ICANN's expansion of domain names suffixes: the benefits and disadvantages to businesses

ICANN is to allow limitless variations of domain suffixes, and, organisations can apply for gTLDs containing almost any word in any script or language". Are custom gTLDs set to dramatically change the internet landscape?

Since its creation in 1998, the Internet Corporation for Assigned Names and Numbers (ICANN) has gradually increased the number of domain suffixes, or "generic top-level domains" ("gTLDs"), to its current level of 22, including the common .com and .net. Despite this increase, and the 250+ country specific domains, the internet naming system remains heavily prescribed, writes Alex Hall, solicitor at Mundays LLP.

2012 will see dramatic change. On 20 June, ICANN elected to allow the creation of potentially limitless variations of domain suffixes. From January next year, businesses and organisations will be able to apply for gTLDs containing almost any word in any script or language, enabling the likes of ".google", ".tesco" or ".bank". Are custom gTLDs set to dramatically change the internet landscape?

The advantage to businesses in obtaining a custom gTLD will be to establish a unique internet presence. For businesses with a wide range of products, it will provide a straightforward method for organising their portfolio.

Custom gTLDs will also allow businesses and organisations to create more secure online environments. Consumers will be more readily able to determine that an e-mail or website is genuine, simply by checking the domain suffix. Custom gTLD owners will be responsible for administering their own domains, providing a further level of control.

Such benefits come at a cost. The application fee is US $185,000 (£112,000) and applicants must satisfy stringent technical tests to satisfy ICANN they have the expertise and hardware to run the domain. Ongoing upkeep costs will be significant.

Applicants must demonstrate a legitimate claim to the gTLD sought and only companies and corporations of "good standing" may apply. If the gTLD sought is trademarked, the applicant will need to demonstrate either ownership or a legitimate entitlement to use the trademark (for example, under licence). Individuals and sole traders are ineligible to apply.

Together, the prohibitive cost and stringent technical requirements ought to deter any would-be "cyber-squatters", although there is a risk that legitimate businesses might also be put off.

The first round of applications runs from January to April 2012 and requires applicants to complete a 300+ page form, so potential applicants should start planning now. The form includes detailed questions covering the claim to the gTLD sought, technical capabilities and financial due diligence.

ICANN estimates straightforward applications will take approximately 9 months to complete. However, applications will be subject to a publication stage, during which any formal objections (for example, based on possible infringement of the objector's intellectual property) will trigger a dispute resolution process. If the objector prevails, the application will not proceed further. If more than one organisation applies for the same gTLD (for example, ".law") this will also prolong the application process. ICANN estimates the most complex applications could take up to 20 months to complete.

ICANN comments that "diversity, choice and competition are essential to the continued success and reach of the global network". Whether ICANN's dramatic change to the previously restrictive approach to gTLDs will lead to the proliferation of custom domains remains to be seen. The cost and commitment required from business is significant. However, the benefits - in increased security and clear, unique branding possibilities - are substantial.

Disclaimer: Readers should not rely on this article as legal advice.

Alex Hall is a solicitor at Mundays LLP

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