Single Letter Domain Name Allocation
I would like to submit the following personal comments regarding the allocation of single letter domains at the second level. To begin, I would like to analyze the specific wording contained in the relevant GNSO policy recommendation: We recommend that single letters and digits be released at the second level in future gTLDs, and that those currently reserved in existing gTLDs should be released. This release should be contingent upon the use of appropriate allocation frameworks. MORE WORK MAY BE NEEDED. (Emphasis added). Reserved Names Work Group Dynamics: As a participant within the Reserved Names Working Group, it is helpful to shed a little light upon the genesis of this exact wording from my perspective. There were a diverse range of interests that constructively participated in the working group, and I consider it one of the more positive ICANN experiences in which I have participated over the years. During the working group's consultation, it was explained how ICANN accredited registries had already used the existing PDP approved funnel process to allocate two letter "reserve names". However, there were other participants that appeared to favor a more regulatory (i.e. one-size fits all) approach that would be mandated on all gTLD registry providers through a PDP. Through the leadership of the chair and the professional and collegial attitude of the working group members, the final recommendation as stated above was approved unanimously. Registry Allocation Innovation: It has become clear to even a casual observer of the domain name industry, that ICANN's limited expanse of the domain name space has not yet created the desired level of competition as original expected. Therefore, the primary challenge confronting new registry operators is how to spur adoption and use of their TLD. Simply relying upon Sunrise and traditional first come first serve (FCFS) models is not sufficient. History has repeated shown that corporate entities are most likely to defensively register their domain names and then redirect them to their existing .com site. The other likelihood is that professional registrants will figure how to game the particular allocation system of a registry and the secure the domain and either resell it or park it to generate PPC advertising. Unfortunately neither of these circumstances actually help the registry/sponsor build its brand. Consistent with the competitive and innovative principles upon ICANN is built, new registry operators have learned from its predecessors and are adapting to find new ways to make sure they identify the best people to help build the brand of the registry. Two recent examples worth noting are the Premium Name allocation process of .MOBI, and the Pioneering Process of .ASIA. In each of these examples the registries have used a mix of RFP and auction processes to allocate domain names in an equitable process, other than a traditional FCFS process. These processes, particularly in connection with RFPs, empower the registry to indentify registrants that are willing to make a commitment to the long term success of a TLD. ICANN's HISTORICAL DEFERENCE TO REGISTRIES VIA THE FUNNEL REQUEST PROCESS REGARDING RESERVED NAME ALLOCATION: Single letter domain names are reserved under the same legal provision as two letter domain names in the current registry agreements. This is relevant because ICANN to date has allowed several registries to un-reserve and allocate two-letter reserved domain names through numerous funnel requests. It is important to note that at no time did the community seek to mandate a one-size fits all approach, nor extract addition revenue from these registries. In fact, there appears to be a diversity of the different mechanisms proposed by the registries properly tailored to their respective business needs. ALLOCATION OF A LIMITED RESOURCE: In the announcement accompanying the commencement of this public forum, ICANN stated that "[s]ince revenue will result from this allocation, comments regarding the potential uses for this revenue are also requested." As an organization that is primarily tasked with the technical coordination of the Internet's Name and Numbering system, I find it somewhat troubling that ICANN feels that it is part of its mandate to analyze "potential uses" of additional revenue that a registry operator might recognize through the normal operation of its business. More troubling is that some commentators appear to have embraced this position under the auspices that this is a limited resource. However, when one looks to the very real reality of the exhaustion of The IPV-4 space, we see no action by ICANN or the community to decide how money can be extracted through the RIR's business operations to fund other ICANN initiatives above their existing contributions. Unfortunately, the gTLD space continues to be the primary source (over 90%) of ICANN's continuingly expanding budget. If ICANN believes that it needs more money to fund its continued growth, than it should look to other non-gTLD sources as oppose to the gTLD sources that continue to bear the financial burden of ICANN's operations. .COM TAIL WAGGING GNSO POLICY DOG Some of the other commentators talk about the potential financial windfall that registry operators might recognize if they were permitted to allocate these reserved names with no oversight or regulation. However, the evidence associated with the allocation of two letter reserved names by other registries have shown that not to be the case to date. Although most people do not want to talk about it publicly, they are just opposed to the idea of VeriSign pocketing the substantial revenue (likely tens of millions of dollars) associated with the potential auction of single letter second level .COM domain names. Unfortunately, this is yet again another example of how the .COM tail, wags the GNSO policy development dog. The reality of the situation is that the potential auction of highest single letter .COM name would likely exceeding the total value of all other non-legacy gTLDs single letter auctions combined. That is why I feel so strongly that registries should be able to use the existing funnel process to determine what process works best for their registry and/or community. A uniform one size fits all approach simply does not work, and is not in the best interest of competition and innovation. Through the funnel process, the ICANN community already has built in safeguards to ensure that the new proposed registry service is an "appropriate allocation framework."