Familiar website domains like dot-com, dot-org and dot-edu may soon find competition. With $185,000 and a 349-page application guidebook, companies, organizations and, potentially, individuals can apply for new generic top-level domains (gTLDs) based on any English words, or those in several other languages. Some perceive opportunity in this, but many others see only high costs and potential threats to established business brands.

Beginning this month and running through April, the Internet Corporation for Assigned Names and Numbers (ICANN) – which oversees the Internet – will accept applications for new gTLDs. Opening the domain canon will dramatically expand the number of top-level domains online.

Numerous large and small companies have voiced their concern that new gTLDs will force businesses to defensively buy brand domains. Companies are faced with a hard choice of either investing hundreds of thousands of dollars to acquire a gTLD or risk leaving their brand up for grabs during ICANN’s application period.

“The fundamental question that should have been asked throughout the entire timeframe [developing the new gTLD plan] is, where is the benefit,” says Bob Liodice, President and CEO of the Association of National Advertisers (ANA), a major opponent of new gTLDs. “Why is ICANN doing this and for what purpose that could be of benefit to all the brands out there? This is a tax upon brands that is unnecessary because there are no winners other than domain name sellers.”

In November, under the banner of the Coalition for Responsible Internet Domain Oversight, the U.S. Chamber of Commerce, along with 102 other associations and 59 major international companies, sent a letter to U.S. Department of Commerce raising concerns about the gTLD application window. The letter noted that new gTLDs “unduly burden a diverse range of public and private brand holders, as they would be forced to spend ever-greater amounts of time and resources simply to protect their brands.”

There is evidence to support this claim. The recently approved gTLD .xxx is forcing legitimate businesses and organizations to buy website names that include their brand but end in .xxx – this to prevent the company brand from being linked with pornography. Texas A&M University, for example, bought more than a dozen names ending in .xxx to prevent their trademarks from being linked to the porn industry. Similar, wider-reaching issues will result from ICANN’s latest gTLD expansion.

“Throughout the development of this plan, businesses and organizations have raised widespread objections,” says Jason Goldman, U.S. Chamber Telecommunications & E-Commerce counsel. “Beyond the costs associated with defensive registrations, many Chamber members have strong concerns that these new domain names will lead to brand confusion and dilution as well as fraud, identity theft, data breaches, and other cyber crimes.”

To address these concerns, ANA asked ICANN to establish a temporary "Do Not Sell" list. This would give non-governmental organizations, international governmental organizations and commercial stakeholders the opportunity to have their brand names added free of charge to a temporary "Do Not Sell" list during the first application round. ANA sent this idea to ICANN but has not found much response.

“It is unlikely this chorus of opposition [from the private sector] to the new domains would develop unless there was a fundamental belief that something was not right,” says Liodice. “An objective organization would look at the totality of this and compare the risk against the nebulous benefits of spurring innovation. Brand owners are going into an environment with shaky confidence that the new domains won’t end up disrupting their brand equity.”

The Commerce Department – which oversees ICANN – also sent a letter to ICANN, urging it to “minimize the perceived need for defensive registrations” and other suggestions. It stopped short, however, of setting deadlines or demanding specific action. Commerce has not made moves to interfere with ICANN’s expansion, though with the corporation’s contract expiring in March, Commerce has requested bids for a new contract.

In an interview with FreeEnteprise.com last month, Commerce Secretary John Bryson said, “We’re going to closely monitor the execution of this program… We have to see to it that [ICANN] does it well. The Commerce Department has the lead position with respect to that.”

In addition to brand threats, the new gTLDs could also threaten consumers and Internet users. Federal Trade Commission Chairman Jon Leibowitz tells Congress the new gTLDs are a “potential disaster,” warning that ICANN’s plan will contribute to the growth of online scams. 

“Fraudsters will be able to register misspellings of businesses,” he says, “including financial institutions, in each of the new gTLDs, create copycat websites, and obtain sensitive consumer data with relative ease before shutting down the site and launching a new one.”

To prevent these abuses, groups like the Coalition Against Domain Name Abuse will push for ICANN restructuring, such that its internal governance and policy development process leads to decisions better aligned with Internet community’s interests.

With so many objections to ICANN’s plan, many stakeholders are asking, what’s the hurry? Lawmakers in Washington are urging ICANN to slow it down. Sen. Kelly Ayotte (R-NH) recently noted at a Senate Commerce Committee hearing: “It seems to me that caution should be used to make sure you [ICANN] don’t rush into this.”

Members of the House Energy and Commerce subpanel on Communications and Technology also suggest ICANN’s plan may not be ready for “prime time” and that the organization should hold on handing out new gTLDs until it has a firmer grasp of the precise ramifications from their plan.

Even the first chairwoman of ICANN, Esther Dyson, told the Senate that though she supported the gTLD expansion in 2000, the latest proposal plan is a mistake offering no benefit to consumers or businesses, calling the whole idea “fundamentally misguided.”

Yet, the current application period is not a pilot program. Despite objections and concerns, ICANN has moved ahead with the new gTLDs. Whether these will offer any real benefit to companies and consumers remains to be seen, but businesses want more assurance than ICANN’s word that the plan will not end up doing more harm than good. Says Liodice:

“When the world community has expressed its displeasure in such a singular chorus of voices and said we are definitely worried about this plan, please make us feel better, ICANN must do more than simply say ‘trust us.’ That doesn’t cut the mustard.”