E22 Context Of The TLD Within The DNS
This Section, E22, will give a general review of the reasons for and the expected benefits of the New TLD. In the light of this explanation, we will then give specific answers to the questions E22 - E27.
We believe that the SLD registration processes should create an Internet environment that supports those who wish to achieve a business, organizational, or personal goal by creating a website. It is arguable, however, that the vast majority of registrations of SLDs actually work against this objective. Five Million .com names were registered in the first quarter of 2000. A very small proportion point to an active website. Names are being purchased on mass, but mainly by cyber-hoarders. Domain name speculation has become the hottest game in town. Since "wines.com" sold for $3 Million, and "business.com" sold for $7.5 Million, everyone wants a piece of the action. A European customer has apparently bought 20,000 names preceded by the string "24hour": 24hourdrug.com, 24hourpizza.com, etc. (this is only hearsay... but from a source we believe to be reliable).
Basically, we have reached a situation where almost none of the "good" names (those which are a single word or a recognizable phrase) are available in the .com TLD, and the vast majority are held by cyber-hoarders. This creates a problem for the genuine Internet entrepreneur who is often either forced to pay many thousands of dollars to a cyber-hoarder or to settle for a second best name.
We believe that it is not possible to solve this problem simply by adding to the number of unrestricted TLDs. If a TLD looks like it’s becoming successful, cyber-hoarders quickly buy up the names. For example, if a ".flowers" domain is created cyberhoarders will instantly buy "roses.flowers", "springflowers.flowers", "sendmeflowers.flowers" and so on. Once again, the genuine business owner will be at the mercy of name speculators.
The New TLD that we propose would go a long way towards solving this problem. Each application for the New TLD will be assessed according to the criteria given in Sections E16.6.1 and E16.6.2 of this proposal, and only approved if this assessment shows that the Applicant is a real business. In addition, we will place heavy restrictions on transfers of SLDs (as described in Section E16.11.1). These measures will almost completely prevent speculation in names under the New TLD.
The Uniform Dispute Resolution Policy has gone a long way to prevent they inappropriate use of well-known trademarks of others. We propose a slightly extended version of this policy (as described in Section E6.); however, it does not solve all of the problems. Firstly, the victim of such an infringement is still forced to go through the inconvenience of bringing the matter to arbitration. Secondly, it is possible that the owner of a famous trademark could remain unaware for some time of the inappropriate use of their mark. For example, it is conceivable that sites making use of misspelled well-known names could exist for some time without the true owner of the mark becoming aware of the fact. For example, at the time for writing “morganstanly.com” (misspelling of Morgan Stanley) advertises travel, and real estate services. Once again, the proposed New TLD would go a long way towards solving this problem. All applications will be checked for blatant intellectual property infringement as described in Section E5.0.2, and all names applied for will be listed in the Listing of Names Applied For as described in Section E5.0.4. We believe that these elements combined with the cost and effort involved in application, and the likelihood that the application will be rejected or lost through arbitration proceedings, make it less likely that Applicants will register common misspellings of famous names under the New TLD.
E23 Distinguishing Features of TLD
All applications will be assessed according to simple criteria (see Sections E16.6.1 and E16.6.2.), and only be approved if the Applicant is a real business and if the name does not make inappropriate use of an existing trademark. By only supplying .biz SLDs to real businesses, we will ensure a continuously available supply of names to those that actually intend to do business on the Internet, and we will prevent Domain Name speculation by cyber-hoarders under this TLD. We also believe that the availability of names under the New TLD to genuine entrepreneurs will have the effect of considerably reducing the prices of hoarded .com names and reducing the overall level of cyber-hoarding throughout all TLDs.
The New TLD will also benefit the Internet community by screening applications for those that make inappropriate use of a trademark or of a famous mark. Despite out best efforts, we expect that there will be some disputes over rights to name after registration. We do expect that this will happen much more rarely than in the unrestricted TLDs.
Essentially, our advantage is that we are charging a price for registration which allows us to review each application individually, and therefore make the best efforts to ensure that the Applicant is a real business and does not intend to make inappropriate use of another's intellectual property.
E24 Community Served
The TLD will target the business community for businesses of all sizes. This community is already served by the DNS, but as described above, the level of cyber-hoarding has made the situation very difficult for business wishing to obtain an appropriate name without paying a heavy ransom to cyber-hoarders.
E25 & E26 How Proposal Meets Unmet Needs and How Would it be Useful to Internet Users?
See the answer to E22.
E27 Enhancement of Competition
This proposal does not significantly enhance competition among registration services. We believe, however, that the New TLD would create a viable and popular alternative to the .com registry run by Network Solutions.
E28 Value Of Proposal As A Proof Of Concept
E29 Concepts Likely To Be Proved Or Disproved.
The proposed New TLD will serve as a "proof of concept" in a number of ways:
(a) The .com, .net, .org TLDs and all of the publicly offered ccTLDs are unrestricted and award all SLDs either on a first-come, first-serve basis, or in the case of the .tv TLD, to the highest bidder. No TLD currently uses a manual assessment procedure. We hope to prove that the New TLD will demonstrate the viability of using such manual assessment procedures to more effectively screen applications.
(b) The proposed New TLD is not going to be attractive to all businesses. It may, however, prove very attractive to a significant minority. What is the effect on the Internet of having a popular “niche TLD” of this type?
(c) Because of the time and the complexities involved in such screening procedures, the cost of SLDs under the New TLD will be set at $2,000. We hope to demonstrate that Applicants will be happy to pay considerably higher amounts than the $20 - $70 fees for a .com name in return for not needing to pay off cyber-hoarders and obtaining the name that they need.
(d) We hope to demonstrate that manual assessment procedures and screenings will considerably lessen the number of instances of cyber-hoarding or inappropriate use of existing trademarks.
(e) We believe that the proposed New TLD will demonstrate that creating restricted TLDs can reduce cyber-hoarding and domain name speculation.
(f) We hope to prove that restricted TLDs provide a useful function in the DNS.
The success of the introduction of the New TLD should be evaluated using the following criteria among others:
(a) Volume of Registrations. Are there at least 10,000 registrations in the first year of operations? Although 10,000 may not be a huge number when compared to “.com” registrations (most of which are purchased by cyber-hoarders) this level of registrations would show that the New TLD effectively met a minority need.
(b) Effectiveness and efficiency of Application procedure. Are Applications completed in a reasonable period of time (say within an average of less than two weeks after the receipt of documents) and with an acceptable level of errors and glitches?
(c) Reduction in cyber-squatting and trademark infringement as a result of screening procedures. Are a smaller proportion of name than in the .com world brought to arbitration proceedings?
(d) What is general consumer and business reaction to the New TLD (in the press, on news groups, etc)? Is it popular and seen as solving a problem of cyber-squatting and cyber-hoarding, or is it seen as an infringement of the rights of Internet users?
E31 Benefits For Long-Range Management of DNS
We believe that there are several benefits for the Internet and the DNS resulting from the New TLD.
The New TLD would effectively demonstrate whether there is room for and benefit from TLDs which involves manual screening procedures. It would also demonstrate in general whether there is benefit from a restricted commercial TLD. If this concept works, it would then seem logical to create other restricted commercial TLDs, e.g. .lawyer (where one has to have a law qualification to register), .doctor (where a medical qualification is required), .florist (where one has to have a flower shop), .restaurant and so on. We believe that the level of success of a restricted commercial TLD could in many ways help to steer the future course of the DNS.
E32 Benefits of Introduction Now
The New TLD will effectively eliminate much of the problem of cyber-hoarding. As “good” names will be readily available through the New TLD for genuine entrepreneurs, there will be much less reason to buy a name from a cyber-hoarder. This will therefore tend to considerably reduce the profits from cyber-hoarding and will have the effect of considerably reducing domain name hoarding throughout the DNS. This in itself is a major benefit, as cyber-hoarding is probably the biggest problem with the Internet facing the average Internet entrepreneur.
In addition, however, it is very difficult to assess the effectiveness or usefulness of other New TLDs while cyber-hoarding is still such a big problem. If new unrestricted TLDs are introduced, all of the “good” names will be bought up in a rush by cyber-hoarders, and it will therefore be difficult to asses the true potential value of the those TLDs. If, however, the New TLD proposed in this document is introduced first, this will mean that subsequent TLDs introduced far less effected by the problem of cyber-hoarding and it will therefore be far easier to asses the true benefit of those subsequent introductions.