Although still in draft format and subject to change, keep these gotchas in mind as you think through your strategy. 

A 70% Refund Sounds Great – If you decide not to move forward with your new gTLD application after its initial posting, you are eligible to receive a 70% refund. But because the application fee is $185,000, pulling an application from the process will still result in a cost of $50,000. 

You’ll Need to Move Quickly to Object to Applications that Pass the Initial Evaluation - Objections to new gTLD applications can be made as soon as they are posted to the ICANN site for a period of approximately five months. However, you will only have two weeks to file objections once the Initial Evaluation results are made available. 

Obtaining a New gTLD Could Take 19 Months – If you fail the Initial Evaluation, if your application is disputed, and if there is string contention, even the Guidebook says it could take up to 19 months before your new gTLD is delegated. 

Trademark Clearinghouse Only Simplifies Trademark Sunrises – In the past, Registries have relied upon Trademark Sunrises to help recoup their internal start-up costs. With the Trademark Clearinghouse, Registries will no longer be able to charge exorbitant Trademark validation fees. This does not mean, however. that other Sunrise periods won’t also be instated. Be prepared for the submission of business registration requirements, local presence requirements, and proof of industry trade association membership, along with additional fees for validation. 

The Uniform Rapid Suspension (URS) May Be More Work than It’s Worth – When the Implementation Recommendation Team originally devised the URS, it was supposed to be a quick, easy and inexpensive method for dealing with clearly infringing domains. As it stands now though, it isn’t any of those things. Domains that are successfully suspended as a result of the URS procedure are only suspended for the remainder of their registration term, or for an additional year at current market registration rates. After suspension ends, domains become available for registration and are likely to be registered again resulting in a never-ending cycle of watching and suspending. 

Registry Services Should Not Be Taken Lightly – Registries are responsible for running their TLDs in a stable and secure manner, complying with ICANN’s consensus and temporary policies, implementing start-up and post-launch rights protection mechanisms, providing protection for country and territory names, depositing data into escrow, delivering monthly reports to ICANN, hosting a Whois services, maintaining relationships with ICANN-accredited Registrars, maintaining an abuse point of contact, cooperating with contractual compliance audits, making TLD zone files available, and enabling DNSSEC. 

Your Relationship with ICANN Could Be More Solid Than Many Marriages – That’s right – when you apply for a new gTLD, be prepared for a 10-year commitment. 

You’ll Need to Prepare for the Worst – To obtain a new gTLD, not only will you need to define its mission and purpose, develop financial plans, and describe technical and operational capabilities, but you will also be required to maintain a continued operations instrument sufficient to fund basic operations for a period of three years which would continue in place for five years after the delegation of the registry AND you must also have a continuity plan in place which includes the designation of a transition provider. 

New Registrations Won’t Likely Be Available Until Late 2011 / Early 2012 – Even if applications are accepted early next year, even in the best case scenario, it will still be some time before we actually see new gTLDs in the root. 

The ICANN Board Still Needs to Approve All Applications – Even after the numerous reviews by the String Similarity Panel, the DNS Stability Panel, the Geographical Names Panel, the Technical Evaluation Panel, the Financial Evaluation Panel and the Registry Service Technical Evaluation Panel, at the end of the day – entry into any Registry agreement by ICANN must first be approved by the ICANN Board of Directors.

In addition to the Applicant Guidebook, ICANN has also published summaries and analysis of the public comment period.

The latest version includes:

• Incorporation of trademark protections, including improvements to the Uniform Rapid Suspension (URS), the Trademark Clearinghouse (TM Clearinghouse), and the Post-Delegation Dispute Resolution Proposal (PDDRP);
• Changes to rules for geographic TLDs, including a prohibition on country names as gTLDs;
• A new gTLD Registry transition process model, including provisions for emergency transition in the case of prolonged Registry technical outages;
• A model for providing centralized zone file access (ZFA) to aid in combating malicious conduct;
• A revised base Registry agreement including proposed Registry-Registrar cross-ownership language.  

The Public Comment Period for the fourth version of the New gTLD Draft Applicant Guidebook is now open and will run through July 21, 2010.

MarkMonitor will monitor these developments closely and will follow-up with more detailed analysis and recommendations.

Twenty-three percent stated that their companies did not intend to apply for a new gTLD, while more than 55% still did not know which route they would eventually take.

According to the survey results, of those planning to acquire a new gTLD, 69% said that they would be doing it for “defensive purposes only, to keep others from applying and with no immediate plans to use the new gTLD.”

When asked whether the introduction of new gTLDs would require increased efforts around the policing of brands on the Internet, a whopping 76% of respondents believed that it would.

These numbers can give some insight into how corporations are approaching new gTLDs, and clearly many have begun the process of working with the various stakeholder groups within their respective companies to identify whether or not a new gTLD makes sense.

However, a majority of the companies still have not yet decided what to do, which is worrisome, as the fourth draft guidebook is expected to be released in June of this year with a final version potentially released late this year or early next.

Given this relatively short timeline, companies should begin strategy development immediately. Every corporation will need to carefully assess the impacts, choose an offensive, defensive or combined strategy, and begin developing processes to execute that strategy.

For more information on new gTLDs, visit MarkMonitor’s dotBrand Resource Center.

* A total of 95 respondents participated in the survey

As proposed by ICANN staff, the EOI model would have required that all entities wishing to apply for a new gTLD during the first round to submit basic information including the requested string and a fee of $55,000.

However, much to the collective surprise of the ICANN community, the ICANN Board voted against the proposal, citing many of the reasons noted in the comments submitted by MarkMonitor. 

Members of the ICANN Board stated that confusion regarding the purpose of the model existed, and that moving forward with such a model would have added another two to three months to the process. Furthermore, that resources were being taken away from solving the “underlying problems” was also cited as a reason to vote against the model.

While the EOI was expected to provide exact information about the number of applicants expected in the first round, one of the Board Members stated that having this “extraordinary precision” was not necessary due to the fact that the “Internet is a — as a system, exhibits enormous dynamic ranges in load in every aspect.”

Interestingly enough, another Board Members stated that at the beginning of the week that he had planned to vote in favor of the EOI, but by the end of the week it had become apparent that a mandatory EOI did not have the consensus of the community.

With this result, brand rights owners and others will be able to keep their plans confidential until they are ready to apply and prepare for the application or objection process, without additional worries or early investment in the gTLD process.

So, it is without any sorrow or regret, I say RIP EOI.  

 The model is a direct result of community recommendations and is available for public comments until January 27^th, 2010. Public comments can be submitted at http://www.icann.org/en/public-comment/public-comment-201001.htm#draft-eoi.

Based on public comments, the ICANN Board will convene to review feedback and determine possible next steps in the first quarter of 2010.

Highlights of the proposed plan include:

• Participation in the EOI is mandatory for eligibility to submit a gTLD application in the first round. Subsequent application rounds will be open to any eligible applicants.
• A deposit of US$55,000 is required for the EOI, and will be used as a credit against the US$185,000 evaluation fee.
• The deposit is refundable if the New gTLD Program does not launch within a specific time period. Details will be outlined in the final EOI model.
• Participants are notified that there may be subsequent amendments to the Draft Applicant Guidebook. It is the intention to conclude many current open issues prior to initiation of the EOI process.
• A fully executed communications campaign, intended to ensure global awareness about the EOI, will precede the opening of the process.
• Participants will be required to provide specific information concerning the participating entity and the requested string.
• The participant and string information will be made public.
• The EOI launch is conditional on the conclusion of many of the outstanding issues, for example, issues concerning vertical separation and the IDN three-character string requirements. Solutions for these and other issues are expected to be included in the Draft Applicant Guidebook, version 4.

The plan as outlined by ICANN raises a number of concerns. MarkMonitor intends to submit its own comments and encourages its clients to do the same.

• 10 – Toys.com is sold for a staggering $5.1 million dollars.  read more 
• 9 – With 115 million current gTLDs, registration growth slows from 11% in 2008 down to 6%   in 2009.
• 8 – Oversee.net and SnapNames.com admit that a company executive acted as a shill bidder in the auctions of thousands of domains over a four-year period.
• 7 – UDRP marks its 10-year anniversary with more than 16,000 disputes and more than 10,000 domain name transfers.  read more
• 6 - Germany (.DE) and .BIZ announce the release of one- and two-character domain name registrations.
• 5 – Mexico (.MX), Tunisia (.TN) and Cameroon (.CM) announce the release of second-level domain registrations and the European Union (.EU), Bulgaria (.BG) Singapore (.SG) and .NAME announce the release of Internationalized Domain Names (IDNs).
• 4 – Corporate registration trends move away from the practice of registering large numbers of defensive domains as more companies adopt aggressive monitoring and policing policies.  read more
• 3 – Both registries and registrars are exploited by hackers as SQL vulnerabilities are uncovered.  read more 
• 2 – ICANN’s IDN Fast Track process is approved and applications for Top-Level Internationalized Country Codes are accepted.  read more 
• 1 – The launch of ICANN’s new gTLD program is delayed as commitments to addressing and resolving overarching issues related to trademark protection, stability and security, malicious conduct and economic demand are made.  read more 

So what can we expect in 2010?
 
While I don’t have a crystal ball, I expect to see the launch of a number of the Top-Level Internationalized Country Code extensions in the first half of next year. Corporations should begin planning now by identifying non-Latin trademark portfolios so that they are prepared as Sunrise periods begin.
 
I also anticipate that we will see a final version of the new gTLD Guidebook by the end of next year. I would encourage companies to actively participate with ICANN in relation to the new gTLD process and in particular with the development of rights protection mechanisms. Again, although there is a delay in the process, companies should continue to move down a path of due diligence to determine the right approach – whether it’s to focus solely on defensive measures or to apply for a custom TLD.

We’ll continue to see liberalizations of ccTLDs. However, we may also start seeing the introduction of new, more stringent requirements on ccTLDs which were once unrestricted or minimally restricted in an effort to reduce criminal activity.
 
Although I am hopeful that we’ve seen the last of these registry and registrar security breaches, I am sure that we’ll continue to see the efforts of hackers rearing their ugly heads.
 
While 2009 was certainly a year to remember, I think that 2010 will bring even bigger changes and bigger challenges.

Brent stated that Internet users have long called for the expansion of new gTLDs and that winners of new gTLDs would have to abide by a lengthy set of rules.

Brent went on to say that “ICANN did not casually think this plan up.”

Although an official launch date for the program was not provided, Brent said that he expected a slip in the schedule as ICANN works to resolve issues.

The launch had been expected to begin in the first quarter of 2010.

While I have never encouraged the practice of registering every variation in every geography, as this becomes prohibitively expensive over time – most corporate portfolios have grown to the point where 90+ percent consist of defensive domain name registrations. 

With what seems to be the imminent launch of hundreds of new TLDs as a result of ICANN’s new initiative, companies appear to be saying enough is enough, and meaning it. 

We’ve already seen significantly less uptake with each new round of TLDs and the numbers speak for themselves: 

• .INFO (introduced in 2001)          5,100,000 registrations
• .BIZ (introduced in 2001)             2,000,000 registrations
• .MOBI (introduced in 2005)            840,000 registrations
• .ASIA (introduced in 2006)             210,000 registrations
• .TEL (introduced in 2009)               200,000 registrations  

What can we expect with the launch of hundreds of new TLDs? 

While I can only speculate about the consumer market and their adoption of these new registries, there has been a growing trend among corporate domain name managers to only register exact matches in countries where business is conducted. Obviously this approach can leave corporations wide-open to squatters and speculators which is why so many companies are starting to ask themselves how they will manage the influx of anticipated abuse.  

ICANN’s Implementation Recommendation Team (IRT) has outlined a number of mechanisms to protect rights holders, and I am hopeful that they will be adopted. 

But even with the protections provided by the IRT and the automated solutions that exist for identifying domain name abuse, with the launch of new gTLDs, domain name administrators will certainly be asked to do more with less.  

More registrations, more management, more detection and more remediation of abuse will mean more work and greater expenses for corporations. 

So how can this burden be alleviated?  

The first step is to review existing registration policies and procedures in advance of the launch of new gTLDs, so that approaches for domain name registration and brand protection are agreed upon and understood by all stakeholders.  

The second step is to actually implement any revisions to these policies and procedures in light of the new gTLDs, and to develop feedback mechanisms to evaluate whether the approach is meeting the corporation’s online objectives. Companies should be willing to readjust their approaches as needed. 

While this all sounds straightforward and simple, actually taking on this type of project can be an ordeal – as there are often many competing interests, budget constraints and differing opinions. However, if companies can begin thinking about and addressing domain polices, procedures and protection now, the anticipated launch of new TLDs should be less complicated.

In a recent Washington Post article, Rod Beckstrom, former Director of the National Cyber Security Center and ICANN’s newly appointed CEO, provided his initial views on ICANN, and its plans for the launch of new gTLDs.

According to the article, Mr. Beckstrom said that he was “a bit overwhelmed by the tremendous complexity of issues on the table.” He added, “(ICANN) is perhaps the most complex, multi-stakeholder environment (he has) ever seen.”

In terms of the new gTLDs, Mr. Beckstrom stated that “ICANN is receiving a lot of pressure from many companies around the world who want new gTLDs…who want them opened up and available.”  

He continued “the solution is not avoiding the gTLDs, because there’s tremendous demand from all over the world to have those, and the number of companies who are opposing them appear to be a minority compared to those who think they should be out there and present.”

Mr. Beckstrom is likely hearing the cacophony of voices from ICANN’s ‘contracted’ parties, registries and registrars, as well as newly announced registries that intend to make the most of the new namespace.  Several new registries announced their intent to apply for a new gTLD with splashy events and celebrity guests at the meeting held last week in Sydney.  Many of these new proposed registries have large amounts of capital invested and are eager to put their money to work.

While the companies that enable and support new gTLDs are certainly among those clamoring for their launch, MarkMonitor has yet to hear many large corporations expressing a similar desire. In fact, of the many conversations I’ve had with rights owners, there are precious few brand owners who have expressed their desire for the launch of new gTLDs. However, many corporations will be forced to participate in some way to protect their rights or for competitive reasons.

We are sure that Mr. Beckstrom will have a chance to hear more of the voices that represent other ICANN stakeholders, including Internet users and rights owners who are endangered by domain name system abuse, before he must make decisions about the new gTLDs.  His writings in his book “The Starfish and the Spider” indicate that he has an appreciation for smart organizations and the importance of reputation and respects the wisdom of crowds.