ICANN has come out with the fifth version of the New gTLD Applicant Guidebook (DAGv5), which it intends to be the final version. Unsurprisingly, this version does little to clear up residual confusion or quell lingering concerns from trademark owners or other parties.

I should start off by pointing out that I am not against new gTLDs as a whole – I think they have the potential to offer many interesting and useful new capabilities for the domain name space. Rather, I am against the way ICANN has gone about the process of implementing new gTLDs, beginning with the initial motivation for the rollout (that it was simply “always the plan”) right up through this latest version of the Guidebook. Despite all its show of undertaking multiple revisions that supposedly incorporate community feedback, ICANN has created a program that does not serve the best interests of its constituents and will ultimately result in chaos.

One of the biggest issues, especially for trademark owners, is not that the new gTLDs themselves will be cybersquatted (i.e., that malicious actors will register their .TRADEMARK gTLDs), but that cybersquatting will be rampant once these new gTLDs are up and running. On the surface, it appears that ICANN has taken steps to prevent unsavory entities from operating new gTLD registries: a provision in the DAGv5 states that applicants who have been engaged in cybersquatting three or more times, with one instance occurring in the last year, as defined by the UDRP, ACPA or other such legislation, will be disqualified. As many other bloggers have pointed out, this seems to leave a huge loophole for certain parties like domain name registrars who engage in cybersquatting via affiliated shell companies.

The fact that registrars will be permitted to apply for new gTLDs is in itself a somewhat contentious point. One of the main goals of the new gTLD program is to increase competition in the domain name space. Allowing existing registrars to operate new gTLD registries seems to contradict this primary objective, unless the goal of increasing competition is to increase competition for dominant registries such as VeriSign, the .COM registry. However, I know of at least 13 reasons to remain highly skeptical of the potential to do so: .MUSEUM, .COOP, .BIZ, .TRAVEL, .AERO, .NAME, .INFO, .JOBS, .MOBI, .CAT, .ASIA, .PRO, .EU, .NeedISayMore?

I acknowledge that there is a demand for new gTLDs. John Abell over at Wired makes a great case for a .MOVIE gTLD. ICANN could have handled this process so much differently by opting to introduce a few useful new gTLDs at a time, instead of opening the process up to a complete free-for-all. And that process isn’t even universally uniform – while approved applicants will have to abide by a registry agreement with ICANN, they can change the wording of the registry agreement as much as they want, as long as the ICANN Board approves of the changes.

Some of the new registries that will emerge from the first round of applications for new gTLDs will inevitably fail. The adoption of new domain name extensions will require a significant shift, and certain gTLDs will simply not catch on, meaning not enough domain names will be register for the operating registries to stay solvent. What will happen then? If past gTLDs are any indication, ICANN will step in and allow them to change the rules of their registry agreement in order to temporarily keep them from going belly-up, like it did with .NAME.

From the beginning, ICANN has adopted a free-market attitude as the impetus for new gTLDs – that there exists a demand for them (demand in the ICANN community certainly is not the same as demand across the global Internet community), and that applicants will respond to this demand accordingly. But the entire processed seems to contradict that attitude, and will only lead to confusion and chaos.