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Vertical Integration Options Report Available to Community

The paper entitled “Registry-Registrar Separation: Vertical Integration Options” [PDF, 44K] was produced for review by the ICANN Board during its 4 February 2010 Board Meeting (as was discussed in the preliminary report of that meeting at It was requested that the paper be produced to the community to provide further information on this topic.

As a result of discussions surrounding the implementation of the new gTLD policy recommendations, ICANN Staff commissioned an economic review of vertical integration issues relating to new gTLDs in the registry and registrar marketplace. ICANN engaged Steven Salop (Professor of Economics and Law, Georgetown University Law Center) and Joshua Wright (Assistant Professor of Law and Economics, George Mason University) were selected for their notable reputations and diversity of viewpoints in the issue area. They have also participated and presented in an ICANN Meeting forum in Sydney, Australia.

The report is being produced for public consideration as part of the broader dialogue and inputs on the related issues. The ICANN Board assented to the publication of the report during its workshop in Nairobi on 7 March 2010. It is important to note that publication of the report should not be considered as a validation of the information or positions contained therein. Also, it is not offered as the viewpoint of ICANN, the ICANN Board of Directors or ICANN Management, but is being offered to inform the public debate on the topic.


    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"""" is not an IDN."