A top level domain is a core part of how the Internet organizes and parses the names of websites. The most common, of course, is .com, but other TLDs are .net, .org and country domains like .CO or .UK. ICANN's new gTLDs will allow companies, governments and other organizations to register unique strings. For instance, are we about to enter the era of .pepsi? See below for everything you need to know about the new domain name system.

ICANN believes that the new gTLD system will be a boon for the Internet economy. Startups, business, entrepreneurs and governments will all be allowed to own and manage their own little portion of the Internet, if they so choose.

Here is ICANN's reasoning:

"One of ICANN's key commitments is to promote competition in the domain name market while ensuring Internet security and stability. New generic Top-Level Domains (gTLDs) help achieve that commitment by paving the way for increased consumer choice by facilitating competition among registry service providers. Soon entrepreneurs, businesses, governments and communities around the world will be able to apply to operate a Top-Level Domain registry of their own choosing."

Many people think that the new gTLD system will start a gold rush for new domains. To a certain extent this is true. A lot of companies will be bidding big money to retain their trademarks as a gTLD. ICANN will not hold a trademarked name for a specific gTLD just because that company owns the trademark. On the other hand, owning a gTLD is a big organizational and financial responsibility that will be prohibitive for many brands and enterprises.

For example, the base financial commitment for entry for a gTLD is $185,000. If you thought you would waltz in and grab your last name as a TLD, you are probably not going to be able to. It is unlikely that we are going to start seeing individuals with personal URLs like "joe.smith." In this case, Mr. Smith would need to pay for the gTLD and prove to ICANN that he and his organization can support the strict requirements of owning a gTLD.

"Please note that applying for a new gTLD is not the same as buying a domain name. An applicant for a new gTLD is, in fact, applying to create and operate a registry business supporting the Internet's domain name system. This involves a number of significant responsibilities, as the operator of a new gTLD is running a piece of visible Internet infrastructure."

The financial commitment is more than just $185,000 that serves as an evaluation fee. A deposit of $5,000 is required with the application. As a gTLD owner, an entity is required to be the keeper of that domain. That means the company will, in one way or another, be responsible for every other URL that pops up using the new name. In the Smith scenario, whoever owns the Smith gTLD would be responsible for the organization, security and infrastructure of the domain name. After a domain is approved, there is a $6,250 monthly fee and a $0.25 per transaction fee after the first 50,000 transactions in a calendar year.

ICANN does not know how many applications it will receive in this first round of new gTLDs. Entities can apply for domains from today (Jan. 12) until April 12, 2012. This round will contain a maximum of 500 new gTLDs applications and subsequent batches will be limited to 400.

The application and review process is extensive. We are not going to see new gTLDs crop up tomorrow or even next week or next month. The review process for each application can take anywhere between nine and 20 months.

"There are several stages that an application may pass through prior to a final determination being rendered. Those stages are Administrative Check, Initial Evaluation, Extended Evaluation, String Contention, Dispute Resolution and Pre-delegation. The shortest path for a successful application is to pass Administrative Check (lasting 2 months), Initial Evaluation (lasting 5 months) and then move to Pre-delegation (lasting approximately 2 months) without any Objections filed or String Contention concerns. In this case the evaluation process could take as little as 9 months to complete. On the other hand if an application does not pass Initial Evaluation and elects Extended Evaluation and/or is in the Dispute Resolution or String Contention stages then the evaluation process could take up to 20 months to complete (or longer in the event that unforeseen circumstances arise)."

New applications will be assessed by independent third-party expert panels.

Next Page: What gTLDs will look like and other issues and concerns . . .

What Will New gTLDs Look Like?

New domains will be required to be at least three characters in length and contain only alphabetic characters from A to Z. Hence, no domains will be issued that have numbers, like .c0m or .1234.

Country codes are not included in this sale of gTLDs and are a completely separate part of ICANN's TLD standards. Part of the three letter requirement is to protect current and future country level domains like .CO (Colombia) or .UK (United Kingdom).

Not included in ICANN's gTLDs are second and third string domain names. Consider maps.google.com. In this case, the TLD is .com while the second string is .google and the third .maps. Operators of new gTLDs will be the ones to validate any second and third string domain names.

Multiple languages will be supported in the new gTLD system, and non-Latin writing systems, such as the Arabic alphabet and Chinese characters. When an applicant applies for a gTLD, it will not own the translation of the domain. Hence, if you are applying for .thing, you will not also receive the Spanish .cosa or the equivalent in Arabic letters or Chinese characters.

There are two options for new owners of gTLDs to operate them: open or closed. One will be that a company or a brand owns its own name, Coca Cola for instance, and keeps its second and third string URLs within the company. Like, news.coke or offers.coke. Coca Cola would not sell URLs to outside entities and maintain the entire gTLD in the corporate environment. This would be a closed example.

An open example would be if some entity purchases the aforementioned .smith gTLD. The organization could then start selling DNS registrations to individuals, like joe.smith or betty.smith. This is where the true money will be made in the new ICANN infrastructure.

Owners of new gTLDs will likely not be able to turn around and sell the domain. The extensive application and review process contains many layers of objections, comments and evaluation on how well an organization can conduct the domain. So, buying .sex and thinking that it can be flipped for millions of dollars later would not be a feasible model. Buying .sex and selling registrations to the domain would function much more effectively in the new system.

There are two types of applications: standard and community. A community could function as a group of like-minded people working towards a common goal with a reasonable shared infrastructure. A community could be, say, a large group of Silicon Valley startups that all want to use the gTLD .startup. The companies could create a partnership with a central body that would support the gTLD. A standard application would be to a company or an organization that merits consideration.

An organization cannot, however, apply for a gTLD on anothers behalf. If you buy a gTLD, it is yours. You cannot turn around and flip it to GoDaddy or Namecheap for management. On the other hand, there is nothing stopping the domain registrars from applying for gTLDs on their own.

"ICANN will only enter into an agreement with the applicant. There's no provision for Party X to enter a registry agreement with ICANN designating Party Y as the registry operator.

Other Issues

ICANN makes it a point to say that "no, gTLDs are not going to break the Internet."

"The increase in number of gTLDs into the root is not expected to affect the way the Internet operates, but it will, for example, potentially change the way people find information on the Internet or how businesses plan and structure their online presence."

The application and review process, not to mention the cost of supporting a gTLD, is prohibitive to cybersquatters. Some companies may buy their .brand as a defensive strategy but the fact of the matter is that it will be extremely difficult for squatters to get through the process without a plan of action and support. Some companies that can support might just buy the name so it will not have to deal with headaches later.

Forrester's Jeff Ernst has this to say on companies making decisions of whether or not to apply for a gTLD:

"Keep in mind that this is much bigger than just moving your brand from the left to the right of the dot. I'm not a big fan of submitting a defensive registration. Get some of your smartest people from marketing, finance, legal, distribution, service, and strategy together. Examine some of the biggest challenges you have today in any of those areas. Think about your company's strategy and priorities over the next 4 years. See if you can find a strategic application of a registry that can differentiate your company, contribute to growth plans, or help with one or more of your biggest challenges. And if so, go forward with a strategic application. If not, read my latest reports and understand the risks and actions you should take when you stay on the sidelines."

So we, for example, are not worried in the slightest about some organization buy the .writeweb gTLD and blackmailing us to sign up for read.writeweb. There are bigger fish in the sea.

From a security perspective, it is not likely that spammers will buy their own domains and use them as a launching point for spam attacks. As Blue Coat's Chris Larsen pointed out to me recently, it is fairly easy to block spam and malware once you know where it is coming from. So, if spam is coming primarily from a gTLD owned by a botnet operator, it would be simple to just block that gTLD. Again, given the cost and review process, that is not an efficient use of funds for malware makers.

For additional information, see ICANN's FAQ and the Application Guidebook.

What are the concerns regarding the new ICANN gTLD ecosystem? It will definitely dilute the TLD infrastructure and fragment how the Web is organized. Is that a bad thing though? ICANN is a not-for-profit organization so it is not motivated by making money hand over fist. How excess money from the application process will be used will be put to a vote. Overall, is this a positive or negative move for the Web? Let us know in the comments.

Generic Top-Level Domains (gTLDs) are essentially specific destinations for brands. Companies will be able to buy their brand and attach it to a URL. So instead of seeing Pepsi.com, the soda manufacturer could have Pepsi.soda or something similar. It will not be cheap to get your own TLD, with an $185,000 application fee and $25,000 a year to run the registry. Yet, some Internet advocates are crying foul, saying that gTLDs will create new headaches in cybersquatting, trademark issues and excessive spam.

The price tag for a gTLD may cut down on the overall instances of cybersquatting, except for the most affluent spam networks and domain registries. ICANN will be accepting applications for new top-level domains between January 12 and April 12, 2012.

ICANN is providing safeguards to ward off mass cybersquatting. The Applicant Guidebook has gone through seven significant revisions since 2008 that incorporated 1,000 or so comments from the public. The evaluation procedures provide for background screening of pre-applicants that measure business history and look for history of cybersquatting. It will conduct string-similarity reviews to determine if the domain is like anything else currently on the Internet and assess the potential security risks of creating a new TLD.

There are currently 22 TLDs that range from the original .com to .org and .net. ICANN's final approval of the gTLDs will certainly make that number skyrocket but the question is what the final affect on the Internet will be. Are gTLDs the first salvo in a new Web land rush or will it be a source of new innovation for the next decade of Internet development?

The Biggest Thing to Happen to the Internet Since .Com?

Forrester analyst Jeff Ernst believes this is one of the biggest things to happen to the Internet.

"I think this is probably the biggest change to the the Internet since we have had it," Ernst said over the phone. "A lot of the biggest brands are figuring out the requirements. It makes a lot of sense as a brand owner to have as much control over your brand as possible. Why be stuck behind .com when you can own your own primary domain and control the secondary domains you issue within your domain?"

Ernst points out that there are stringent technical guidelines to obtaining a gTLDs and the ability to administer it. There is a nine-month application process and brands must have the ability to effectively administer secondary domains. This could increase corporate IT spending as brands feel the need to get their own TLDs but then must adhere to ICANN's policies.

"Many of the biggest brands are planning to apply for their .brand TLD, but many marketing leaders I've talked with look at this as a nuisance and are skeptical about whether Internet users will embrace them," Ernst said in a blog post.

Lauren Weinstein, the co-founder of People for Internet Responsibility lambasts ICANN in a blog post, calling ICANN and the domain registries the "Domain Industrial Complex" and calling shame to all that helped approve this decision.

"Has the horrific economic saga of the last few years taught us nothing?" Weinstein wrote. "Is there no sense of ethical or moral outrage among those persons who are truly concerned about creating the best possible future for the entire Internet and Internet community, not just for a comparatively few "domain exploitation" tycoons and would-be tycoons?"

ICANN has just issued a statement, saying that it was not responsible for any part of the government actions. "As we have said many times, ICANN was not a party to those actions" by the U.S. Immigation and Customs Enforcement agency (ICE), "nor was it a target of them."

"ICANN does not take down domain names," the ICANN statement says, "we have no technical or legal authority to do that. We have no involvement in the takedown of any website, which is an issue of national authority. ICANN knew nothing about this enforcement action until after the fact. And with good reason, since we are not a law enforcement entity or an agent of the U.S. or any other government. ICANN is the non-profit coordinator of the Internet's global domain name system and is not involved in website content in any way."

While not an official agency, ICANN was created in part by a mandate from the U.S. government. As a result - and due to questions about transparency and accountability - some have viewed the organization's "neutrality" with skepticism.

ICANN's announcement comes the same day as an Obama Administration has promised more crackdowns on websites that violate copyright laws.

The DNS, or Domain Name System, is one of the foundational elements of the Internet, responsible for translating the numbers in IP addresses to the more human-friendly names. And ICANN, the Internet Corporation for Assigned Names and Numbers, is a nonprofit organization tasked with managing both the IPv4 and IPv6 Internet Protocol address spaces, maintaining the registries of IP identifiers, and managing top-level domain names.

A Distributed Alternative to the Domain Name System

Arguing that "we want the internet to be uncensored," Sunde has formed a group to work on the project, a DNS that would not utilize a centralized root but would instead take advantage of peer-to-peer technology. He writes, "By using existing technology for de-centralisation together with already having a crew with skilled programmers, communicators and network specialists, an alternative system is not far away. We're not going to re-invent the wheel, we're going to build on existing technology as much as possible."

The technology may exist to make a BitTorrent-based alternative possible, but such a system would face a massive uphill battle to provide a viable alternative - in terms of delivering speed and performance, but also in terms of gaining widespread adoption. And as Ars Technica notes, one of the biggest problems will be around the ownership of domain names. "The stakes are high," writes Iljitsch van Beijnum, "even a small fraction of the traffic of a popular site, or even just an interesting search term, can be worth a lot of money. It's hard to imagine that with such high stakes there wouldn't be any abuse of such an open system, or at the very least, widely diverging points of view of what's best."

Despite these obstacles, Sunde's proposal has been met enthusiastically in some circles, which considering the intersection of politics and web technologies over this past week, is hardly a surprise.

As the BBC reports today, however, the .xxx domain can make it even easier to block adult content where it is not allowed or desired. The article quotes Stuart Lawley, chairman of ICM Registry, as saying that this decision is "great news for those that wish to consume, or avoid, adult content." The creation of a .xxx domain makes it quite simple for places like public libraries and schools to enforce a blanket ban of the domain. To some degree, the opposition of conservative groups seems surprising, as the .xxx domain would also make it easier to block such content from reaching the family computer as well.

On the other end of the spectrum, even many members of the adult industry have been weary of the introduction of a porn-only domain, citing fears that it would be made mandatory. Sex educator and author Violet Blue called much of this "hysteria and hyperbole" suggesting that instead of getting all worked up over the new domain, "you'd think someone with a big porn business would start creating a set of best practices to allay fears and make guidelines that decision-makers could refer to."

Already, there are more than 110,000 pre-reservations for .xxx domains and the first ones are scheduled to go live early in 2011.

As it currently stands, a site in Saudi Arabia must use ".sa" as its root. Now it can use the Arabic equivalent and leave off translating. Egypt, United Arab Emirates and Saudi Arabia are the first to take advantage of this.

Now, however, 21 countries have made the request that the Internet recognize their names in 11 different languages, according to an ICANN announcement.

The process to get native-language functionality, called "Fast Track" has three steps.

1. Preparation (by the requester in the country / territory). Community consensus is built for which IDN ccTLD to apply for, how it is run, and which organization will be running it, along with preparing and gathering all the required supporting documentation.
2. String Evaluation: incoming requests to ICANN in accordance with the criteria described above: the technical and linguistic requirements for the IDN ccTLD string(s). Applications are received through an online system available together with additional material supporting the process at: http://www.icann.org/en/topics/idn/fast-track/
3. String Delegation: requests successfully meeting string evaluation criteria are eligible to apply for delegation following the same ICANN IANA process as is used for ASCII based ccTLDs. String delegation requests are submitted to IANA root zone management.

The US used to have close oversight of ICANN, but this new agreement loosens the ties between ICANN and the US government. The last agreement between the US and ICANN was set to expire on Thursday. The agreement between the US and the Internet Assigned Numbers Authority (IANA), the organization that oversees the allocation of numerical IP addresses, won't expire until 2011 and is not affected by this new agreement.

US politics have often influenced ICANN decisions. When ICANN proposed a .xxx top-level domain for sexually explicit sites in 2005, for example, a lot of conservative advocacy groups like the American Family Association and the Family Research Council lobbied the US government to block this proposal and the plans were never realized.

The Wall Street Journal reports that the Internet Corporation for Assigned Names and Numbers (ICANN) is considering sweeping changes to the way top-level domains (TLDs) are assigned. Under this newly proposed plan, any organization could apply for any top-level domain (ICANN calls these new domain names generic TLDs). Google, for example, could get a .google domain, or Coke products might be found under .coke. If accepted, this would be the most significant modification of the TLD naming system yet.

Update: ICANN just approved these changes.

The new rule proposes a $50.000 to $100.000 fee for the registration of one of these new domain names, effectively restricting their availability to larger organizations.

This new plan would have a number of ramifications, but maybe most importantly, the domain name speculation business is going to be changed forever. Most interesting and generic .com names have long been taken. The new system, however, will bring an abundance of new domains, which might drive down prices for .com domains. This is surely going to upset a lot of speculators, as Chris Morrison also points out on VentureBeat. Right now, speculators can hoard interesting domain names and auction them off for millions of dollars (business.com sold for around $350 million).

Will Consumers Care?

In the past, ICANN slowly added a number of new top-level domains such as .info, .mobi, .travel, .coop, or .asia. None of these gained a lot of mind-share among consumers and can often be bought at a discount because demand for them is so low. For the average Internet user, .com is the only domain on the Internet, with only .edu, .gov, .org, and .net having some traction as well. Not coincidentally, these (together with .mil) were also the first TLDs available on the net.

The question is if these generic TLDs will be more successful. If consumers didn't adapt to .info, will they adapt to .coke? The .com domain has become so ingrained in our Internet culture that it has practically become synonymous with domain names and the Internet as a whole.

While some web services like del.icio.us were able to attract a considerable amount of users with their idiosyncratic domains, even del.icio.us finally bought delicious.com when it started attracting more mainstream users.

It looks like these questions might get answered pretty soon. Judging from ICANN's timeline for the introduction of generic TLDs, we could start seeing them as early as Q2 of 2009.