Analysis: Proposed Changes to the Domain Name System

The IAHC has proposed a series of changes to the domain name system. Although the nature and extent of the changes have not yet been finalised, certain conclusions seem to have already been reached.

There is definitely a need to expand the number of top domains; that is, domains such as ".com", ".net" and ".org" At the moment, the proposition on the table suggests that at least seven new top domains would be created. IAHC is currently soliciting input as to what the new top domains will be. Although nothing has been decided, I would be very surprised if ".biz", ".web" and one of ".sex" or ".xxx" fail to make it into the winner's circle.

The IAHC suggests that this will ease the current shortage of domain names, as well as defusing tension over popular names. For instance, if abcd.com is taken, well there will always be abcd.web etc.

Analysis

A) Disputes
The expansion in the number of top domains will actually increase the number of domain disputes, rather than reduce it. For instance, companies such as McDonalds, who have had to fend off attempts to usurp what they see as their rightful domains [in this case, mcdonalds.com] will now have to contend with a slew of possible trademark violations. I wonder who will be the first to register mcdonalds.sex!

B) Congestion
An increase in the number of top domains will certainly help to ease congestion around the .com top domain. However the .com domain has acquired a certain degree of familiarity with the general public, and that should help to keep demand for .com domains high. It will no doubt continue to be the top domain of choice for discerning companies.

C) Confusion
If you own the site abcd.com, and you are a prominent computer manufacturer, you will not want too many people coming to look for Abcd Fruit Preservers at your web site. Equally, if you are Abcd Fruit Preservers, you will want potential customers to hurry to abcd.web and not get lost at abcd.com, which happens to belong to Abcd computers.

D) Tie a Knot in that Handkerchief
Another side effect of the top domain expansion is that it will be harder to remember a site address off the top of one's head. Anyone with even brief experience on the web will have noticed that about 99% of all .com web addresses follow the pattern http://www.ADDRESS.com which means that all that needs to be memorised is the ADDRESS part of the address. With the new naming scheme, it will no longer be possible to rely on the address ending in .com, and few people will relish having to test each of the www.ADDRESS.<TOP DOMAIN> combinations in order to find a site.

E) Value
An increase in the number of top domains will have two seemingly contradictory effects on domain name value. At the "lower" end of the market, domain names that have been created using ever more tortuous naming schemes and "catchy" word plays will plummet in value. After all, who would want videos4U2rent.com when they could have videos.web?

On the other hand, because of the aura of credibility surrounding .com domain names, the more valuable names will probably continue to increase in value. Remember also that at present Netscape browsers automatically go to a .com site simply by entering the domain name part of an http address. For example, to get to http://www.igoldrush.com using Netscape, you can simply type "igoldrush" in the location bar. And with over three quarters of the browser market, that represents a huge potential audience for simple, catchy domain names such as video.com.

Finally, there will be a few windfall profits to be made by snapping up the juiciest combinations formed using the new top domains. fairer.sex and oral.sex, design.web and spider.web, the.biz and other names should go very quickly, if they have not already been pre-reserved via one of the plethora of alternative registrars that have sprung up to form a secondary market in opposition to InterNIC's monopoly of the .com domain.

F) Winners...
Companies that stand to win from an expansion in the top domain scheme include those that have a legitimate right to a name that has already gone to a different entity. For instance, if Abcd Computers has snapped up the .com domain name, Abcd Fruit Preservers is currently out in the cold. There are no trademark issues to get in the way here, simply the first come, first served principle. Now both companies can happily have a presence online. However, see the "Confusion" heading above for the downside of this issue.

Other companies that stand to win include the companies that will be assigned the task of doling out the new top domains, domain registration companies, and domain brokers. Individuals and companies that astutely snap up the choicest of the new domain names will also do very well out of the changes. Vanity mail services will also do well, as long as their burden of current names does not weigh them down too much. They will be able to snap up hundreds of nice, simple names that will have broad appeal.

G) ... and Losers
The biggest winner will become the biggest loser. InterNIC will lose its monopoly, and will also lose a lot of the revenue that the .com registrations had been producing. Customers who have signed up for 2 years' and paid their $100 may be less inclined to renew if they can shop around for a better domain name.

Other losers include speculators who bought hundreds of .com domains of dubious value, just because everyone else was doing it. As I explained earlier, despite what certain domain brokers say, the value of non-premium .com domain names WILL fall.

It is not clear which of the alternative domain name registrars will be winners, and which will be losers. Although there have been some indications that IAHC will not take any notice of current "pirate" alternative top domain name registration schemes, in practice I believe it would find it very difficult to ignore schemes that are already in place. AlterNIC's administration of the .biz alternative top domain is just one such scheme. However, since there are far more alternative registrars than the 7 new top domains will support, there is bound to be a bloodbath in some corners of the industry as companies get left out in the cold.

Finally, companies that want to maintain their monopoly on a given name will now have to try that little bit harder, in terms of both time and money. Whereas Abcd Corp. only had to get hold of abcd.com, abcd.net and abcd.org to have a monopoly on a given name, they will now have to beat the crowds to each of seven new abcd.<new top domain name> names.

Three Proposals to Ease the Transition to the New System
I will stick my neck out at this point, and make three proposals that I think would help ease the transition to the new system. It seems clear that change is now inevitable, whether it comes sooner or later, and a smooth and successful transition would pave the way for future changes, should they become necessary.

• A freeze on ALL domain name registrations for a week on either side of the opening of the new domain naming system. This would allow time for the new top domains to be assessed, and for companies to decide which top domain best suits the nature of their business. If the floodgates are opened at a stroke by a press release, there will be incredible confusion as thousands of companies and individuals jostle for possession of the new names.

• Coordination of efforts between InterNIC and the new domain name registration authorities, combined with a cooling off period for new names. Despite the IAHC's intentions to level the name playing field, companies that have invested a lot of time and capital promoting a given name should be allowed first pick of the new top domains. For instance, if abcd.com belongs to a successful Web company that has spent 3 years building up name recognition, it seems unjust that anybody can swoop in and acquire abcd.web in a matter of minutes. 30 days should be long enough for interested parties to get sorted out and reserve their names.
  
  Implementation: during the first 30 days, the new registration authorities would only accept registrations from individuals and companies that already own the corresponding .com, .net or .org name.

• A simple cross-linkage system in a standard, unobtrusive format. To avoid potential confusion between abcd.com, abcd.web and abcd.biz, each of which belongs to a different organisation, I propose the adoption of a standard link system. Links would be added to a site in a standard format that would preclude accusations of one company giving less prominence to another. The format would specify the placement, wording and size of the links. Although this would be a purely voluntary scheme, it would help all the companies involved as it would help keep their potential customers happy.
  
  Example: [Format: font size 0, last line of site]
  
  If you are looking for ABCD Fruit Preservers, you should go to abcd.web.
  If you are looking for ABCD Alphabet Soup, you should go to abcd.biz.