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Username: Gregory W. Krajewski
Date/Time: Sat, January 12, 2002 at 7:36 PM GMT
Browser: Microsoft Internet Explorer V5.01 using Windows 98
Subject: The economics of a restricted TLD....The good, the bad and the ugly...


DISCLAIMER:  I am NOT an industry insider, nor am I an expert on domain name issues, nor am I someone in the "know" on any situation I comment on below.  I make my predictions based in part on personal opinion, current situations, current experiences, and research. In no way, shape or form are my comments meant to indicate absolute FACT.  My comments contained herein are meant to stimulate discussion, for or against the ideas I have layed out.  It has been proven time, and time again that every story has two sides to it.  Therefore absolute a misnomer.  The reason one idea gets promoted or thought of as the "correct" is because enough people believe it to be so.  That is where debate and discussion come into play.  That may also be the reason TM holders have been given enhanced privileges, for those thare are curious.
DISCLOSURE:  I do own generic TLDs in dot info and dot biz.  Also I have a few dot com's that aren't generic but names I am using for business.
I realize as unpopular as this may sound having restricted TLDs would be a "good" thing.  Restricted name spaces would distinguish itself from the current open name-spaces (dot com, net, org, info).  Those that have domain names in "open" TLDs right now won't have to fear more dilution of their name space with similar TLDs being rolled out.  Here is the economics of all this:  If a company is going to invest in a online company or start one, he or she has to know that the system (DNS) will not be a jumbled mess.  This "sure feeling" attracts investment, and money...without that "sure feeling" why invest? Wherever the money goes the internet (krajewski, 2002).
The bad...Speculators hate this idea of "restricted TLDs" because of the ones that have been approved to date "sound bad" and because you need to be in that industry to get one....So if you hear someone say that a TLD sounds bad, more than likely they are speculators.  Their commodity afterall are domain names that "others" want, and which they have the ability to sell.... NOTE:  I am not knocking speculators as it is perfectly legal, and a right as a free citizen to speculate within the established rules....You have stock speculators, land speculators, and now domain speculators....They have as much of a right to purchase a domain name as a TM holder, depending on the domain.  One thing that speculators need to realize is that with land speculation or stock speculation their isn't an infinite supply of "goods"....Also those industries have rules too....Another argument speculators have that I don't agree with is the  "need" for an unlimited supply.  You just can't keep the printing presses running if you want an industry to stay afloat.
The ugly....Profits, profits, profits. Restricted TLD registrars will have a hard time justifying their implementation costs (physical goods/advertising), if they will only be able to sell a few thousand domain names.  Yeah, they will be able to sell the other ICANN sponsored TLDs, but there will be a lot of costs in implementing a rollout/advertising/TM checking, etc, etc....Unless it is a "popular" industry TLD, such as dot travel it will be a tough sell.  dot credit would be another "popular" one.  Because of this I don't predict a lot of new restricted TLDs coming out...More than likely whomever is approved for a restricted TLD will be approved for more one than one TLD.  It makes sense on a business level...The company would not have to charge as much per domain as they would earn more profits than if they just were in control of one TLD.  The aspect of this which I don't like is a monopolistic type effect this would have.  ICANN would have to have guarantees as to the price the company would charge, etc...WITH LEGAL bite to it if they don't comply.  None of this change- in-policy-midstream B.S...
The other "ugly" thing about restricted TLDs is how do you police it??? If you roll-out dot travel....There are so many different type of travel related businesses, or information centers.  Where do you draw the line???  Who does the policing??  ICANN shouldn't be the heavy here...However if the industry can't police itself SOMEONE has to.  Someone has to set the standards if the standards can't be met.  Believe it or not you may end up having to create another WIPO type organization for those folks who were denied a domain because they fell outside the parameters of the TLD standard for dot "travel" (this is NOT good).....Also what of those companies who were successful in getting a "restricted" TLD such as dot travel...and after getting a domain they their business strategy... Let's say they change industries, and went into the investment industry.  Would that company lose it's domain?? I suppose they might let the domain expire.  What good would it be to have a dot travel domain if you are in the investment industry. I suppose it's back to the "open" TLD for them unless a dot invest restricted domain rolls out....But what if they want to keep the travel domain...After all they could use it for a "intranet" for in-house company travel.... can you police this...what "abritration" methods will unduly be created as a result...That would be another threat to the internet...Too many disagreements, create a legal drain..which doesn't promote innovation, promotion, etc.
ICANN will have to definitely have identify the "open" from the "restricted" if they head down this path...Will dot org, and dot net go back to being "restricted...etc  My guess is dot org will go back to being restricted...and dot net will remain "open".
So there you have it...the good, the bad and the ugly....My new "updated" predictions for new "restricted" TLDs (rollout date of 2004-05):

dot travel....
dot credit......

Both of these industries keep our economies going for the most part.  That is why I picked them...Plus they lobby their respective countries assemblies pretty hard.  One company will be chosen to run the registry...I have my idea who that will be however I digress from disclosing who might that be.

Also my prediction is ICANN will not run the TLD selection process like they did the last time (no brainer).  They will pick the TLD before any applications are taken and then there will be a bidding process for that TLD.  This is the way most other contracts are handled...however the lowest bid in this case probably wouldn't win, as the bigger registries would have an advantage.  The formula to choose a company could include whether the company already has a ICANN sponsored TLD, whether they were in the first round, and didn't get selected, and whether they have the necessary finances.  I would also like to see a situation where there are no up-front costs for applications this time...Whomever would get selected then would have the obligation for any fee set by ICANN....

That's my .25 cents worth!




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