for example, the announcement in March of a trademark clearinghouse to track registered names. "In forming this trademark clearinghouse," ICANN Chairman Peter Dengate Thrush said in a March statement, "we've listened to our community about providing trademark protection. We've also adopted an extremely rapid process by which people or organizations can challenge trademark infringement."

But worries remain. ICANN's Governmental Advisory Committee expressed strong reservations in a September document. "The GAC notes with great concern that brand-owners continue to be faced with substantial and often prohibitive defensive registration costs which constitute a negative impact on their business planning and budgeting over which they have no control. Consultations by individual GAC members with business stakeholders underline how this issue remains a fundamental downside to the expansion of the GTLD space, far outweighing any perception of opportunities for innovation and customer-orientated benefits from the creation of corporate brand TLDs," the committee said. Many large and small companies "find themselves without a sound business case to justify high levels of expenditure on large numbers of domain name registrations, most of which they are unlikely ever to use."

And of course there are two levels of trademark protection that might use branded terms: GTLDs themselves and new domains on GTLDs that don't directly use the brand name.

Valente offers assurances, though. "We tried to create brand protection mechanisms of the future, during application and afterward, that are better and stronger than what we have in today's space," she said. Defensive registration "is a common practice today," but she doesn't believe it should be necessary with the GTLD expansion.

What about legitimate trademark disputes?
In the physical world, it's not a problem when two companies in different areas use the same terms for their products or services. But trademarks can collide as technology evolves, as disputes between iPhone maker Apple and Beatles record label Apple Corps have shown. When multiple entities want the same domain and each has a claim, then bidding begins.

"If both are legitimate trademark owners, they're going to have to duke it out," Stolfi said. "The one with the deeper pockets (is) going to win at this point." That could be an expensive issue if, for example, Ace Hardware and Ace Group Insurance both want the .ace GTLD.

Is this the beginning of the end of .com dominance?
It's possible in the long run that new GTLDs could become influential, but it's way too soon now to write off .com as just another top-level domain. Today's Web user is well trained to point a browser at www.companyname.com. Most people probably don't even know .coop, .pro, and .museum exist, and some more general-purpose GLTDs such as .biz haven't made much of a dent in competing with .com.

"If you look at examples like .museum, .info, and .biz., you'll find the growth rate in general has been average across the entire top-level domain base," Wolak said. However, .com addresses still command a price premium: "On the secondary market for domain names, the names that are getting the highest dollar amount are still primarily with .com."

And even though companies might see opportunities in new GTLDs, they'd have to retrain Web users, reverse .com momentum, and potentially undermine existing brand investments, said Toby Southgate, managing director of The Brand Union, a branding firm. "Particularly with higher profile or global brands, consumer expectation and even assumption would steer towards a .com suffix," he said. "This won't be supplanted as the de facto global domain name."

 

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