First impressions of the “dot.anything” world

By Jason Miller, Fellow, WIPO Arbitration and Mediation Center

Just a few years ago the Domain Name System comprised a handful of generic Top Level Domains (gTLDs). Today there are over 1,000 Top Level Domains – with still more set to come online. Familiar gTLDs like “.com” and “.net” now share the internet with newcomers such as “.online” and “.ngo”. The Domain Name System is becoming a “dot.anything” world.

The Internet Corporation for Assigned Names and Numbers (ICANN) – which oversees the Domain Name System (DNS) – has predicted that its “New gTLD Program” will transform the way people use the Internet by introducing competition, choice and innovation. At the dawn of the expansion, the author of a 2012 WIPO Magazine article on The Evolving Domain Name Landscape wrote: “Only time will tell what the impact of ICANN’s introduction of over 1,000 new gTLDS will be on brand owners and the internet-using public.”

What have the last three years revealed about ICANN’s DNS expansion plans? Have ICANN’s predictions been borne out, or has its New gTLD Program fizzled? The answer may differ for domain name prospectors, the general public and brand owners.

The 2012 expansion

ICANN began accepting applications for new gTLDs in January 2012. Entities ranging from brands (“.hsbc”) to municipal governments (“.nyc”) to non-profits (“.hiv”) applied.

ICANN received 1,930 applications from 60 countries and territories. Around 47 percent of applicants were North American, 35 percent European and 16 percent were from the Asia-Pacific region. South American and African applicants accounted for the remaining 2 percent. Reflecting the Internet’s global reach, ICANN received 116 “internationalized” applications for gTLDs in, among others, Arabic, Chinese, Cyrillic, Devanagari and Greek script. These include, for example, .公司 (Chinese for “.company”), and .онлайн (Russian for “.online”).

The first of these new gTLDs (. شبكة or .shabaka – Arabic for “.web/.network”) went live in October 2013, and as of now over 700 TLDs from the 2012 round are live on the internet. 

Building new gTLD awareness

ICANN launched the 2012 program ostensibly to increase consumer choice, in part by facilitating competition among gTLD operators (known as “registries”). Would-be domain name registrants are no longer limited to a narrow range of options to the right of the dot. An attorney, for example, can now hang a digital shingle in the “.lawyer” or even “.abogado,” “.attorney,” “.esq,” or “.law” registries.

In the newly crowded domain name market, registries must promote their name spaces to survive. Some tout the expressive potential of their offerings. The “.sucks” registry, for example, has put up a billboard outside Boston’s Fenway Park baseball stadium proclaiming “NEWYORK.SUCKS,” using the longstanding sports rivalry between the two cities as an eye-catching example of how its gTLD could be a platform for debate. In reality, however, users visiting ”newyork.sucks” are greeted with an invitation to register their own “.sucks” domain name. Indeed, while the “.sucks” registry has trumpeted itself as a platform for criticizing others, it has itself faced mounting criticism for preying on the enforcement concerns of brand owners and extracting registration fees upwards of USD2,500 when members of the public are charged less than USD250. US Senator Jay Rockefeller called this a brazen “shakedown.”

Others promote the authentication value of their strings. The “.vote” TLD, for example, is being marketed to political campaigns as something of a “seal of approval” for internet users, as only those officially associated with a campaign can register “.vote” domain names. They will have competition, though, from “.voto,” “.democrat,” “.republican” and even “.gop” in the United States. 

Still other registries market their new online identities through “founders” programs. The “.nyc” founders program, for example, sought 50 applicants whose “work embodies the spirit and opportunity of New York City.” Those chosen included New York City-based nonprofits (Bike New York; “bike.nyc”) neighborhoods (Flatiron District; “flatirondistrict.nyc”) and local culture (Gothamist; “gothamist.nyc”).

Whatever the strategy, new gTLD registries are determined to build end-user awareness to avoid becoming digital ghost towns. 

New gTLD adoption among domain name registrants

Three years into the program, no new gTLD has come remotely close to displacing the popularity of “.com” or “.net” among domain name registrants. The first quarter of 2015 closed with 294 million total domain name registrations across all Top Level Domains (i.e. both gTLDs and ccTLDs): 117.8 million registrations were in “.com” and 15.1 million were in “.net,” together accounting for approximately 45 percent of total registrations.

New gTLDs, by contrast, accounted for only 4.8 million registrations by the end of Q1 2015, or 1.6 percent of total domain name registrations. However, even these modest registration numbers may indicate a misleadingly high user adoption level, as some registrars have apparently gifted domain names in new gTLDs to registrants.  

Moreover, the majority of these registrations do not appear to be in use. According to www.ntldstats.com, as of August 7, 2015, 78 percent of registered new gTLD domain names are “parked”, meaning that they resolve to “pay-per-click” websites without developed content.  

New gTLDs and internet users

It is no coincidence that, just as legacy gTLDs remain popular among domain name registrants, they also remain popular among Internet users. According to Quantcast, which ranks websites based on monthly visitors from the United States, 95 out of the 100 most popular websites – all legacy gTLDs - were in “.com” and receive between 13 and 207 million US visitors per month.  By contrast, as of August 2015, the most popular new gTLD website in the United States is the parenting blog www.beingamom.life, with only 960,733 monthly US visitors.

New gTLDs and domain name investors

The fact that new gTLDs account for less than 2 percent of total registrations and fall well short of “.com” web traffic does not mean they cannot be valuable assets. Recently, “autism.rocks” was sold for USD100,000. Industry commentators were quick to point out that this price is ten times higher than that paid by the same buyer for the “.com” variant of the domain name (“autismrocks.com”). While the prices in blockbuster “.com” sales dwarf those so far observed for new gTLDs (“IG.com” sold in 2013 for USD4.7 million, for example), domain names in new gTLDs can still trade as valuable commodities

New gTLDs and brand owners

While hundreds of brand owners have now applied for their own “.brand” TLD, many more brands chose to sit out the 2012 round because of uncertainty surrounding consumer adoption. For the same reason, most of the brands that did submit applications (34 percent of all applications) are in wait-and-see mode. A few early movers such as Barclays Bank have begun migrating their web presence; the “barclays.com” domain name now redirects to “home.barclays”, a highly restricted, secure new online space. For banks that missed the new gTLD application window, there is “.bank”, a verified and secure online location limited to registry-approved banks.  

Brand protection in the expanded gTLD world

Brand owners were understandably worried that ICANN’s New gTLD Program, if not executed with appropriate controls in place, would bring about a massive increase in trademark infringement and consumer fraud. To address these concerns, and to garner community consensus to launch its program, ICANN implemented a handful of new trademark protection tools. Their utility, however, remains in question. 

Dispute resolution

So far, the WIPO Arbitration and Mediation Center has administered nearly 400 cases involving new gTLDs under the WIPO‑initiated Uniform Domain Name Dispute Resolution Policy (UDRP). This represents a small but growing proportion of WIPO’s annual UDRP caseload. Brand-owner UDRP enforcement budgets, however, largely remain focused on legacy gTLDs (predominately “.com”).    

In terms of new gTLD enforcement efforts, from the combined URS (Uniform Rapid Suspension) (see box) and UDRP experience, brand owners seem to be primarily monitoring new gTLDs with significant registration volumes, or those which reference their industry (e.g. “canyon.bike”, “coit.cleaning” or “cliffordchance.attorney”). Even when brand owners deviate from this more narrow approach, they are focusing enforcement efforts on domain names that exactly match their marks – declining for now to chase after domain names comprising infringing typos.

For brand owners wishing to forgo curative URS or UDRP proceedings, those with their marks in the TMCH (Trademark Clearinghouse) (see box) can preemptively acquire domain names matching their marks through registry Sunrise Periods. Of course this comes at a premium – often costing as much as ten times the ordinary registration fee. It seems likely that because of the sheer volume of new gTLDs – not to mention increasing pressure on enforcement budgets – brand owners are circumspect even about using this preventative enforcement tool.   

The jury is still out

Whether ICANN’s New gTLD Program will have the predicted transformative effect remains to be seen. Registration numbers and web traffic are modest even in the most popular new gTLDs, and “.brand” adoption remains in its infancy. It is still early days, however, and many of the most popular new gTLDs (which had to be auctioned off under ICANN’s rules) have yet to launch.

In addition, registries are counting on users seeking new gTLD alternatives to domain names held by “.com” speculators, and their preference for the simplicity of shorter, sleeker domain names available in new gTLDs. Beyond these incremental developments, however, more interesting effects of the DNS expansion may lie ahead. Trailblazers such as Amazon and Google (both applicants for many “.brand” and “keyword” strings) may start looking outside the confines of today’s business model of merely reselling domain names. Domain names may also find application beyond alphanumeric identifiers, for example, use in connection with the Internet of Things, or with other  as-yet unforeseen and innovative endeavors.