"Discrete, Limited Rounds?" ICANN's Economic Analysis of New TLDs

Somewhat lost in the coverage of the recent ICANN meeting in Brussels was the release of "An Economic Framework for the Analysis of the Expansion of Generic Top-Level Domain Names" on June 16th, a copy of which is available here.

The first 10 pages, comprising the Introduction and Overview and Background sections, provide a nice overview of how we got to this point and should be mandatory reading for those how are new to the issue. The Theoretical Framework section outlines the pros and cons for the introduction of new TLDs, as well as the Department of Justice's concerns that prompted the Economic Evaluation itself. The next section consists of a survey of studies conducted by Summit Strategies, Minds + Machines, Edelman and Stahura, which makes me feel better personally to know that someone else has waded through these papers.

The final section, however, is the most useful, in the sense that suggestions are made in connection with analyzing the costs and benefits of the implementation of new TLDs. The authors conclude that analysis of domain name registration volumes, domain name resale prices, and the prevalence of domain name registrants switching to new TLDs should all be given low priority. The authors do posit, however, that the increased costs to trademark owners in connection with protecting their brands through domain name registration, monitoring and enforcement should be monitored and analyzed. The authors are also concerned with the costs to consumers due to consumer confusion and fragmentation of the Internet related to new TLDs, although that is obviously not easily measured or monitored.

Finally, the authors propose "it may be wise to continue ICANN's practice of introducing new gTLDs in discrete, limited rounds. It is impossible to predict the costs and benefits of new gTLDs accurately. By proceeding with multiple rounds, the biggest likely costs--consumer confusion and trademark protection--can be evaluated in the earlier rounds to make more accurate predictions about later rounds." That does sound wise and kudos to Michael L. Katz, Gregory L. Rosston and Theresa Sullivan for contributing to the discussion. Nevertheless, when I remotely asked the panel for "Brand Management in the Age of New gTLDs" at the ICANN meeting in Brussels the likelihood of implementing new TLDs in "discrete, limited rounds," the response was mostly chuckles.