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Operators Should Determine “Open” or “Closed” gTLDs

Operators Should Determine “Open” or “Closed” gTLDs

Lenard Cites Benefits of Flexibility in ICANN Comments

Contact: Amy Smorodin
(202) 828-4405

March 7, 2013 – Individual operators of generic top-level domains (gTLDs) should determine if registration policies should be “open” or “closed,” recommends Technology Policy Institute President Thomas Lenard in comments filed with the Internet Corporation for Assigned Names and Numbers (ICANN). Leaving the decision to the operator allows experimentation and innovation in business models and promotes flexibility, making it easier to allocate gTLDs to the highest-valued use as business models or economic conditions change.

Lenard explains that although TLD registration has historically been open, benefiting the growth of the internet, “adding new options to the status quo is more likely to unleash new forms of innovation.” For example, closed gTLDs may be a way to provide services with enhanced security. “In order to bring the benefits of a competitive TLD market to consumers, ICANN should generally take as light-handed a regulatory stance as possible, as long as it meets its technical responsibilities,” Lenard states.

Allowing operators to determine if a gTLD will be open or closed also works in tandem with ICANN’s decision to auction gTLDs by allowing the domains to move to their highest-valued uses with minimal interference. To illustrate the dangers of a “command-and-control” regime for TLDs, Lenard cites the difficulty and expense of re-allocating radio spectrum previously restricted to specific uses. “Although the U.S. and other countries have moved toward a more market-based system, the costs of the legacy system are still reflected in the scarcity of spectrum for wireless broadband uses,” Lenard explains.

Lenard also addresses concerns that closed gTLDs are anti-competitive, explaining there is no evidence to support the claim. “First, we already have experience with generic second-level domain names – e.g. cars.com – which have provided useful services with no apparent anticompetitive effect.” In addition, operators and ICANN are subject to U.S. antitrust laws if the TLD system is used in an anticompetitive way.

“In sum, ICANN should provide maximum flexibility for operators to experiment with new business models,” Lenard concludes. “This is the best way to promote innovation on the Internet.”

Lenard’s comments are available on the TPI website.

The Technology Policy Institute

The Technology Policy Institute is a non-profit research and educational organization that focuses on the economics of innovation, technological change, and related regulation in the United States and around the world. More information is available at https://techpolicyinstitute.org/.

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