The application period for the much discussed new gTLD system will open for a three month window from 12 January 2012. There is no certainty when a second application period window will be opened by ICANN although some informed pundits suggest within three to five years. Applications will be considered for all forms of ". (root name)" domain names, with a brand name for generic words and in all languages and internationalised scripts. The application process is comprehensive and arduous, requiring applicants to demonstrate the technical, management, marketing and financial wherewithal to effectively operate a domain name registry operation. While the base application fee of USD$185,000 per domain application is high and only refundable in part in limited circumstances, it pales into insignificance by comparison with current estimates of between USD$500,000-$2,000,000 as the overall costs and financial backing required to support an application.
Applications will be processed in "batches" and not on a "first in, first served" basis and a list will be published immediately after the application period closes on 26 April 2012. Where there is more than one applicant for a domain name, in most cases it will be up to the parties to negotiate an outcome unless, of course, one of the applicants is more favorably viewed by ICANN. As a last resort, competing applicants will be forced into an auction process in which a bidding war could result in costs going sky high. No one knows how many applications may be made, but expectations have grown and estimates range anywhere from 500 to between 1,000 and 2,000 applications.
The application processing time is lengthy and may become very much more protracted if many more applications are received than have been planned for by ICANN. At a minimum, it is likely to be January 2014 before the first new gTLD becomes operational and where problems are encountered, delays to launch could be very much longer than that.
Major brand owners will most probably be well along the line by now in considering whether to make an application and if not, then in thinking about their defensive strategy. The opening up of the domain name system will create numerous opportunities for cyber squatters and apart from the various protection mechanisms such as the trade mark claims and sunrise process and the various dispute resolution mechanisms, it will be necessary to consider a registration strategy in most of the new domain name spaces.
Happily for corporates and SME's who have not yet considered this strategy, there is a 12 month window before the first new gTLD will go live, so a reasonable period in which to work out a defensive campaign. It will be very interesting to see the application list when it is published after 26 April 2012, and this will be the starting point for many organisations in considering their defensive strategy. The key will be to establish a comprehensive programme at this stage and not to leave it until the last moment. Those who miss the boat and do not plan for the release of new gTLDs will inevitably suffer the consequences – the cyber squatting problem in this new space is likely to be many times more acute than that experienced to date. The only saving grace is that because of the vagaries of the application process, new gTLDs will be released on a staggered basis and therefore brand owners who are late to consider the issue will have some breathing space to prepare before subsequent domain name launches.
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