New gTLDs - Competition, Consumer Trust & Consumer Choice Review Interim Findings & Next steps
The Competition, Consumer Trust and Consumer Choice Review Team (CCT-RT) just concluded a week of meetings at ICANN57 in Hyderabad. The CCT-RT held two days of face-to-face meetings, an engagement session with the ICANN community, a meeting with the ICANN Board as well as several Chair updates to ICANN Supporting Organizations and Advisory Committees (SO/ACs) to share its preliminary findings.
The Review Team is going through research findings and developing initial recommendations. Significant progress was made at ICANN57 to refine the team's findings and form the draft recommendations. These recommendations will be posted for public comment.
What were the Three Major Achievements of this Meeting?
The CCT Review Team:
- Developed consensus of findings within the Review Team subgroups in order to further its drafting sessions;
- Received community input during its engagement session;
- Updated SO/ACs and the ICANN Board on the progress of the CCT Review.
Key Findings Presented at ICANN57
At a high level, it appears that nothing dramatic has occurred from the standpoint of increased competition or cost. Overall, the sense is that the Program is moving in the right direction. This is based on the following key findings:
Consumer Competition and Consumer Choice Findings
- The New gTLD Program is seeing an encouraging adoption rate by the marketplace. Current trends show that second-level new gTLD registrations are evenly split with second-level registrations in legacy gTLDs. In just the last two years, new gTLDs have grown to capture 9% of market share1. New gTLDs represent about half the overall growth in gTLD registrations since the end of 2013, and about one-third of the increase in total registrations (including ccTLDs).
- There has been a decrease in concentration among registries as a result of new gTLD entry.
- The structure of the TLD market, with more registry service providers providing backend services and registrars providing distribution services, has apparently lowered the overall minimum viable scale of registry operation. This may allow smaller registries to operate when they otherwise would not because of high capital and marketing costs.
- As a measure of choice,18% of users prefer to register in new gTLDs even when the second-level domains (SLD) is available in .COM. This is particularly true in Internationalized Domain Name (IDN) TLDs. In some IDN TLDs, >60% of SLDs registered are available as exact matches in .COM.2 However, a majority of new gTLD registrations (65%) are parked or unused, although there is considerable per-TLD variation (e.g., .xin is 95% parked, .science 23% and .xyz 65%).
- The amount of defensive registrations appears to be well below feared numbers, but the CCT-RT anticipates answers to an impact survey the International Trademark Association (INTA) plans to field in the next couple of months will provide more information on costs borne by trademark holders.
Safeguards & Consumer Trust Findings
- Due to the newness of the safeguards and the lack of specific data regarding DNS abuse before and after the New gTLD Program, and the impact of the safeguards on DNS abuse, it is difficult to draw conclusions at this time about the effectiveness of safeguards. As such, the CCT-RT examined the implementation and enforceability of the safeguards and found them generally to be both implementable and enforceable. These findings indicate that ICANN is taking positive steps toward creating a more trustworthy DNS while mitigating the risks associated with its expansion.
- Examining rights protection mechanisms introduced with the Program, the CCT-RT sees a drop in Uniform Dispute Resolution Policy (UDRP) proceedings without a corresponding increase in Uniform Rapid Suspension System (URS) proceedings, leading to an overall drop of 7% (Total complaints filed: UDRP + URS). This might speak to the effectiveness of the Trademark Clearinghouse.
- The global consumer and registrant surveys, published in two phases a year apart, begin to shine a light on consumer preferences and the tie between familiarity and perceived awareness. While it's difficult to make assessments about trust in the absolute, it seems clear there has been no degradation of trust in the DNS overall, and that users have a preference for gTLDs that have meanings. They also have an interest in restricted TLDs and enforcement of those restrictions.
Application & Evaluation Process Findings
- One of the studies most recently commissioned by the CCT-RT is of potential applicant cohorts in the global south. In an attempt to ascertain why there weren't more applications from Africa, Latin America, the Caribbean and Asia, the study conducted a set of interviews of entities that did not apply for new gTLDs but might have if there had been better outreach, access to better information/help and a better understanding of costs. It's clear that improvements can be made to the outreach process, especially with more information and potential templates and case studies for new entrants to explore.
- Results from a partially completed survey of applicants revealed significant frustration with the application process but respondents said that overall they would apply again, even with the same system. Most process improvements would aim at increasing the clarity and efficiency of the process.
One thing that has become clear to the CCT-RT is the need for additional data to be collected and curated by ICANN on a more regular basis. A large part of the recommendations will involve the need for robust and complete datasets for future review teams, outside analysts and policy development teams.
What are next steps for the Review Team?
The CCT-RT will take research findings and community recommendations and spend the next 6 weeks building a draft report. The report will be posted for public comment in December 2016. While the Review Team already has data from studies and surveys that serve to inform its work, it is hoping to factor additional reports into its final report, as outlined in the graphic below.
What is the next opportunity for Community members to observe/participate?
The CCT-RT will be seeking public comment on its draft recommendations in December 2016. In the meantime, it welcomes any feedback you may have and invites you to share your view via input-to-CCT-RT@icann.org (publicly archived mailing-list).
1 Registration data for gTLDs from ICANN monthly transaction reports for October 2013 and March 2016
2 Data is based on BRDA registration data from April 2016