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Thursday, February 02, 2006


Sedo Proposal for One-Letter .Com Domains

Sedo has posted this proposal:

Situation Analysis
According to recent proposals, ICANN is considering making one-letter .com domains, such as O.com, available to the public. These domain names would be extremely valuable to any potential owner due to their branding potential and the simple fact that they are extremely memorable. Most experts estimate these domain names could be worth up to six or seven-figures each.

Concurrently, ICANN is proposing an increase to its imposed fees per domain name registered which would amount to over $15 million in 2006. Critics argue that such fee increases would effectively act as a tax on the Internet and should be subject to a budgetary review process involving the broader Internet community.

Typically, new domain names are distributed on a first-come, first-serve basis. However, this is not a truly democratic process as it favors those who have computer programs written to monitor and immediately register newly available domains. Sedo believes that these high-value domain names should not be offered to only large corporations or those with a technology advantage, but to any global citizen that is interested in purchasing them at fair market value.

A Fair and Equitable Solution
Sedo proposes that the names be auctioned in an all-inclusive, transparent online process to the highest bidder. This process would allow anyone to have a true opportunity to purchase these rare domain names and further ICANN’s goals of "preserving the operational stability of the Internet;" ... "promoting competition;" ... "achieving broad representation of global Internet communities;" ... "developing policy appropriate to its mission through bottom-up, consensus-based processes." A transparent auction is the only way to ensure the process is completely fair and unbiased.

Furthermore, Sedo proposes that the proceeds from the auction go directly to bolster the ICANN budget, offsetting the proposed new ICANN fees. For example, Sedo estimates that the sale of the remaining 23 one-letter .com names would generate approximately $2 to $5 million. The auction would serve as an ideal test-case to determine whether the practice can be used in similar future situations.

While ICANN believes it has cause to seek budgetary increases to further its global projects, mandating per-domain name fees that ultimately get passed on to Internet users is not an effective or fair means to an end. Whenever possible, ICANN must avoid adding an extra "tax" for usage of domain names to remain an independent body. In light of the resurgence of the domain name market in recent years, ICANN should instead better leverage the very valuable assets it controls, such as one letter .com domain names, by judiciously issuing high-value domain name assets to generate funds for the non-profit organization.

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