As expected ICANN, the nonprofit group that manages the Internet domain name system, unanimously voted to begin the process of relaxing the rules for generic top-level domain names (gTLDs).
The action means that companies and other organizations eventually could run their own domains. For example, eBay could run the domain .ebay, and Microsoft could run the domain .microsoft. Currently, the endings of top-level domain names are limited to a few which include .com, .net, .org, as well as individual country codes such as .ca for Canada or .uk for the United Kingdom.
Prices to register these new domain names, expected to be anywhere from US$150,000 to $500,000, would most likely prohibit individuals from applying for new domain names. ICANN said the high fees would allow it to recoup the approximately $20 million it expects to spend on implementation of the new policy.
Groups applying for new top-level domain names must also prove they are technically able to operate Web sites or they must contract with a company that does. New gTLDs will probably start appearing by the end of 2009, ICANN said.
Domain-name registrars, meanwhile, are divided on the merits of the introducing the new TLDs.
"This is a great thing for us and our customers," said Jon Nevett, vice president of Policy and Government Affairs at Network Solutions, and the elected representative from the registrar constituency at ICANN. "I think we'll see some innovation in the marketplace and some ideas that we would never think about. Some people will be applying for new TLDs that are very innovative and creative and will hopefully change the landscape of domain name services."
Elizabeth Driscoll, a spokeswoman for The Go Daddy Group, said the significance of the vote will depend largely on what new TLDs are proposed and approved, and whether they will be in demand or benefit Go Daddy's customers.
"We've grown quickly by listening to our customers and working to give them what they want," Driscoll said in an e-mail. "Just [this week] The Go Daddy Group domain name portfolio hit the 30 million mark. Currently, we offer 44 different TLDs. Regardless of the new TLDs proposed, Go Daddy will stick to our formula for success - focusing on customer service and support to meet the customers' demands."
Register.com, meanwhile, said it is taking a wait-and-see approach.
"The introduction of new TLDs will provide more choices, but it is yet to be seen if these choices will provide domain names our customers will want," said Steven Vine, deputy general counsel, Register.com, in an e-mail. "Additionally, the rules for these TLDs are yet to be finalized and there are risks that if the right framework is not developed, we may see a repeat of mistakes of the past. For example, as we have learned, in order to maintain a competitive marketplace, we must prevent unfair advantages among registrars."
ICANN also unanimously approved a fast-track process to create a limited number of internationalized domain names (IDNs) that would allow addresses to be written in languages using a non-Latin script, such as cyrillic, Arabic or Chinese.
"That fast track for country domains really gives me a lot of concern," said Steve DelBianco, executive director of NetChoice, a coalition of trade associations, e-commerce businesses and online consumers. "If the fast track is only for country domains, then ICANN puts today's global domains, .com, .org and .net, on a slow track when it comes to reaching users in different alphabets."