Icann to expand domain despite web of protest

The non-profit organisation that oversees internet domain names has said it will go ahead with plans to create several hundred new suffixes to rival .com and .net from January 12, despite intense pressure from big companies and US lawmakers to delay or limit the programme.

“Many of the recent concerns expressed about the new top-level domain program are more about ‘perceived’ problems than actual deficiencies,” says Steve Crocker, chairman of the Internet Corporation for Assigned Names and Numbers (Icann).

Big companies such as Procter & Gamble, eBay, Hewlett-Packard, Kellogg and Kraft oppose the plans, which they estimate would cost each company an extra $2m on average in having to protect trademarks across hundreds of new internet domains. They are also concerned about increased customer confusion and online fraud.

The Association of National Advertisers, a US trade body whose members include Coca-Cola, Gap and the Ford Motor, has mounted an extensive lobbying effort in Washington against the internet domain programme, involving more than 160 companies and trade associations. This has resulted in two Senate hearings and a series of letters from congressmen, the Federal Trade Commission and international organisations, all calling for delay.

“You are going to place a tax on the internet ecosystem costing billions of dollars, but we haven’t seen any cost-benefit analysis. We don’t believe there is a need for this programme,” says Bob Liodice, chief executive of the ANA, who has not ruled out a legal challenge to the plan.

However, Mr Crocker points out that Icann has debated the internet names plans over six years and run pilot programmes related to the expansion.

The National Telecommunications and Information Administration, the US Commerce Department unit that oversees Icann’s contract to administer internet names, has also asked the organisation to address concerns, but it stopped short of asking for a postponement and robustly defended the Icann programme during Senate hearings in Washington last month.

The NTIA is keen not to undermine Icann for fear that it could lead to internet governance moving away from the California-based organisation to a a body like the United Nations. In that case countries such as China and Iran, which favour restrictions on internet use, could have more influence over online policies.

Consultancies that help companies manage their internet names are expecting up to 1,500 organisations to apply for new suffixes such as .deloitte or .sport. Many community groups have already been open about plans to apply for names such as .london, .nyc and .scot, as well as .eco for green industries. The Public Interest Registry, which currently runs the .org domain is planning to bid for .ngo, which it would make into an internet hub for non-profit organisations.

Companies have been more reluctant to publicise their plans for fear of giving away their branding strategies. Canon, Hitachi and Deloitte are among the very few that have openly stated plans to apply for a name. Around 80 per cent of the 350 companies that have expressed interest are from outside the US, though American companies are beginning to consider applications, says Stuart Durham, sales director at Melbourne IT, the domain name consultancy.

“We’ve seen more US companies come off the fence recently,” he says. “Many were expecting the lobbying by the ANA to slow the process down but now that does not seem to be happening. We have got some fairly significant interest.”

Companies will pay $185,000 to apply for a new top-level domain, and the list of applicants will be published by the end of April. The first of the new domains could be operational in 2013.

The high application fees are raising a secondary concern over Icann’s ability to manage a vastly increased budget. The expected 1,000 or more applications would at least triple Icann’s current revenues to around $200m a year and the final number could be far higher. If more than one party is interested in a particular name, the winner could be decided through an expensive bidding war.

Around $60,000 from each application will be set aside to fight any lawsuits arising from the domain name process. Icann is already facing a legal challenge over its decision to allow the controversial .xxx domain to be created for internet sites containing adult material. The remainder will go towards paying the lawyers and consultants at companies like Ernst & Young and KPMG, for processing the applications.

Although the application fee was calculated to be revenue neutral, some members of the internet community are concerned that it will create a sizeable profit for the NGO.

Kurt Pritz, senior vice-president of stakeholder relations at Icann, says any surplus money would be earmarked for either lowering application fees in the next round of domain name applications, or used to fund public service internet projects.

“We have talked a lot about creating the foundation but it is hard to establish without knowledge of how large the available funds would be,” he said.