Bloomberg News

Retailers Seek Delay in Expansion of Internet Naming System

October 24, 2011

(Updates with quote from letter starting in third paragraph.)

Oct. 24 (Bloomberg) -- A retail-industry group asked the U.S. government to delay plans to expand the Internet’s address system, saying store owners need more time to assess the impact of adding hundreds of Web suffixes such as .bank and .nyc.

The expansion approved in June by the nonprofit Internet Corporation for Assigned Names and Numbers has “largely flown under the radar of most commercial businesses,” Mallory Duncan, general counsel of the Washington-based National Retail Federation, said in a letter today to the Commerce Department.

“The single comment we are hearing most often from retailers is that they wish they had more time,” Duncan said in the letter, which was sent to Lawrence Strickling, head of the Commerce Department’s National Telecommunications and Information Administration.

Icann has managed the Internet’s address system since 1998 under a Commerce Department contract that is set to expire in March. The Marina del Rey, California-based group oversees 22 generic top-level domains, known as gTLDs, including the .com, .org and .net suffixes, which together account for almost 120 million Internet addresses.

After years of deliberations, Icann’s board of directors voted June 20 to increase the number of domain names and accept requests to add suffixes for almost any word in any language. The organization has said the expansion will provide companies with new ways to reach customers.

Higher Costs

Under Icann’s plan, the group will accept applications for new domains from Jan. 12 through April 12 of 2012. Applications will cost an estimated $185,000 per domain name, according to a fact sheet posted on Icann’s website.

The Web-suffix expansion has been attacked by trade groups representing large corporations and advertisers that say the change offers few benefits while increasing businesses’ costs. For retailers, the changes raise a wide range of legal issues and brand identity concerns, Duncan said.

“To adequately plan, businesses need some level of clarity,” Duncan said. “To date, that guidance is lacking” from Icann.

Brad White, a Washington-based spokesman for Icann, didn’t immediately respond to an e-mail and telephone message requesting comment on the letter.

The proliferation of new domain names will confuse consumers and force companies to spend hundreds of thousands of dollars to defensively register domains to protect their brands, Bob Liodice, president of the Association of National Advertisers, wrote in an Aug. 4 letter to Icann.

“While no doubt some industry sectors will make money, most will suffer enormous costs that far outweigh the gains,” wrote Liodice, whose group represents more than 400 companies including Apple Inc. and General Motors Co.

--Editors: Steve Geimann, Andrea Snyder

To contact the reporters on this story: Eric Engleman in Washington at eengleman1@bloomberg.net; Michael Shepard in Washington at mshepard7@bloomberg.net

To contact the editor responsible for this story: Michael Shepard at mshepard7@bloomberg.net


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