Comments on Economic Framework

[Jon Nevett <jon@xxxxxxxxxx>]

        Please accept the following comments related to the Economic Framework 
Study authored by Katz, Rosston & Sullivan.



        Based on community input, ICANN commissioned yet another study of the 
economic framework related to the New TLD program.  The comprehensive study 
discusses the potential benefits and perceived costs of New TLDs.  It is 
interesting reading and will be fascinating from an academic perspective 
whether the assumptions and hypotheses contained in the report end up being 
accurate or not. 

        Unfortunately, the study did not have the benefit of the recent launch 
of the .co ccTLD as a data mark for the potential demand in New TLDs.  With 
only ten registrars permitted to have a direct link to the registry, it has 
been reported that the .co registry had more than 100,000 names registered 
after the first day of general availability, and that is with some of the 
strongest trademark protections available in any ccTLD.

        There is nothing in the study that should cause further delay in the 
introduction of New TLDs or change the implementation plan for New TLDs.  Some 
anti-New TLD advocates have pointed to one sentence in the 64-page report that 
suggests that ICANN would be wise in continuing with the New TLD roll-out in 
“discrete, limited rounds” as an argument to delay or change the implementation 
plan. 

        ICANN is, in fact, recommending in DAGv4 that it introduce New TLDs in 
discrete, limited rounds.  New TLDs will not be able to be “registered” at any 
time by anyone in the world as we currently have with second-level domain 
names.  There will be a discrete window to apply for these names that will open 
and close.  All applicants must pass a background check, meet the stated 
qualifications, establish that they have the technical ability to run a 
registry, and meet all financial criteria.  They also will have to have a 
minimum of approximately $1M to file a New TLD application.  Therefore, this 
round will be limited in duration, to a discrete group of entities that can 
meet very limiting qualifications. 

        In making its policy recommendations, the GNSO rejected the “beauty 
contest” approach to accepting applications based on categories or applicants.  
The economic report does not recommend that ICANN go back to that rejected 
concept. 

        Furthermore, due to the nature of the evaluation, objection, and 
approval processes, all of the names that are applied for this round will, in 
practice, enter the root in batches or phases.  As ICANN is committed to 
further rounds of New TLDs, it could use the experience of this round and make 
any necessary adjustments prior to future rounds as recommended in the study.