Last week at the ICANN meeting in Cairo, a rule book for the new extensions, hundreds or maybe thousands of them was published.

I wanted to take a few days to read through and I can now summarize these rules as follows:

Application fee with be $185,000.

In addition, applicants must pay registrar fees and the costs of addressing potential objections. The application fee also does not include the cost of running the domain once the application is finally approved.

In the event that two or more qualified applicants apply for identical or overly similar gTLDs, a string contention process will be invoked. Applicants will be informed about the contention and given time to mutually resolve the issue. If applicants are unable to resolve conflicts among themselves, ICANN will either conduct comparative evaluations to determine who is best qualified to operate the gTLD or auction off the domain name to the highest bidder.

In either case the application fee will be non-refundable.

According to the draft Guidebook, any “established entity” from anywhere in the world may submit an application to operate a gTLD.

ICANN has defined two types of gTLDs that would be available: “open” gTLDs and “community-based” gTLDs.

Open gTLDs are generally available to any established entity.

A “community-based” gTLD must address a clearly identified, organized, pre-established community, and be endorsed by that community. Such extensions this would apply to are Geo type extensions like .berlin, .paris and .nyc which all appear to have the backing of the relevant cities. The applicant for these community based gTLD must propose a dedicated registration and use policy.

Information about all applications will be posted on ICANN’s website for the duration of the application period.

According to the draft Guidebook, ICANN will review each applicant’s organizational, operational, technical and financial capability to maintain a gTLD. All proposed gTLD strings also will be checked for stability, conflict and confusion. Any strings that may lead to technical instability, unexpected results in the domain name system, or that may cause string confusion will be rejected. Additionally, a proposed gTLD string can not be a reserved name or an existing gTLD.

The Guidebook sets forth an objection mechanism that is of particular importance for trademark holders. Within a defined objection filing period, interested parties can challenge the registration of a new gTLD.

Potential grounds for objection include:

• String confusion – strings cannot be confusingly similar to an existing gTLD.  This would place in jeporady a application for .con or .met for example.  It could also stop possibly .business or .information.

• Infringement of rights – strings must not infringe the existing legal rights of others that are recognized or enforceable under generally accepted and internationally recognized principles of law.  This would be used to block some other than IBM from trying to apply for .ibm.

• Morality and public order – strings must not be contrary to generally accepted legal norms relating to morality and public order.  This one might be used to object to .xxx or .sex or like extension.  I would also be invoked if anyone was stupid enough to throw $185K to apply for .kill or .hate or worse.

• Community objection – an application will be rejected if an expert panel determines that there is substantial opposition to it from a significant portion of the community to which the string may be explicitly or implicitly targeted.  This would stop a company from applying for .newyork if the city applies for .nyc and doesn’t recognize the private company right to own .newyork.

I think this will be a huge money maker for ICANN.

With hundreds of applications at $185K each and the auctioning off of the best of the extensions will generate $10’s of million of dollars for ICANN.

It is also a very interesting opportunity for all domainers to consider whether to sponsor an extension.

Costs will be high but so will the rewards.

Just the premiums collected from a portion of the reserved domains that will be auctioned off in .me or .mobi fashion should repay all upfront costs and fees (exclusive of marketing).

You don’t need millions of registrations to make the registry profitable.

Just a few thousand premium sales.

The risk is of course multiple applications.

If the fee is non-refundable then you basically have to expect a bidding war for some of the most sort after extensions.  If you lose the bidding war you also lose your $185K.

The second problem is that there will be very lightly more than one competing extension for a topic submitted.  for example you might see an application for .xxx, .sex, .porn.

Likewise you might see an application for .law, .lawyers., and .attorney.

Do all of them get approved?

Why not.

I don’t see anything in the rules that prohibits it.

Since none are existing extensions there can be no objection to them on grounds of confusion to “existing” extension.

If multiple extension covering the same field are allowed to be created, a registry of one of them, will have immediate and substantial competition out of the box.

Interesting days lie ahead.