How companies are coping with gTLD applications
For businesses, a .brand gTLD can look exciting on paper. New business opportunities and increased internet security appear enticing. But once they have committed to applying for a new gTLD, applicants must undertake a long consultation process and write their applications. They must provide detailed financial and technical information, and show to Icann that their .brand is a viable project.
"The application system appears deceptively simple, but it's the basis of a registry contract that lasts 10 years. A gTLD is not just for Christmas," says Nick Wood of Valideus.
The first few questions are not demanding or testing at all. Applicants must provide basic information including the gTLD's name, contact details and proof of legal establishment. But question 11 — cybersquatting history — has been frustrating for larger businesses, according to Wood. As part of its commitment to fighting cybersquatting in the expanding DNS, Icann has demanded that companies provide personal information on senior members of staff, including background criminal checks.
"Sometimes trying to view this information is against company policy because exposure could put these people's lives and families at risk," says Wood, who wrote to Icann to voice his discontent. Gretchen Olive, director of policy and industry affairs at CSC, agrees: "At first companies are uneasy about cybersquatting checks — no one wants to do them. It is an uncomfortable conversation we have to have."
But Ben Crawford, chief executive of DotBrand Solutions notes that, while the checks can be off-putting for brand owners, they are wholly necessary: "It states in the guidebook that Icann doesn't publish details of background checks, so they are completely appropriate," he says.
Define your gTLD aim
Specifically for brand owners, question 18 can be the next stumbling block. Here, applicants have to explain the mission or purpose of the gTLD. ‘Why do you want to be part of this process?' is essentially Icann's question. Some businesses are struggling at this stage. Because they are still unclear about what their gTLD will be used for, brands can find it hard to write a convincing answer. Jean-Christophe Vignes, chief executive of OpenRegistry, says it is hard to pinpoint the "x-factor" strategy for brands. Once they know exactly what they want from a gTLD and what benefits it can bring, the path forward becomes much easier, he says. CSC's Olive adds: "A lot of brand owners don't have their plans fully mapped out, which makes things more challenging for us. But it's also rewarding and we encourage them to explore the different possibilities."
Some applicants find the entire process imposing, according to Fred Felman, chief marketing officer at registrar MarkMonitor. "The volume of questions and requisite information on the application form is a concern for some businesses — they look at it like a test. Companies need to be realistic about whether they are technically and financially able to do this."
In fact, there are 20 questions that focus on technical details. Icann asks about database capabilities, data backup policies and rights protection mechanisms, to name only three. But Roland LaPlante, chief marketing officer at Afilias, says although technical details are crucial, brand owners should work with back-end providers with a successful track-record to avoid any serious problems. "They should focus on providers with a history of supporting gTLDs — not just ccTLDs or third-level domains — because Icann's technical requirements are much stricter for the new gTLDs." LaPlante notes that, because there are sufficient technical operators to provide support, brands should focus on their financial models — the subject of the final five questions on the application form.
There have been a number of concerns here though, according to consultants. First, not all .brand applicants are looking to make substantial amounts of money from their gTLD. For these applicants, providing adequate financial information has been somewhat of a headache at Valideus, says Wood. "The questions require information on cash revenues, costs and contingency plans, but the gTLD is not always viewed as a revenue-earner," he says.
Wood says Icann's "one size fits all approach" has been restrictive and there should have been more specific questions for brand owners. "Better questions might be: ‘what would a gTLD do to your business's portfolio?'" he says. Olive adds: "The application form is written more for a start up TLD, because there is a strong emphasis on financial information."
A second problem is actually obtaining this information. Olive says brand owners can be simply unwilling to hand over financial details, something DotBrand Solutions' Crawford has also seen. "A problem we have found is that some privately held companies are shy about giving away financial information. This can be tricky to overcome," he says.
And delving deeply into the costs of running a gTLD can provide an unwelcome reminder to brands of how expensive the process is. OpenRegistry's Vignes says businesses require reassurance about the benefits of a gTLD, even after committing to the process.
"They can worry about costs, but costs should be seen as a return on investment. Applicants become concerned about disrupting their business. They sometimes question why running their business on Facebook isn't sufficient, but Facebook and a .brand will coexist. It is dangerous to put all of your eggs in one Facebook basket," he says.
Planning for the long-term
The final question on the form, the continued operations instrument, asks how applicants would support themselves in the event of registry failure. They must provide either a letter of credit or a cash escrow to show that the business can survive for at least three years. But a new proposal, called the continued operations fund (COF), has added pressure to brands, which would have to change their survival approach if the changes were accepted.
Under the COF, the registries stakeholder group, led by Afilias, has proposed that all successful applicants pay an up-front fee of $50,000 into a collective insurance fund. This proposal, which was available for public comment until December 2 2011, has not been popular with consultants.
"It is absurd and spreads more risk to others. The original proposal is far more appropriate and brand owners can support themselves with only a modest investment. The COF would help more speculative investments and these companies are trying to spread risk to where there is no risk," says MarkMonitor's Felman.
Leaving finances and technical details aside, Crawford notes another problem: different departments in large companies have struggled to communicate effectively. Typically a business will need to bring together a number of departments, all with an interest in the gTLD's development. At $185,000, finance directors want to know what they are paying for, while lawyers need to understand the implications for IP protection. Marketers may see exciting new opportunities, while IT specialists need to understand the technical implications of a gTLD. According to Olive, though, internal communications are improving. "It used to be the case where the legal team were the only department that knew what was going on, but now the others are increasingly up to date."
Consultants encourage brand owners to set aside internal difficulties and develop a strong strategy for their gTLD. LaPlante says brand owners must have a single point of contact to make the application process smoother for consultants and registry providers. With the application stage edging closer, applicants who wish to register a .brand and who require help with their applications are running out of time. The specialists that Managing IP spoke said it was not too late to work with them, but businesses should move now if they hope to submit a completed application by March 29 2012.
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