Empires of User Information and Top-Level Domains
By Fellows and Associates’ independent correspondent Samuel Ali.
On June 20 2011 ICANN, the Internet naming governing
body, confirmed its decision to create a New World, a virgin land freed of
obligations towards .com, .net, .co.uk and many other known tyrants. Companies
and institutions (not individuals) will be able to dress their top-level domain
endings (TLDs) almost as they wish, even to the extent of adopting
internationalised domain names – as long as they are within 63 characters. This
liberation, open for application for an $185,000 fee in January 2012 and
possible arrival in 2013, has evoked, inevitably, both excitement and
consternation.
Fear of the Unknown
Business uncertainty is creating anxiety – about how to
approach the ‘scramble’, what model to follow if they do go for it and whether
the whole thing will turn into a black hole into which money and consumers will
be lost in trying to keep up with the fakes and fads that will spring up.
Yet, this will not necessarily be a free-for-all, as a
skim of ICANN’s 300 page applicant guidebook quickly reveals. The age of
discovery that is being opened is less a gold-rush and more a tendering process
to contract out, as the guidebook states, a registry business that manages
top-level domains. Who the successful companies then permit to use their
extension and whether they sell to the small-fry and how they do so will be a
matter for them and their new fiefdom.
This creation of exclusive dominions is cause for concern
for brands. If they hesitate, they potentially let competitors carve up the
spoils. However, if they dive in, there is also the threat that they find
themselves stuck with a white elephant. Uncertainty remains as to how useful
generic TLDs will be to business. Canon and Hitachi have confirmed their
interest but Ikea, Morgan Stanley and Pepsi have, at this stage, suggested, no.
Whilst domain names continue to sell for astronomical sums (this year
gambling.com sold for $2.5 million), there is a sense that social networking
communication has evolved to reduce the importance of name, compared to image
and engagement – not to mention the opening of the supply floodgates that
generic TLDs seem to promise.
Aside from this commercial ‘opportunity cost anxiety’ is
the fear of brand molestation. A World Intellectual Property Organization
(WIPO) survey found that 41% of the .eu domains registered from 2005 were
defensive purchases to guard rather than to capitalise. This is cost that,
seemingly, will only multiply under the new generic TLD system, even though
ICANN’s application procedure has an anti-cybersquatting check.
An alternative to hoovering up TLDs at great expense is
to use ICANN’s objection procedures and dispute resolution system to defend
trademarks. This will also be costly and protracted but may stabilise once a
legal precedent is set.
Safety in Numbers
In the end, they who find the best model for combining
exploration, discovery, plantation and development in this New World will be
the major winners – and history tells us that this will often involve
cooperation to share risk. The gargantuan monolith of the British Empire sprung
from such a seed of cooperation. Rather than marching armies (though they would
come later) it was the relatively humble joint-stock company, the Virginia
London Company, supported by Royal patronage that founded Jamestown, the first
permanent British settlement in North America.
The London Company brought together the funds of English
speculators and the monarch, with the adventure and desperation of indentured
slaves, soldiers of fortune, explorers and religious outcasts. Together they
were able to raise the funds and the manpower to undergo such an expensive and
risk-laden endeavour as to migrate to another world.
Though the London Company’s Jamestown colony gave way to
disease, dissension, mutiny and conflict with the natives – and no profit, it
offers a crude but useful model of dealing with the commercial unknown. ICANN’s
application procedure, in fact, anticipates coordination in the form of
‘community applications’ for domains. Such applications on behalf of a
community receive some preferential evaluative treatment, including avoidance
of an auction with an equally valid individual applicant.
The obvious advantage of a ‘community application’ is
that an industry can share its cost of the application. Moreover, a community application,
say, .bank, made on behalf of its members, is to instantly create an exclusive
international domain through group adoption and guardianship. One can
understand why, then, Morgan Stanley might feel that they do not need their own
personalised TLD.
The Imperial Advance
For the strong and the bold – and the e-commerce world,
walking alone or in partnership might be preferred. History also tells us that
unilateral annexation can also reap rewards. For this reason, the new dawn on
the horizon of generic TLDs, promises to be another chapter in the rise of the
‘Empires of User Information.’
Search engines and much-searched social networking
companies like Google and Twitter will be able to behave a bit like the heads
of empire of yesteryear. They will have the vast resources to risk offering
‘patronage’ to speculative expeditions, as James I did in the 1600s to the
Virginia Company of London, in the hope that rewards might follow. They will
also go after their own terrain directly. Setting up registries to utilise and
peddle domains will be no trouble for such innovative and rich firms. And, as a
result of the New World of transaction, links and search, their ‘user tax’
revenues will soar.
More content and domain variation is going to mean that
the search and linkage is going to be more vital for the average Internet user
to cut through the thicket. Every search is a payment of information by the
searcher and the searched, for it is all stored and monetised by the site
through personalised advertising and trade. So, in this sense, Internet usage
is taxed in information and any expression of interest which connects two
entities, such as clicking links or conducting searches, is, in a sense,
double-taxed.
No empire can survive without an effective tax system –
as the British found out. Fortunately for the Empires of User Information, the
tax in information is barely noticed by the payer, so the promised land of
generic top-level domain names, so alluring for so many, the death knell for
some, the making of others, is likely to offer the richest pickings for the
monarchs of the web.
This article reflects the author’s opinions only and
should not be relied upon as advice. You can contact our news team via email at
[email protected].