ICANN in announcing that it would process all new gTLD applications in one batch, did so after abandoning its Digital Archery service which was its last attempt to figure out which applications to process first.
Quite a while ago ICANN rejected a first filed, first processed application approach which left them to figure out another method for selecting which applications got processed first, second, third and so on.
ICANN felt a purely random selection could be viewed as an illegal lottery since all participants had to pay to play and only governments can hold lotteries.
Basically, ICANN decided they couldn’t decide how to select applications to be proceeded and has defaulted to processing all applications together in one big batch which they expect will take a year.
The question now becomes how to roll out the new gTLD strings once the applications are approved.
ICANN correctly acknowledged if all applications are proceed in one batch and all results are announced at the same time, with the maximum number of strings of new gTLD’s limited to 1,000 in any one year, they could roll all 1,000 out at the same time, which would be disaster for the entire domain name system and all applicants.
So ICANN is now asking for comments to figure out how to “meter” or roll out the new gTLD’s in some reasonable and rateable form.
But in My view this is the same issue.
ICANN is just kicking the same can down the street.
Instead of dealing with the issue on the front end, the application end, ICANN is delaying the problem to the delegation end, but its the same problem.
ICANN has now taken the problem from how to process the applications in some fair fashion and moved the issue to the back end which is the roll out or delegation of the TLD’s once approved.
ICANN wrote the other day in calling for comments on how to delegate or roll out the new gTLD’s:
“At the Prague ICANN meeting, the new gTLD Program Committee decided to terminate Digital Archery, and instructed ICANN staff to proceed with the initial evaluation of applications as quickly as possible. This evaluation is in progress based on a tentative project plan that foresees the processing of applications in a single batch, and simultaneous release of results.”
“This comment opportunity seeks input on requirements for an evaluation and delegation process consistent with previous root zone scaling discussions of smooth delegations, adding no more than 1,000 new gTLDs per year. This outcome can be achieved by the:
a. timing of the release of evaluation results to applicants,
b. timing of the release of applications into the pre-delegation steps of contract execution and pre-delegation testing,
c. metering of delegations of new gTLDs into the root zone.”
“During the root scaling discussion, it was agreed that ICANN would not delegate TLDs at a rate greater than 1,000 per year. This is because the primary challenge with maintaining root zone stability is controlling the rate of change to the root zone system and not the size of the root zone itself, meaning delegation should not occur at a rate of 1,000 delegations on a single day.”
“The current plan indicates that initial evaluation of all applications, processed in a “single batch”, can be completed in 11-12 months, possibly less – resulting in publication of results in June-July 2013.”
“Submitted comments should specifically answer each of the following questions:
“Should the metering or smoothing consider releasing evaluation results, and transitioning applications into the contract execution and pre-delegation testing phases, at different times?”
“How can applications be allocated to particular release times in a fair and equitable way?”
“Would this approach provide sufficient smoothing of the delegation rate?”
“How can applications be allocated to a particular timing in contract execution, pre-delegation testing, or delegation in a fair and equitable way?”
That’s been the question for quite a while.
How to deal with 2,000 applications when we are only going to let 1,000 in any year, where there is vertical competition which may give some applicants a year or more head start over the others.
Its the same question.
ICANN is not moving the question from the front, the application period, to the back the delegation period and asking you, the public, to give them the answer.
ICANN is the one with the $450 Million sitting in the bank and is now asking the public to figure out the same question they have been dealing with for a year or more now, how to allocate the new gTLD’s.
I was watching the TV show the Glass House the other night that is airing on ABC and was shocked to hear ABC asking viewers to contribute prizes for the contestants.
ABC one of the 4 Major television networks in the US, that is collecting hundreds of thousand of dollars in advertising revenue for every 30 seconds is actually asking the viewing public to put up their own prizes to be awarded to the players.
In essence ICANN is doing the same thing.
After collecting all the money for the new gTLD applications, they are asking you, the public, for an answer to a problem which they haven’t been able to come up with.
Whether its during the application period, or delegation, at some point ICANN is going to have to make a decision.
ICANN is the one that allowed for an unlimited number of new gTLD’s to be applied for without having any rules in place how the applications would be processed or how the new extensions would be delegated.
The can is being kicked down the road.
Don’t let it hit you in the leg.
I wish folks didn’t have to go to extremes.
The regulation should be such that, as older gTLDs become saturated, and domain pricing becomes cost prohibitive (thanks mostly to speculators), more extensions should be offered, as needed, to maintain competition (i.e. avoid a gTLD’s monopoly), give consumers (especially those who intend to USE their domains) more options, and keep pricing reasonable.
But to roll out thousands of new gTLDs is completely nonsensical. It’s like trying to fix a watch using a tire iron. It’s overkill.
Another solution, it seems to me, is to restrict domain specualting. I know this comment will be very unpopular amoung domain speculators, but imagine an internet where the owner of a domain actually USES that domain!! What a concept. Instead of millions of domains being held by speculators intending to profit.
Want to know why regulators are going to extremes? I thank all the specualtors out there who saturated dot com, dot net, and so on, to the point where many small/starting businesses are completely priced out of the market.
Yes, I’m a capitalist. Yes, I believe in free enterprise. But domain speculating should be restricted in order to avoid new gTLDs becoming saturated by those who have absolutely no intention of using the majority of their registered domains.
@Paul
While we’re at it, lets take away five homes from the millionaire who owns six, since he isn’t using five of them.
And we’ll take away land from the landowner who owns thousands of acres that just sit there, doing nothing.
And lets take away all of Jay Leno’s collector cars, except a couple so he can drive, because he can’t use them all, and others would have fun driving them.
People who own generic domains have every right to hold them, just like any other investment or purchase people make.
Great post, Mike.
As we’ve discussed, this six month delay right off the bat is likely to be followed by additional issues which chew up a minimum of another six months. So the earliest any new gTLDs may open is probably first quarter of 2014. And that doesn’t factor in litigation and political detours.
(And, @Paul, what you call domain “speculating” is really investing and involves risk — but, regardless, very few of these new gTLDs are likely to generate sufficient traffic to attarct long-term investors; registrants are far more likely to have immediate aims.)
@ Domains
Fair comment.
However, domains are not real estate or cars. If one gTLD is saturated, regulators can always grant new gTLDs… as opposed to there being a finite amount of land on this planet, or a finite production run of any given vehicle.
If you are opposed to regulating speculators, then don’t complain about the new gTLDs coming our way, as I consider them a direct result of that saturation.
Further, domain speculating hurts small business owners and startups. Jay Leno’s cars are luxury items. No one requires his cars to operate a business. However, the specualtor who sits on whatever.com, and demands $100,000 for that domain, IS hurting small business owners who would develop that domain but can’t afford to pay a king’s ransom.
@ Philip
I hope you’re right because I’m tired of watching speculators line their pockets at the expense of small business owners.
so the more time that elapses, and the more the can is kicked, the more the IRR on the invested dollars up front diminishes, and the desert of revenue of all new tlds between now and 2014-15 will drive desperate moves in sunrise and landrush, or even preregistration fees and pre-reserving schemes, and then the inevitable will dawn on people, if the value of each new registration in a new tld is a derivative of value of a .com, propped up by a scarcity factor. then each successive tld will reduce the scarcity value of all tlds the point where no scarcity value exists, and each has to fight its own battle as to what it “gives” to the registrant in credibility and value add.
how can a new promised namespace “give” anything to a new registrant when it hasnt been implemented yet, so its “gives” a promise or future acceptance, yet the tld itself is hoping each registrant adds to its pedigree so its doesnt have to create pedigree with advertising dollars (ie .co). The registrars will only list those tlds with demand, and the registrants and registry want the registrars to boost demand with hype, the registries want the registrars to boost demand with hype, and for real customers to build in their sandbox, helping them sell more names, so each of the three parties registrants, registry and registrar wants the other two to do the work, and then reap the rewards.
by the time tlds can actually collect money, they may do almost anything to cash in quick, so then you have registry trying to cash in on their unlimited supply of premium names before the registry is established….which means poor auction results, bloom of the rose and the downard cycle will begin in much less time than the 1-5 year free ride .biz, .pro etc received.
in 2015, the common wisdom will be its much ado about nothing, stick with the com, com substitute (org and net) or cctld or shared tld (.co, .tv and .me) you already got to play with for the last two years.
nice coverage Mike, your the only one brave enough to shed some common sense on this thing, $400 million will pay for alot of denial at ICANN, its the ultimate cop-out to throw the issue back to the community to ask for fixes for a poorly thought out, rushed plan that had to get done before chairman and president left, eerily familar to 2000.
page howe
sharedtlds.com
Paul wrote:
> However, the specualtor who sits on whatever.com, and demands
> $100,000 for that domain, IS hurting small business owners who
> would develop that domain but can’t afford to pay a king’s ransom.
If a small business can’t afford to pay $100,000 (or whatever), there are ALWAYS other options. For example, if you’re a pizza place located in San Francisco, CA, and have the unrealistic dream of owning “Pizza.com,” (but the price of course, prohibits it), you could always register something like “SanFranPizza.com,” which is currently available.
Good domains are like good real estate, and the best locations, or names in this case, will cost you. Tens of thousands of acres in the neighborhood I live in were owned by a single family. Today that family is extremely wealthy because of the housing that came in and bought up the land. Nobody slapped the original owners with a “UDRP,” just because they thought they could get away with stealing the land, especially since it wasn’t in use.
Right from the get go, this was going be a cluster fuck. Most of us knew this.
Its going be mass confusion and a cluster fuck for many years.
In summary watch the 8 minute video of the gtlds mike posted a few days back. That basically sums it all up.
They can invest 20 billion in speculation or whatever. Won’t change consumer habits and now is the time to load up on pure type in traffic domains.
In the mean time, some big domainers are basically making big hedges against there portfolio. Go long but let’s buy some puts. Ok. Makes sense. But there also devalue there own portfolio as well for each commentary remark on how this will be the greatest thing for domainers.
Will some win. Sure. Just like going to the casino as well.
Pure speculation on the gtlds. Will I invest some? Probably but not much.
Laughing my ass off in the meantime.
Domains are also not real estate or cars because those markets are much more efficient. Buyers usually have a large number of satisfactory choices.
Whereas buyer of domain name can be taken to the cleaners if he has a particular desire for one .com that matches name of business. So restrictions on ownership could be more justified. Perhaps require that speculator must accept a swap that is at least equal. Eg. If business wants dudu.com, seller must accept dede.com + maybe a small cash sum for his troubles.
Perhaps the new tld’s will manage to raise somewhat the credibility of the non .com option.
maybe off topic but need to set ole Paul straight. I own over 2400 domain names. Have been paying a registratar for the continued right to own many of them for ten or more years.
My corporate website lists several currently developed businesses along with our mission statement which includes the fact that we use domain names to support our marketing advertising and ecommerce consulting services.
Over the years I have spent hundreds of thousands of dollars buying and developing domain names into online business. A lot individual consultants and business service providers have benefitted from my as Paul calls it speculation over the years. Same can be said for you MHB and hundreds even thousands of domainers.
Speculation? Yes we are all speculators including Paul
We speculate everyday that our house will rise in value, that our investments (including domain names) will rise in value, that the decisions we make each day will make us more healthy wealthy and wise.
Paul says that he believes in the capitalist system but does he? Judging by his own opinion at names should be readily available to those he feels should ugh truly own them whenever they are ready to do so. Great utopian concept but an ideology with major flaws on two major points.
1) who’ve hell is Paul to say which use of a domain name is speculation or which is the better use than any other use in a free country?
2) in a capitalist system Society loses if Paul’s choice of the best owner creates less cash flow than another owner might.
Maybe I read it wrong did he say he was a capitalist, imperialist, or perhaps he meant utopian?
Here’s to taking chances contributing to commerce and to being privy to one of the most powerful wealth opportunities of our generation .. Being a domainer!
I have an idea for how to meter the new gTLDs. I don’t have time to describe it here, but I call it “Digital Archery”.
As for Paul’s issue: Domains (specifically, .com domains) are a public resource, like radio frequencies, or mineral rights on public lands. At the moment, they are being given away too cheaply, resulting in misallocation and hoarding. If the annual registration fee were raised to $100 per year (with profits going to the US Treasury), a lot of parked domains would be freed up, and made available to those who could figure out how to get more than $100 per year of value from them (small businessmen, for example).
That isn’t socialism; that’s intelligent stewardship of public resources.
2014
Phillip,
Thanks for your “realistic” assessment.
Some “Dot Com Die hard” are happy this great idea is being pushed/delayed back and back,
I would prefer they come out “tomorrow” and remove the uncertainty factor out of the market.
18 more months of hearing about the Next Big Thing, sheesh!
-Domo
So here’s how ICANN could do it (but I can’t respond to their call for comments because of my position):
Try to manage it through attrition, like a company that has to do layoffs, or an airline that has to bump passengers.
Offer a reduction of fees or rebates, in sequentially increasing steps, to applying entities in return for agreeing to delay their TLD’s delegation, until they drop below the 1000 threshold.
But here are my paranoid musings:
Is ICANN going to conveniently only approve 1000 TLDs?
Or are they hoping that by dragging this out so long, that, especially in light of page howe’s comments, that enough applying entities will conclude through cost-benefit analysis that it’s just not worth it to run the maze and hang on until delegation, so that the new TLD universe magically drops below 1000?
Just my conspiracy theory du jour
@Avtal
“Cheap” is relative. $100 per year would still be cheap to many people/companies. So changing the price isn’t going to work. It would just have the affect of moving domains from those with less money, to those with more.
And forget about your connected idea of giving profits to the US Treasury. Thinking that small business would somehow benefit from that, is a fantasy of epic proportions.
@Avtal
Domain names are in no way analogous to a public resource. The electromagentic spectrum of minerals in the ground have real existence and a finite quantity. Domain names are are pure construction of the human intellect, and would disappear if humans disappeared (not so EM frequencies or minerals). AND we can always make more. Therefore using a similar legal regime to govern their use and allocation is extremely inappropriate.
Domain names are more analogous to money, with all the complexities that that entails. I leave it as an exercise to the students to work out the details and ramifications.
Sorry. fatfingered it.
That’s “electromagnetic spectrum or minerals in the ground”
@ Scott
I don’t expect a dot com speculator, who owns 2,400 domains to agree with me. Obviously, you benefit from the outragious multiples some domainers (perhaps yourself) expect. It’s pure greed. Let’s be honest about it. It’s not like your average domain speculator is content to make a 100% profit, 200% profit, 500% profit. No, they want profits in the thousands of % points.
There is no way to justify someone buying a domain for $10, then sitting on that domain indefinitely hoping someone pays a king’s ransom of $10,000. It’s utterly ridiculous. Is it legal? Unfortunately. Is it ethical? I don’t believe so.
A lot of business owners work very hard to add value to their customers and clients. But this is highway robbery, pure and simple.
Given so many domainers visit this website, I don’t expect my view to be shared by many here. But I bet you my view is shared by most non-domainers (i.e. the people who are forced to pay).
You can say you’ve added value in this way or that way. Mr. Mann can reference his charities while he mugs for the camera. But the fact is, people are being taken advantage of. Just because something is legal, that doesn’t make it ethical. Greed is running the show here. Let’s be honest about that. I like to make a profit in business too, but I’m not greedy. I’ve walked away from highly lucrative opportunities over what I consider to be ethical issues. Legal, but not ethical. I wonder how many domainers could/would do the same?
That’s my last word on this story.
I want to say how much I appreciate Mr. Berkens allowing me to speak my mind. I understand him to be a domainer. He could easily block my comments or even ban me from his site. The fact that he allows an open dialogue, regardless of whether he agrees or disagrees with the opinions stated therein, is commendable.