June 20, 2011

UPDATE: ICANN Approves New Domain Name System

ICANN voted on Monday to allow the creation of new website domain suffixes ending in everything from corporate names to company brands, and entertainment to political causes, as the system gets its biggest overhaul since it began 26 years ago.

The Internet Corporation for Assigned Names and Numbers (ICANN) plans to significantly increase the number of domain endings from the current 22 (plus an additional 290 country domain endings). It will begin accepting applications next year, with corporations and cities expected to be among the first takers. The address names will be able to end with almost any word and be in any language. However, the application fee for the domain suffix will be a staggering $185,000.

ICANN voted overwhelmingly in favor of the proposal at a Singapore meeting despite concerns the shift would cause confusion and would favor larger corporations.

"This is the start of a whole new phase for the Internet," said Peter Dengate Thrush, chairman of ICANN's board of directors. "Unless there is a good reason to restrain it, innovation should be allowed to run free."

"It's the biggest change I think we have seen on the Internet," Dengate Thrush told Reuters at the meeting. "We have provided a platform for the next generation of creativity and inspiration."

The new generic top-level domain (gTLD) program was approved by 13 votes to one with two nonparticipating members. The sole opposition came from a member who felt that more time was needed to hold discussions with government and other parties, ICANN officials said.

The new names could infringe on social and religious sensitivities, for instance if someone wanted to set up a .nazi domain, said Dengate Thrush. And people who have invested in securing lucrative .com domains will find the value of the holdings diluted by the new rules, he added.

Under the changes, businesses will no longer be restricted to gTLDs that include .com, .net, and .org when they apply for website registration. Industry analysts said global leaders such as Apple and Toyota could launch websites with their own domain names, ending in .apple or .toyota.

ICANN's chief executive Rod Beckstrom said applications for the new web domains will begin being accepted on January 12, 2012 and close 90 days later. "The first possible time at which some of the applications could be approved would be late in 2012," Beckstrom told Reuters.

ICANN plans to launch a campaign to spread awareness of the domain changes. So far, about 120 parties have already publicly expressed interest in the program, said Beckstrom. "If you scroll through one of those lists... You'll probably see some major brand owners, some major companies in the world, some major brands, cities, regions and other different types of communities."

ICANN's vote concludes six years of intense negotiations and is the biggest change to the system since ".com" made its debut in 1984. The expansion had been delayed largely due to concerns that new suffixes could infringe on trademarks and copyrights.

But the new system "will allow corporations to better take control of their brands," said Theo Hnarakis, chief executive of Melbourne IT, which manages online brands for clients such as Volvo, LEGO and GlaxoSmithKline. "For example, .apple or .ipad would take customers right to those products," he told the Associated Press (AP)

The increase of available domains should help alleviate some of the overlap of names in the more popular suffixes, especially .com, which has 94 million sites registered. ICANN approved .xxx in March for pornography, but some porn sites have refused to adopt the suffix for fear that it would make it easier for governments to ban them. The suffix also received criticism from conservative groups who argue that it could attract children to adult sites.

Industry watchers say they expect as many as 1,000 new domain names to be added to the suffix list, once all approvals have been met. Some groups have already shown interest for certain suffixes, including .sport, .bank, .hotel, and .eco.

ICANN said it will auction off domains if multiple parties have legitimate claims. However, it expects companies will likely strike deals among themselves to avoid public auction.

"I think we'll see much more of that going on than see auctions generating circuses," said Dengate Thrush. "But there is that prospect that there will be a couple of identical applicants and applications."

The steep fee of $185,000 is meant to keep scammers from grabbing valuable domain names, and the applications process is only open for 90 days. ICANN has also set aside $2 million to assist applicants from developing countries. "The board's very enthusiastic about providing support for applicants from developing areas where the evaluation fee or access to technical expertise might be somewhat of a bar," ICANN senior vice president Kurt Pritz told the Associated Press after the meeting.

The fee is also needed to recoup the costs associated with the new gTLD program and to ensure it is fully funded, ICANN officials said.

Only "established corporations, organizations, or institutions in good standing" may apply for a new gTLD, according to ICANN guidelines. ICANN will not consider applications from individuals or sole proprietorships.

"It's a significant undertaking. We're calling it the Olympic bid," said Adrian Kinderis, chief executive of AusRegistry International, which helps companies to register domains and manages names such as ".au" for Australia.

"But it's worth it for corporations that have suffered from things like trademark infringement, and can now carve out a niche on the internet," he told the AP.

This is "the future of the Internet," said Kieren McCarthy, CEO of .Nxt,Inc, a San Francisco-based company which covers Internet policy and governance issues. "I think our kids will think that we were crazy to always talk about .coms."


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