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Competition, Consumer Trust and Consumer Choice Review

Under the Affirmation of Commitments (AoC), ICANN will be launching a process to review the extent to which the introduction of gTLDs has promoted Competition, Consumer Trust and Consumer Choice. This AoC mandated review also will assess the effectiveness of the application and evaluation process, as well as the safeguards put in place by ICANN to mitigate issues involved in the introduction or expansion of New gTLDs.

To conduct this review, a Competition, Consumer Trust, and Consumer Choice Review Team (CCT) will be formed. The Review Team will be constituted, as provided for in the AoC, with volunteer community members, and will include the following (or their designated nominees): the GAC Chair, the ICANN CEO, representatives of the relevant Advisory Committees and Supporting Organizations, and independent experts. The composition of the Review Team is to be agreed jointly by the GAC Chair (in consultation with GAC members) and the ICANN CEO. Once formed, the Review Team will independently plan its work and schedule.

The resulting recommendations from the Review Team will be provided to the Board and posted for public comment. The Board will take action within six months of receipt of the recommendations. Note that the recommendations, if accepted, may take different paths (e.g., some could relate to policy issues and could be recommended for going through the policy development process in the GNSO).

Preparations to inform the Review Team's work areas are described below.

Review Team: Promotion of Competition, Consumer Trust, and Consumer Choice

Consideration of ways to assess the impact of the new gTLDs in the areas of competition, consumer trust, and consumer choice has been underway in the community for some time. The Board of Directors passed a resolution in 2010 requesting advice from the ALAC, GAC, GNSO and ccNSO on establishing the definition, measures, and three-year targets for those measures, for competition, consumer trust and consumer choice in the context of the domain name system.  In response, the Generic Names Supporting Organization (GNSO) and the At-Large Advisory Committee (ALAC) recommended a set of possible metrics to contribute to this review. 

The 70 metrics the GNSO and ALAC recommended were forwarded to an Implementation Advisory Group (the IAG-CCT), which evaluated each of those metrics on its feasibility, utility and cost-effectiveness before making a final recommendation to the Board. On 4 March 2014, the IAG-CCT proposed interim Recommendations [PDF, 202 KB] were adopted by the Board, specifically for a Consumer survey and an Economic survey to be conducted immediately. These surveys established a benchmark of the New gTLD marketplace; follow up surveys are to take place one year later. 

The Board approved the final recommendations of metrics in February 2015.  These recommendations provide the Review Team with several inputs to explore the impact of the New gTLD Program. The data from the metrics, as well as anecdotal and other reports on experiences with the New gTLD Program help provide information on the results of this round of New gTLD delegations. It is anticipated that the data will inform the deliberations of the Review Team; however, whether and to what degree it relies on this data will be entirely within the discretion of the Review Team.

Review Team: Effectiveness of the application and evaluation process

The Review Team is also charged with assessing the effectiveness of the application and evaluation process. This may be informed in part by a set of program implementation reviews. The work described in section 2 above will provide an input to the Review Team in this area.

Review Team: Effectiveness of safeguards put in place to mitigate issues involved in the introduction or expansion

The Review Team is charged with assessing the effectiveness of safeguards put in place to mitigate issues in the New gTLD Program.

A set of new protections were required of all new gTLD registry operators. The previous analysis on rights protections described in Section 4, as well as additional quantitative and qualitative data to be gathered in relation to abuse prevention mechanisms in the Program, are planned to be available to help inform this element of the Review Team's considerations

Review Timeline

The current, estimated timeline and major milestones are:

Estimated Timeline

Preparations for CCT Review

Consumer Survey

Study completed in Q2-2015, with follow-on study 1 year later. Outcomes targeted by Q2-2016.

Economic Study

Study began in Q1-2015, with follow-on study 1 year later. Outcomes targeted by Q2-2016.

CCT Review Team Process

Review Team Process

The process of convening a Review Team, as called for in Section 9.3 of the Affirmation of Commitments is projected to begin in Q4-2015. This will enable the availability of baseline metric data for consideration, as well as comparison data as one input to the team's analysis. Additionally, reports on the rights protection and program implementation reviews will be available. Finally, the bulk of TLDs are expected to have been delegated and launched in the marketplace at this time, enabling consideration of a variety of TLD types (for example, IDNs, geographically-oriented TLDs, community- based TLDs, brand-related TLDs) to support more detailed analysis.

Based on the timelines of previous Review Team processes, a rough estimate for this process is that the convening of the team occurs across 3-5 months, a draft report is issued within 6-9 months, and a final report is issued within 3-6 months from the draft. The Board vote then must take place within 6 months of when the recommendations are delivered.

Preparation for the Review

ICANN has been conducting a series of activities to prepare for this upcoming review. These activities include developing metrics and collecting data for benchmarking purposes to be available to the review team when it is selected.

An Implementation Advisory Group was convened by the ICANN Board in 2013 to examine a series of potential metrics that were proposed by the Generic Name Supporting Organization (GNSO) [PDF, 203 KB] and the At-Large Advisory Committee (ALAC) [PDF, 491 KB]. This team, referred to as the IAG-CCT, evaluated the feasibility, utility and cost-effectiveness of adopting several recommended metrics produced by these two groups.

The IAG-CCT determined that a subset of the metrics was best evaluated using a consumer survey. To capture an accurate baseline of end user attitudes and opinions before the New gTLDs saturate the domain space, ICANN conducted a globally representative survey conducted by the Nielson firm. The baseline was taken in early 2015 with a follow-on survey to be scheduled one year later to gauge changes in consumer trust and sense of choice in the DNS. Trust is being measured by asking for users' experiences with phishing, malware and spam, as well as experience in navigating the DNS, including reaching intended destinations online, and relative preference for mobile applications and other software that do not display URLs, like QR codes. Perceived sense of choice is to be gauged based on questions establishing respondents' understanding of how the DNS operates, including eligibility restrictions in TLDs, and general public awareness of the New gTLD Program. Taken together, these multiple metrics offer a multi-faceted picture of consumer trust based on opinion research, hard data on registrations in the New gTLDs as compared to legacy TLDs and ccTLDs, as well as on abusive activity in the DNS.

A second subset of metrics aims to measure competition in the New gTLD space based on an analysis of pricing data and other, non-price-related indicia. These two metrics are sufficiently important to capture an accurate baseline of data before New gTLD prices begin to affect the marketplace. To that end, ICANN engaged the Analysis Group to conduct an economic study, with a target start date in early 2015. The study has two primary aims: gauge the pricing practices for domains in New gTLDs against those in the legacy space; and provide a qualitative analysis of other non-price competition indicators, like technical or other business innovations. Given the sensitivities surrounding the publication of pricing data, ICANN worked closely with the Analysis Group to ensure that price data was aggregated and anonymized, such that the analysis cannot be used to engage in collusion or other market manipulation.

The IAG-CCT concluded its work and issued final Recommendations in October 2014, which were adopted by the Board in February 2015. For further information related to the work of this group, please visit the IAG-CCT Wiki.

Global Consumer Survey

ICANN issued a Request for Proposal (RFP) for the Global Consumer Survey to identify vendors that can conduct a survey representative of ICANN's five geographical regions and using local languages, as necessary,1 in accordance with ICANN-provided objective and quantifiable criteria, which launched in September 2014. A global survey was critical to align with ICANN's mission – with one Internet to serve the entire world, the survey needs to account for the perspectives of a global cross-section of Internet users.

The survey's objectives gauged Consumers' perceived Trust and sense of Choice in the Domain Name System (DNS). By surveying a globally representative sample of Internet users and registrants, ICANN aimed to capture a baseline of worldwide attitudes regarding DNS operations, which will be tested again in one year to determine how opinions have changed over time and as more New gTLDs are available in the domain name marketplace.

The Consumer survey captured some of the metrics proposed by ICANN's community members from the Generic Name Supporting Organization (GNSO) [PDF, 203 KB] and the At-Large Advisory Committee (ALAC) [PDF, 491 KB] to evaluate the impact of the New gTLD program on Competition, Consumer Trust and Consumer Choice.

Following the survey, the Review Team formed under the AoC will take into consideration the survey results as it examines other measures, such as the geographic spread of New gTLD registrations, the number of internationalized domain names (IDNs or domains in scripts that include characters outside the letters a-z, numbers 0-9 and a hyphen) available, and the relative incidence of compliance complaints, among many others.

Economic Survey

ICANN engaged with the Analysis Group to conduct an Economic study examining pricing trends and other competition indicators in the global Domain Name System (DNS) market. The Analysis Group designed and executed an initial study, in a timely manner, to create a meaningful baseline of data on multiple factors of competition and will perform a follow-on study one year later, to generate and analyze a set of comparison data.

The Economic study captured some of the metrics proposed by ICANN's community to evaluate the impact of the New gTLD Program on Competition, Consumer Choice and Consumer Trust.

As the DNS serves a large ecosystem of registries, registry service operators, registrars and resellers, and domain name registrants, the study captured inputs in a representative manner from across the multitude of players relevant to marketplace practices.

The Review Team formed under the AoC will take into consideration the findings of these studies as it examines other measures of competition, such as survey findings on end users' perceived choice in the DNS, as well as the quantities of New gTLD operators, service providers, registrars, domain name registrations, and other metrics. The review may also provide recommendations to ICANN on additional initiatives that should be undertaken.

Background Materials

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Domain Name System
Internationalized Domain Name ,IDN,"IDNs are domain names that include characters used in the local representation of languages that are not written with the twenty-six letters of the basic Latin alphabet ""a-z"". An IDN can contain Latin letters with diacritical marks, as required by many European languages, or may consist of characters from non-Latin scripts such as Arabic or Chinese. Many languages also use other types of digits than the European ""0-9"". The basic Latin alphabet together with the European-Arabic digits are, for the purpose of domain names, termed ""ASCII characters"" (ASCII = American Standard Code for Information Interchange). These are also included in the broader range of ""Unicode characters"" that provides the basis for IDNs. The ""hostname rule"" requires that all domain names of the type under consideration here are stored in the DNS using only the ASCII characters listed above, with the one further addition of the hyphen ""-"". The Unicode form of an IDN therefore requires special encoding before it is entered into the DNS. The following terminology is used when distinguishing between these forms: A domain name consists of a series of ""labels"" (separated by ""dots""). The ASCII form of an IDN label is termed an ""A-label"". All operations defined in the DNS protocol use A-labels exclusively. The Unicode form, which a user expects to be displayed, is termed a ""U-label"". The difference may be illustrated with the Hindi word for ""test"" — परीका — appearing here as a U-label would (in the Devanagari script). A special form of ""ASCII compatible encoding"" (abbreviated ACE) is applied to this to produce the corresponding A-label: xn--11b5bs1di. A domain name that only includes ASCII letters, digits, and hyphens is termed an ""LDH label"". Although the definitions of A-labels and LDH-labels overlap, a name consisting exclusively of LDH labels, such as""icann.org"" is not an IDN."