Web heavyweights like Google and Amazon made an early bet on a massive real estate expansion about to sweep the Internet — and concerned lawmakers on Capitol Hill looked flat-footed in comparison.
The International Corporation for Assigned Names and Numbers, the California-based nonprofit set up and granted autonomy by the U.S. government, announced it received nearly 2,000 applications to open up new URL endings like .vegas, .LOL, .book and .sucks.
More than 1,000 names could potentially go live by late 2013 — a threat to the almighty .com.
Several lawmakers are nervous that allowing so many new names could cause consumer confusion, threaten the intellectual property of trademark owners and force corporations to buy their brands and names — not to actually use but to keep them out of the hands of others.
But efforts to slow down the change, including hearings held in December, didn’t keep the industry from forging ahead — a reminder that fast for Congress still isn’t cyberspeed.
“I wish they wouldn’t do it,” Sen. Jay Rockefeller (D-W.Va.) told POLITICO on the eve of the announcement. “But they’re their own people. They make their own decisions.”
And so on Wednesday, ICANN revealed its mammoth list of the possible new generic Top-Level Domain names that may, by late 2013, join .com and 21 less successful cousins that already exist.
“This is an historic day for the Internet,” ICANN president and CEO Rod Beckstrom told those assembled to witness what they dubbed “Reveal Day” in London. “The Internet is about to change forever.”
New domains also will, for the first time, feature non-Latin characters such as those in Chinese or Cyrillic.
The list was a bonanza for geeks, a peek into where big names like Amazon.com and Google think the Internet is heading. Amazon applied for about 70 different domains ranging from the obvious — brands it owns like .amazon and .zappos — to more general names like .coupon and .wow.
At $185,000 per application — it’ll cost $25,000 a year to keep the gTLD once it is assigned — that means Amazon spent more than $12 million.
Several big brands including Delta, Aetna and Toyota did apply, but others — Coca-Cola, Kraft and Pepsi — sat out. T.J.Maxx is applying for .tjmaxx, .tjm as well as .tkmaxx, its European name.
A few domains may be particularly worrisome for political candidates and well-known companies — among them .sucks, .fail and .exposed. Beckstrom, asked during the London event about the potential for use of those by people angry with brands, hinted that there will be reviews of the intent of the potential domain owners before names are granted.
Indeed, ICANN’s announcement was the first phase of the process, and the first new top-level domain names most likely won’t appear in use until late 2013 at the earliest.
Several URL endings saw more than one application — .llc and .shop had nine each, .cloud had seven, .poker and .gay both had four — and those disputes will be resolved via auction if the applicants can’t come to an agreement on their own.
Many companies and organizations joined the rush, buying up brands and corporate names including .aarp, .tiffany and .staples; L’Oréal spent $2.4 million applying for 13, including .hair, .beauty, .makeup and .skin. The NBA grabbed .nba and .basketball and Major League Baseball snapped up .mlb and .baseball, but the NFL was content to apply only for .nfl. Two other companies are applying for .football.
Few major brands had much trouble being the only ones to apply for theirs. Coach has a competitor seeking .coach and TV network BET has three competitors for .bet.
But businesses had been lobbying lawmakers on the change and Congress has been less than pleased with ICANN’s decision to move ahead with these additional domains despite their objections. Some lawmakers have feared the additional names could constitute a shakedown of sorts for companies large and small who feel they must play online defense. Domains that have more than one qualified applicant will be sold at auction, where the price is likely to escalate.
The pleas were ignored, mainly because ICANN insisted it was devising a process to protect trademarks and consumers.
“I still have concerns about this plan and its potential to put consumers at an increased risk for online fraud and place an unnecessary financial burden on businesses,” Sen. Amy Klobuchar (D-Minn.) told POLITICO in a statement. “I urge ICANN to take all necessary steps to protect consumers and address the concerns raised by businesses, non-profit organizations, and law enforcement agencies.”
“ICANN listened to the complaints, not just from Congress but also from the [Federal Trade Commission], but didn’t change much of anything in response that I could see,” Esther Dyson, ICANN’s founding chairwoman, told POLITICO. Dyson, now a prominent tech startup investor and philanthropist, strongly opposed the addition of new top-level domains.
Dan Jaffe, government relations vice president for the Association of National Advertisers, said he is watching the ICANN rollout nervously. Jaffe also tried to persuade ICANN to do a smaller round of new names. The ad industry fears consumers will be confused by so many new names.
“We’re trying not to stand as a barrier to this process but as a major player in this process and also to protect consumers,” Jaffe said.
Beckstrom bristled during the press conference when asked by POLITICO to respond to the notion that the organization ignored Washington’s wishes in forging ahead.
He cited several new protections against “bad actors” taking on the trademarks of well-known companies, including a 60-day comment period that began Wednesday as well as a variety of methods through which trademark holders can contest, complain and seek relief. ICANN, he said, has retained authority to strip an administrator of a domain name, a power it didn’t have on the existing names.
“To suggest this program hasn’t listened to the concerns lacks credibility,” he said.
Still, the trade group Software & Information Industry Association issued a statement after the release of the list proclaiming ICANN’s safeguards against mischief “inadequate.”
“Now that the scope and content of applications are known, ICANN will have another opportunity to address intellectual property concerns, and must do so,” SIIA attorney Scott Bain said. “While some gTLD applicants are voluntarily providing more protection than ICANN requires, this is not the case with all applicants.”
One reason why lawmakers and lobbyists may have felt ineffectual is that they only started speaking up recently, arriving late to a long-standing conversation that started years ago.
“I think a lot of the activity in Washington has been in the past six months or a year, but the overwhelming framework was in place long before Washington began looking into this,” said Chicago-based intellectual property attorney Paul McGrady, who is shepherding about 30 top-level domain name applications for various clients he declined to name. “The activity in Washington involved a lot of people who woke up to the issue a year ago.”
Meanwhile, the whole thing could be much ado about nothing.
Ron Jackson, publisher of Domain Name Journal, believes .com will remain the undisputed champ of the Web for years to come.
“I don’t think .com will be impacted at all,” Jackson told POLITICO. “In fact, I would bet that aftermarket values of .coms will increase as the market becomes flooded with so many lesser-known alternatives.”
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