2014-10-02

Why ICANN's New gTLD Domains Are A #FAIL, Reason #1

There are 2 main reasons why most of ICANN's new gTLDs (generic top-level domains) are a #FAIL and the first reason goes to the core threshold question that ICANN, its Board of Directors, and all stakeholder groups, should always ask, but particularly whenever proposing, considering or implementing a change, or an expanded or new program:

THE QUESTION: Does this increase or decrease costs for domain name registrants?

The answer will invariably always guide one to the right decision. If the answer is that the proposal increases costs, then that should usually end the discussion and any further consideration. Unfortunately, ICANN (and I use the term "ICANN" here in the collective sense of its Board of Directors, Officers, staff, and stakeholders) either failed to ask THE QUESTION or failed to give proper weight to the answer. There is no question that the new gTLDs increase costs for domain name registrants--the registration and renewal fees for new gTLD domain names are higher* on average (sometimes much higher), businesses and trademark holders are bearing increased costs in defensive registrations, trademark enforcement, and related costs, and none of these increased costs are outweighed by any benefits that new gTLDs bring to the marketplace. That is why University of Pennsylvania Wharton School marketing professor Peter Fader, co-director of the Wharton Customer Analytics Initiative, said:
"I really can’t see a legitimate upside where new benefits [of the new gTLDS] outweigh costs, and everyone I mention this to feels the same way. People just shake their heads. It’s all about the money. They [ICANN] are creating these extensions because they can." (source: Knowledge@Wharton).
It is also the reason that the former Chairman of the U.S. Federal Trade Commission said: "The public at large, consumers and businesses, would be better served by no expansion or less expansion [of new gTLD domains]."

If one looks behind the veil at ICANN, it is easy to understand why ICANN failed to either ask the threshold question, or heed its answer: greed and conflicts of interest at the highest levels of ICANN (Board of Directors, Officers, staff, "high stakes" stakeholders with vested interests)--see this and this and this and this and this. And of course, let's not forget that no one within ICANN, particularly within the Board of Directors or influential key stakeholder groups, represents the interests of domain name registrants--there is no "domain name registrants' interest group" within ICANN--for a very good reason: ICANN has been "largely captured by the domain name industry" (registry operators and registrars and their service providers), and they view domain name registrants as captive consumers to be exploited for financial gain. To grant domain name registrants equal power to the domain name industry, or "oversight authority" to governments (which traditionally guard the "public interest" and prevent exploitation of consumers), would be a threat to the domain name industry's power within ICANN. Remember it was the U.S. Department of Commerce, not ICANN, that insisted on limiting what Verisign could charge for .COM registration and renewal fees through November, 2018, in the last contract (2012). And that is why ICANN today is adamant that neither governments nor domain name registrants have equal footing nor oversight of ICANN's operations which could threaten the power of their favored stakeholders--registries and registrars and their service providers. After all, it's the high-stakes vested interest stakeholders--the registries and registrars--which ICANN officers refer to as their "customers."

*Note: No one at ICANN ever polled the global internet community or domain name registrants, at the time new gTLDs were under consideration, with the question: "Do you want the costs of domain name registration and renewal fees to double, triple, or even be unlimited/unregulated, and other costs to increase dramatically, in return for increasing the number of gTLDs from 22 to more than 1300?"

Tomorrow: Reason #2 new gTLD domains are a #FAIL--the market can be cruel, sometimes very cruel--some high-stakes players are about to find out just how cruel the market can really be.

See also: ICANN, New gTLD Domain Names, Universal Acceptance Another #FAIL





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