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New TLD competition group throws in the towel

Kevin Murphy, September 29, 2010, 16:54:20 (UTC), Domain Registries

The ICANN working group tasked with deciding whether registrars should be allowed to apply for new top-level domains has failed to reach agreement after over six months of talks.

This means it will be down to the ICANN board of directors to decide, possibly at its next meeting, what the rules should be on vertical integration and cross ownership in new TLDs.

It’s been pretty clear from the Vertical Integration Working Group’s recent discussions that there would be no chance of the group reaching a consensus on the headline topics in the remaining time allotted to it.

Within the last two hours, the GNSO Council has been notified that the group has failed to reach consensus.

Should ICANN-accredited registrars be allowed to apply for new TLDs? Should registries be allow to sell direct to consumers? Should registrars be able to own stakes in registries? Vice versa? How much? Whither the .brand?

All these questions will now have to be resolved by the ICANN staff and board.

Currently, the Draft Applicant Guidebook limits registry/registrar cross-ownership to 2%, effectively barring existing registrars from applying to run new TLD registries.

While the VI working group has been working on the problem since February, positions quickly became entrenched based on the commercial interests of many participants. There has been no substantial progress towards compromise or consensus in months.

But the group did manage to reach rough agreement on a number of peripheral problems that will have a lesser economic impact on the incumbent registries and registrars.

For example, the board will likely be told that “single registrant, single user” TLDs, a variant of the .brand where the registry is the only registrant, should be looked into further.

On the core issue of cross ownership, three proposals are on the table.

One, the Free Trade Proposal, would eliminate such restrictions entirely. Two others, RACK+ and JN2+, would increase the limits to 15%.

The RACK+ proposal is the closest to the status quo in terms of barring vertical integration, while JN2+ contains explicit exceptions for .brand TLDs and smaller community registries.

Given the lack of consensus, it’s quite feasible that the ICANN board may decide to cherry pick from two or more proposals, or come up with something entirely novel. We’ll have to wait and see.

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