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Should the management of new gTLDs be allocated on a first come, first served basis?

18/11/2016

The idea of switching the allocation of new gTLDs from the current “round” system to a first come, first served basis (FCFS) was discussed at the ICANN 57 Meeting which took place in Hyderabad from 3 to 9 November last.

Since 2000, new gTLDs extensions have been allocated in rounds commencing with limited application periods, i.e. Sunrise (in which gTLDs are allocated exclusively to owners of identical trademarks) followed by Landrush (gTLDs are not reserved to trademark owners but may still be limited to specific individuals or groups and/or at a higher cost) after which they become generally available.

One of the main disadvantages of the current “round” system is that it is unpredictable. Potential applicants are often not certain as to when a Sunrise will open and close. Trademark owners can either miss the Sunrise period and then discover that third parties had registered a domain name at the start of the general availability period and then tried to sell it to the owner of the corresponding trademark often at a huge cost. Another disadvantage is that at the start of a Sunrise period, several trademark owners could find themselves competing for the same domain name.

The advantages of a FCFS model where anybody could apply for any domain name at any time is that it would eliminate the need for auctions by registrars as multiple applicants would be less likely to be competing for a domain name at any given time. It would also allow businesses to apply for domain names during times that suited their business objectives instead of applying for domain names they did not necessarily need at a given moment just because a Sunrise had opened. The disadvantages of an FCFS model is that trademark owners could see corresponding domain names registered by third parties at any moment. It would also pave the way even further for opportunists to snap up domain names with the purpose of selling them on to trademark owners often for exorbitant amounts of money.

Also discussed at the ICANN meeting was the possibility of retaining the “round” system on a predictable schedule, i.e. on an annual basis. This would not eliminate the possibility of multiple applicants competing for the same domain name but would enable business owners to plan ahead as they would know ahead of time when the sunrise would open.

The current talks are still in the early stages and we will need to wait and see whether or not the FCFS idea gains ground or falls by the wayside.

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