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More Financial Options May Mean More Applicants for New gTLDs by Pat Kane

In developing its plan to create potentially hundreds of new top-level domains, the Internet Corporation for Assigned Names and Numbers (ICANN) had to strike a difficult balance between technical stability and economic accessibility. And while ICANN did a good job of establishing that balance, a small market-driven adjustment to the organization’s policy could expand the program’s reach, without jeopardizing stability and security.One of ICANN’s core responsibilities in creating the new gTLD program was to ensure that new top-level domains did not harm the stability and security of the Domain Name System (DNS), which is critical to the effective functioning of the Internet.To meet that responsibility, ICANN has created an extensive and well-thought-out list of technical guidelines, resource requirements and financial benchmarks that new gTLD applicants must meet in order for their applications to be approved.While these requirements are absolutely necessary, they also present a challenge. One of the key goals of the new gTLD program is to reach new markets, especially those in the underserved areas of the developing world where new Internet expansion could provide significant economic and social benefits. But many potential entrepreneurs in those markets may be stymied by steep financial requirements that apply to all new gTLD applicants, regardless of location or target audience.Nobody wants ICANN to lower these critical benchmarks for new gTLDs, but there may be some leeway for ICANN to provide applicants with a wider range of options for meeting their financial obligations under the new gTLD plan.Under the current version of the gTLD Applicant Guidebook, new applicants would be required to escrow three years worth of operating funds as a perquisite for securing ICANN approval to operate a new gTLD. While the amount prescribed by the “Continuing Operations Instrument” is widely supported, ICANN should provide as much flexibility as possible in how prospective registry operators meet their requirements.Some members of ICANN’s Registry Stakeholder Group (of which Verisign is also a member) have proposed an alternative model under which all prospective operators would contribute $50,000 to a Continued Operations Fund, which could be tapped “to ensure the continued operations of a new gTLD registry in the event of the early termination of the Registry Agreement between the Registry Operator (RO) and ICANN.”While this approach is interesting, neither it, nor the escrow model in the Guidebook represent the only possible options for ensuring the protection of registrants and the continued operation of new gTLDs.Another possible tool that has been discussed has been the development of an insurance instrument for new gTLD applicants that could provide the same level of protection envisioned in the COI, but at a lower out-of-pocket cost to applicants with less upfront capital available to tie up in an escrow fund.With all the innovative minds in the domain name space, there are likely many other approaches that could provide the security and stability that ICANN needs, while also allowing for the flexibility and accessibility we all want. By letting the market – and applicants – play an innovative role in ensuring continuing operations, ICANN will help to spur more applications, serving a broader audience, in manner that maintains the underlying integrity of the DNS.What sorts of approaches would you like to see broaden the funding choices for prospective new gTLD operators?This article by Pat Kane, Senior Vice President and General Manager of Naming Services at Verisign, was sourced with permission from: