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When free markets make it worse: new TLDs (asmartbear.com)
157 points by amirmc on July 18, 2011 | hide | past | web | favorite | 64 comments

Terrible article, in my opinion. The thesis is not supported in the slightest. This was just an unfocused rant about the new TLDs and a quick upvote grab by putting a trendy jab at free markets in the title.

What are free markets making worse here? He agrees that participants should be allowed to buy and sell TLDs at whatever they are willing to pay. How is that not free market? He suggest we fight this buy not paying for it. How is that not free market? His only complaint seems to be that the price is ridiculous, and ICANN should be "better than that".

The price of something is what someone will pay for it. If you don't have a problem with people choosing what they will pay for, then you don't have a problem with free markets.

Complaining about confusion for users, cell phone towers dotting the landscape (?), and that some other people would spend their money on something else (free market), do not help your claim that free markets make it worse either.

The new TLDs are a scam by the domain name registrars. If you are a company that owns trademarks, you have to defend them or lose them. That means buying the domain name - in every TLD - and now a whole TLD for a 6-figure sum! And what does it cost the registrar, a few bytes of storage? It's a license to print money, is the charitable way to look at it, I would say it's a protection racket.

New gTLDs are required to support both the UDRP and trademark clearing houses. These two options provide trademark holders with protections that are unavailable in any other sphere of the market. With clearing houses trademark holders don't need to buy domains, they can block their trademark from being registered, albeit with a one off fee.

The trademark lobbyists have managed to garner a priori chilling of speech and yet this doesn't seem to be enough to satisfy.

With clearing houses trademark holders don't need to buy domains, they can block their trademark from being registered, albeit with a one off fee.

So pay us, or... pay us? Those are the two options?

There is no such thing as a free lunch; if you want a government backed monopoly on something you can surely bet it will have to cost you X. Whether X is a figure that is too much for you is a free market decision you will have to make.

Is a few thousand a year too much for a limited government backed monopoly on a name? I would say no.

I would also like to point out that I haven't discounted the social benefit of trademarks, but the registrant pays model is probably the best practical model.

I would definitely agree that there is a social benefit to trademarks (much more significant than that of patents or copyrights).

I don't think I object to the cost in the general sense, from the registrant's perspective. But from the other side, the registries have the potential to make a decent chunk of change off this, which really feels like they're making money not for providing a useful service, but by exploiting features of trademark law. It just feels a little dirty to me.

I don't really have much pity for someone who goes to google.xxx expecting google.com for porn and becoming infested with malware. The risk of BigCo not owning their domains in all possible TLDs is from phishing targets on their potential customers, email attacks. Apart from that, it seems really unlikely that target.xxx would outrank target.com in a search, so target.xxx would never be visited aside from idiots thinking it's Target With Porn or clicking an email link. So if the TLDs are a scam, the BigCos that play along are willing suckers.

These aren't restricted to the old 7 bit ASCII character sets though, are they?

We've already had cases where people were registering famous domains with one character changed so some high unicode value that was graphically but not conceptually equal to the original character. Net result, new domain whose address looks and reads identically (to a human at least) to the domain it's trying to impersonate. Hopefully there are safeguards in place but that happening at a TLD level would hardly be pleasant.

That still doesn't address the issue that no one will visit these domains except for phishing victims with incredibly poor spam filters. Even within ascii someone might register target.c0m or target.corn and be able to fool people in a void. Presumably search engines like Google use unicode and can distinguish the different o's.

Most modern browsers display Unicode domains only for TLDs that have a character set policy that prevents homograph attacks. Newer IDN TLDs (like .рф) also have restrictions -- .рф only accepts Cyrillic domains, for example.

What's that stand for, Russian Federation?

The sky is not falling.

Companies will not lose their trademark if they fail to register the domain in all possible TLD's and/or register and maintain a TLD. Considering the latter requires becoming a registrar, you are essentially asserting that owning a trademark effectively requires every company to enter the domain business. That assertion is absurd.

I think you (wrongly) mean to point the finger at the registries. Registrars don't create the string, they just offer it for sale. The registry creates and manages the string (.xxx, .biz, etc.)

If you are a company that owns trademarks, you have to defend them or lose them. That means buying the domain name

How does that follow? Coca-Cola doesn't have to own Coke.org to protect its trademark. It would have to sue anyone who used it in the context of soft drinks. If a cocaine rehab clinic got the domain then Coca-Cola wouldn't have any trademark issues.

Yeah, but buying the domain is cheaper than suing.

If a TLD registry deliberately creates a TLD in order to shake-down existing trademark holders, they are probably violating U.S. RICO (racketeering) statutes.

I won't hold my breath, but I'd love to see some enterprising attorney general subpoena some registries internal emails...

You can put any name on a sign, too, but if that sign contains a trademarked name, you can have action taken against you.

I don't think TLDs are special in allowing trademark infringement.

ICANN is a bureaucracy granted power by the United States government. Its embarrassing that this kind of linkbait crap makes it to hacker news.

As for the underlying issue, I'm all for new extensions. What bothers me is the dirty games being played when they are sold. Registrars create special rules that benefit themselves such as selling generic word domains off for a premium.

again, its the registries that do this - registrars are mainly a sales channel, we don't set the rules.

That's not exactly true. Registrars are well represented in any decision ICANN makes.

Yeah, the free market would work effectively if no producer and no consumer had the power to set the price...

An alternative model, though, is mailing addresses: bureaucratic, cheap, and a primary part of civilization for 2500 years.

It would have been interesting if the USPS had jumped on this idea about 20 years ago, but now it is too late.

I agree. It would seem that a corollary to the author's argument is that IP addresses should be just fine at the basis for navigation.

I think TLDs solve a problem, to some extent, but not the one ICANN seems to think they solve.

You can have puppies.com and puppies.org — I suppose that helps if you run an organization to help puppies, and I own company that sells puppies. But that does not help when there’s another organization that helps puppies in some other country.

Ah, but we have ccTLDs — you can be puppies.us, and the other guy can be puppies.in. That’s a different naming convention entirely, awesome!

But, really, if you tell a bunch of people about your great new puppy venture, most of them are just going to go to puppies.com (thanks for the business!) or search for something on Google.

TLDs are meaningless! They’re just semi-random bullshit that we stick onto domain names so there can be more than one of each domain, to reduce the chance of someone getting stabbed over who owns the one true “puppies”. (All of the above taken? Be hip and get puppi.es!)

Of course, in the real real world, puppies.com, puppies.org, puppies.us, puppies.in, and puppi.es are all taken by domain squatters, so you and your dogs’ dreams are fucked anyway…

Unless you want to race me to puppy.dog.

"Ah, but we have ccTLDs — you can be puppies.us, and the other guy can be puppies.in. That’s a different naming convention entirely, awesome!"

But the point is that it shouldn't have been like that. puppies.org.in, puppies.org.us, and so on. But unfortunately the US didn't go down that road, so we end up with a total mess.

That said, the international nature of the internet makes country-based TLDs a little inappropriate anyway.

Who cares?

Personally, I think search engines beat DNS at its own game a long time ago. Maybe not for some of us but if you ever watch many others, they search and click (or QRcode scan). The URL bar is currently just some magical text to most people and might for that reason, completely go away in future browsers.

Besides, the best way to get people to a site is to get a link planted somewhere they already are. Post a tweet. Post to your Face+ profile. Pay for an ad. Get a well known blog to review something. All of these seem to be much more effective than caring about domains being hard to say or type.

The internet is not just web.

Right, but the article was about sites and specifically users getting to sites on something we all like to call the web. Especially once the article pulled out the http:// thing.

More to my point above, the people the article is complaining about probably don't bother distinguishing the internet and the web in the first place.

Interesting article. One concern is that the steep cost of the new TLDs might make it more difficult to establish a domain name that has "credibility". For instance, second-level domains under .com might eventually be seen by some consumers as "second-rate" ("inferior goods" in economic terms, perhaps the way some users view non-.com domains like .biz now).

Sites with their own TLD might be seen as more credible consumer destinations, establishing 2 different tiers of credibility, and reinforcing the standing of incumbent e-commerce sites.

You can imagine that having your own TLD might factor into your search engine rankings at some point or might be given more leeway by spam detectors.

The steep $185K registration fee for a service whose cost to provide and maintain is pretty miniscule in comparison does not level the playing field.

Simultaneously this weds ICANN even more strongly to the interests of deep-pocketed clients and would make it even harder for non-commercial entities to get fair treatment.

Wealthy organizations should not have special privileges when it comes to naming rights. Especially when the supply of naming rights is essentially unlimited. This is a good example where a quasi-public good with nearly limitless supply is privatized and made artificially scarce for the benefit of a few.

And what about users who register second-level domains within a privately-managed TLD? Would they be subject to even more sweeping seizures and shutdowns for objectionable content? ICANN may find it easier to deflect both the responsibility and blame for such "oversight" onto privately-managed TLDs once the number of such domains increases. "Sorry your domain was snatched, but you'll have to take it up with .SomeTLD."

Hopefully P2P-DNS and namecoin will gain traction.

So we're talking about a free market, yes? Ideally, if folks didn't like the pricing scheme that ICANN has presented, they'd go to a competitor. Then you could "fight with your wallet", to quote the article. Where is ICANN's competition?

Ah but now you're bringing up so many more profound issues, such as centralized versus decentralized DNS, what a decentralized DNS even means, whether there should be a DNS, the SSL certificate authority man-in-the-middle fiasco, etc.

In the current situation, a domain name is property, which means it can only have one owner, which means that someone must maintain a title registry, somewhere.

Given the current situation, it's hard to think outside that box. But the newer ideas I've heard, such as including a hash digest of a public key inside the URL itself, and even the methods employed by TOR with no central registries, are promising. With those methods, I don't think you'll end up with domain names that are universally unique and universally recognized and easily typed (see Zooko's Triangle), but maybe that's not such a bad thing, given the use of search engines and bookmarks.

To answer your question directly, there are alternative top-level domain registries. But most computers and browsers are not configured to query them.

Depends on what you consider the market to be.

Domain names: Public Internet Registry (pir.org manages .org), Nominet (in that ICANN recognises Nominet as the owner of .uk - http://www.theregister.co.uk/2006/07/03/nominet_joins_icann/ - granted this probably requires ICANN to delegate the running of TLDs to organisations. )

Online naming/branding: Facebook, Twitter (in that a growing number of organisations and/or their offerings are being advertised by their Facebook profile name. I'm seeing it regularly in movie trailers these days.)

This article was more nuanced than I first thought. I figured it would be yet another screed against "too much choice", as if the fifteen brands of mustard in the grocery store throws shoppers into a fetal position, sobbing.

Thankfully, the author does not advocate the use of force to prevent this. As he says:

So should it be legal? Of course, they can do what they want. And that’s better than the other extreme; I’d rather live with too many products and companies making money off other company’s ignorance than the reverse, where regulation stifles progress, controlled by the only entity capable of more waste and more ignorance than even the largest company: government.

With the threat of force off the table, I am far more likely to hear him out and be amenable to his suggestions. I for one will not be buying a new top-level domain, but anyone who wants to shell out $185,000 is free to do so. It makes no difference to me which account number holds that $185,000, since it's not my money to begin with.

What force? As far as I know, ICANN only manages DNS on behalf of the US government, as stated in contract. They can simply not renew their contract, no force needed. In fact, the current contract expires in September.

I was referring to his question: "So should it be legal?" He answered: "Of course, they can do what they want." Therefore I conclude that the author does not advocate that government employees use force to stop this new TLD business.

OK, but in reality the question is irrelevant, because the govt. can stop it without making it illegal or use force.

Oh! You just blew my mind. You meant "They [the US GOVT] can simply not renew their contact [with ICANN]." For some fool reason I had that backwards.

Interesting scenario, but then my questions would be (1) who would the U.S government use besides ICANN, or even (2) could ICANN just keep doing what they do with the U.S. government's sponsorship?

Shows you how much I know about what goes on up there.

Well, even now the DOC¹ has to approve any change in the DNS root zone, so ICANN can't unilaterally do whatever they want. My guess is that the govt would simply cut ICANN out of the loop and implement the policies themselves.

As for who would run it besides ICANN, well, before 1998 IANA² was run by Jon Postel, so it's not absurd to consider they could find someone to manage it. This is purely speculative, though, I really don't know nearly enough to be sure about this.

¹ Department of Commerce ² The organization (nowadays, set of functions in ICANN) which actually manages DNS and such.

I hate the domain registration system as a whole, but I love the idea of TLDs. It's likely my anger is misplaced since I scarcely understand the business of it, but I find it infuriating that most ".com" domain names are taken by squatters. Perhaps squatting is just too hard to enforce (I think somebody could come up with an anti-squatting policy), but more likely I feel a lot of people decided it better to make an easy buck and have the "market" sort itself out.

However, I really like the new concept of TLDs. There are a few reasons why I think this will benefit the internet as a whole.

First, if it catches on, then TLD's will mean a whole lot less. ".com" will lose it's ubiquity, and I (along with thousands of entrepreneurs) will finally be able to register suitable domain names. No more need to make up names. No more need to negotiate with professional squatters, domain name dealers, etc.

Second, it's not just about the name of the TLD, but a lot about the policy. Imagine if ".startup" was just $1/yr, but you have 1 month to put up a real site or your domain gets put back onto market. Or you could have strict rules of inclusion: Imagine a TLD called ".realperson" that requires a video of you to be sent doing a backflip before registering the domain. Of course, the authentication of doing a backflip would likely be replaced by something meaningful.

Third, as alluded to in my second point, it creates opportunity for businesses built off of the concept of TLDs. There really is a ton of room for innovation.

Finally, I think there is a lot in a name. .tv, .info, etc didn't fail to catch on because nobody cares about names. They failed because all of the .tv and .info domains weren't owned by the same entity. If you add cohesion to a TLD, I think it could become quite powerful, and I think there are actually a lot of cool things people will come up with. For example, if .info were created under the new system, "foo.info" might be able to send you to a wikipedia summary of "foo". Alright, that example is not entirely useful, but you get the picture.

* Disclaimer, I scarcely understand the domain business. Any correction or insight is greatly appreciated.

If it catches on, yes. Did you note the price? $185K for a domain name. I agree with you about the domain-name squatting - it's a real issue - but I don't see how this makes things any better.

The .tv TLD is owned by a country - Tuvalu if I recall correctly, much like the .co is owned by Columbia and making a reasonable sum these days.

I agree, but:

"I know you’re already with me. The next step is to fight the leeches. Fight with your wallet and your words."

How do you fight with your wallet against ICANN--a monopoly?

I think the idea is that some of the new TLDs will be created as registrars who sell individual domains to third parties. So, for example, someone might register .camera and then try to sell .camera domains to other people and companies.

If, like .biz or others, .camera domains never catch on (i.e., if people who buy domains don't buy those specific domains), other potential TLD creators will be less likely to do so in the future.

I see new gTLDs as a good thing.

Obviously the registrars are in it for the money but this will be like the new .com domain but with several advantages:

1. The high price will eliminate squatting;

2. The lack of squatting will greatly reduce phishing through real-looking domains;

3. The price is low enough that startups with serious series A/B funding will probably buy their gTLD; and

4. gTLDs may well be out of the jurisdiction of ICE and the US government (unlike .com and .net domains as witnessed by recent seizures).

Bring it on, I say.

I wish I saw any basis for 1, 2, or 4. Unless by "eliminate squatting" you mean "eliminate TLD squatting", which would make 2 as irrelevant as 3.

In particular, "real-looking domains" have never been a required detail of phishing attacks, which only have to look plausible on the right side to do damage. A profusion of TLDs only serves to degrade what "real-looking" means to non-nerds.

Firstly, squatting is a problem that ICANN itself created (or at least contributed to creation of) through their broken reseller policies. Since squatting drives domain prices up, it might even be financiall beneficial to ICANN.

Secondly, squatting is mainly a problem because it drives the prices up, especially for small website owners. Sure, you can buy a cool domain you want, but it will be $1k, instead of eight dollars. A corporation could simply sue for their brand name. How will thse new expensive gTLDs solve this problem?

Thirdly, I would argue that the same effect you describe could be achieved simply by creating .corp domain that is more expensive and has some checks in regards to business legitimacy. That would be less disruptive for everyone.

New gTLDs could have been be a good things, but not when they are "released" like this.

Firstly, squatting is a problem that ICANN itself created (or at least contributed to creation of) through their broken reseller policies.

Would you mind elaborating on that? I'm curious what you think they should have done.

There are two issues that, in my opinion, contribute to massive squatting problem.

First, squatters can buy domains in bulk and pay next to nothing for each of them. (Sometimes they pay nothing at all, abusing trial periods and renewal rules.) This is what makes squatting on such a massive scale possible.

Second, modern DNS structure is effectively a global namespace: there are only a handful of TLDs that matter and they are awfully generic, so they collide. TLDs do not classify anything, and they should. Also, if someone bought the name you want, there are no equivalent (but different) alternatives. That's another thing that makes squatting profitable.

1. Squatters are still going to squat. They will continue to squat on the existing gTLDs, and since one of the requirements of the application process is that you can prove you can run a registrar, almost all the new gTLDs will be registrars, selling domains. They won't be corporations. So the squatters will also squat there.

2. There's no proof of this, and it's quite doubtful.

3. I really hope no VC member of the board would let a startup waste their money on this. If they would, I never want to hear from that VC ever. Also remember that the 185k application fee is the tip of the iceberg in terms of what this will cost.

4. There's no proof of this. If the infrastructure ends up running in the US, good luck arguing that.

3. You can only get them if you are an established brand. 4. Are you sure? I think they will be still under US jurisdiction.

Are there a security and usablity problems with having to maintain an ever growing list of TLDs? Browsers need to know what the TLD in a URL is so that they know how to stop cross site cookies being created, as well as for lots of other reasons that affect useability[1]. If the TLD list gets too long could it slow down web browsers?

1. http://publicsuffix.org/learn/

It surprises me that compared to the huge fuss over IPv6, custom TLDs feel like they've popped up from nowhere - but they will potentially cause very similar widespread problems with any kind of CMS or web form or shell script with email or URL validation, or webserver, proxy or rewrite engine, framework, etc. being unable to handle them.

Have I just missed the fuss and planning, is it a non issue, or has it not happened?

Dozens (maybe hundreds) of lawyers and bureaucrats have spend about five years arguing about new gTLDs. It's been meticulously documented (i.e. deadly boring) at places like http://www.circleid.com/

I'm a bit more optimistic about the new TLDs, I hope multiple TLDs are created with a fairly generic name, .site or something, and domains sold for pennies each.

While they will never be .com, these new TLDs will hopefully devalue .com and the other old TLDs, making the existing hoarded domains into more general use

From my reading of things, you can't just fork over the cash and obtain "blah.mysite" - your new TLD needs a business plan - and that has to be approved. You need to sell (or otherwise distribute) domains beneath that - you can't just keep the TLD for yourself.

IBM can't just register ".ibm" and keep it to themselves - that won't fly.

"But the market isn’t wise. It seeks immediate gratification over long-term utility. It seeks profit for the few instead of optimizing for the many. The market has a child’s proclivities, not an adult’s wisdom."

Obviously true now. Has this always been the case or has something changed?

Why do we even have TLDs in the first place?

I guess really I'm asking why we have 2nd level domains. Why not just charge everyone $9/yr for a word at the top level? This seems unlikely to be a technical issue.

There's only one new TLD that we need, and it's ".app". If I had the money, I'd be building a registrar for it right now. :)

If people want a TLD, there is a market for it. How is it a bad thing to profit from providing something people want?

Uh, don't you mean within reason? What if I wanted you to be my slave? And markets can have negative externalities, especially on the existing markets they're dependent of, so I think some of the concern is justified even though I'm typically pro-free market.

Of course I mean within reason, why wouldn't I.

I don't see how your statement that if you wanted me to be your slave applies. But, say you did want me to be your slave, if I could profit from it and held the reward for doing so as greater than doing my own thing, then yes you can pay me to be your slave (not that that would ever happen). In that case am I still you slave or have we entered into an voluntary agreement? If you plan to use force to make me your slave, well then we don't even have a market do we!

Yes I do agree that there may be a negative externality, but why is of any concern to ICANN unless they violate others rights. Have they violated someones right to only have a dozen or so TLDs? If so, prove that there is such a right.

There is a market, there is demand. So again, why is it wrong for someone to profit by providing a solution that does not violate someone else's right?

The publicsuffix.org list is about to get incredibly messy and annoying to keep updated.

Free markets stopped being a means to an end and became an end in itself early in the Cold War. Whether gTLDs spur "innovation" in whatever space ICANN is defining for us is irrelevant. At any rate, if ICANN was serious about "the magic of the free market" or whatever other nonsense, they would implement distributed DNS and then dissolve permanently. One quality of a healthy free market is that power is distributed such that no one entity can grab control of the entire economy. That's not the case here. Rather they are interested in: scamming money out of trademark-holders, and keeping enough power that they can act as the tool of the US government when the need arises (the need will continue to arise more and more frequently).

It seems like it's been said already, but to make sure it's stated correctly, let me specify:

This is not the free market at work: The free market would be multple DNS hierarchies being run simultaneously, and users choosing which ones to use.

Our 'choice of DNS' is non-existent; we're just getting forced into using a shittier product.

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