An article in Slate magazine last week discussed ICANN and the New gTLD program, specifically the DotHIV initiative. It pointed to DotHIV as an example of something positive that’s come from the New gTLD program, but excoriated ICANN for creating new domains, describing the program a number of times as a modern day “boon-doggle” and likening new domains to “modern day derivatives.” Ouch.

The derivative metaphor (and quote in the article) originated from Esther Dyson’s Congressional testimony in 2011. Dyson is a former CEO of ICANN, a tech investor and a respected figure in the internet space. The quote, article, and other comments from observers recently about the new domain space is indicative of serious skepticism by the public, particularly businesses, as to the need for the new domains and ICANN’s ability to properly regulate a much larger domain space. This skepticism seems to be growing as more domains are coming online.

In this context comparing the new domain space to derivatives is not an accurate metaphor, but it is a good way to make a point. Specifically, ICANN isn’t doing anything as subversive or shady as peddling sub-prime mortgages to pension funds as AAA rated securities, and it’s not putting the world economy at risk (at least not right now). But there is rampant skepticism about ICANN’s ability to regulate a much larger domain space and who is actually being served in the new DotAnything world. There are good reasons for this.

First, most trademark and business owners see the new domain space as entirely unnecessary. They already have names/domains secured and don’t want to have to register new ones or police more registries. The Slate article cites this Forbes piece about cybersquatters taking web addresses (like Adidas.clothing) of known brands in new domains. This is the first thought that most business owners have about the new registries, they simply provide more places for squatters and scammers to register confusing domains.

Second, every internet user has mistakenly landed on a domain parking page, where the domain name is for sale and ad links are offered. While some people have sold “generic” domain names for huge sums of money (business.com famously sold for $345MM) there are times when a domain name is being offered for sale at a premium because it’s similar to or associated with a business or brand name – making it valuable to that business. The premium is essentially the “nuisance” value of having to take administrative or legal action and has become a cost of doing business. This strikes most people as unfair.

On the flip side, having to register domains to prevent others from doing so is not appealing to most businesses – nor is maintaining stagnant domain portfolios. In the dispute over whether .vin and .wine should both be new domains several European governments and wine groups have objected to the new domains. An article in the NY Daily News noted the dispute, explaining the issue between the parties:

“Wine industry groups in Europe, California and elsewhere keen on defending appellations with valuable reputations such as Bordeaux or Napa have complained the new domains could harm them.

Wine makers also fear having to pay to register their names at websites in the new online terrain solely to stop online addresses from being used by imposters or in ways that could spoil reputations.

Three French government officials last week asked the European Commission last week to block any new .wine and .vin extension without protection for geographical origins such as Bordeaux or Napa. The letter said the process has become ’emblematic of Internet governance that is out of control.'”

Lastly, there are some bad registrars (companies that allow users to register domains) in the marketplace that make life difficult for users. Sloppy interfaces, constant up-sells, blocking transfers, spam, spotty customer service and other issues are common complaints from users of some registry services. But the first place many users find out about the new domains are at their registry provider’s websites – where skepticism meets the up-sell for new domains. This is one of the reasons that Google has decided to enter the domain registration marketplace – it thinks it can do a better job than existing companies.

In sum, undoing the perception that the new domain program is a scam of some sort will take a coordinated effort between ICANN, registry providers, and even businesses like DomainSkate that are trying to protect brand owners and also guide them in a way that is smart, effective, and ultimately profitable for their business. This will require honesty about the drawbacks of the program and education on the potential upside. Programs like the DotHIV initiative have the potential to show the best side of what an increasingly web based world can gain from new domains that are doing good work. Further, having a company like Google enter the registrar market could not only legitimize the new domain program by association, but also raise global awareness and education about the new domains.

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