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 Phase 1 Assessment of the Competitive Effects Associated with the New gTLD ProgramNo Statementn/an/an/an/an/an/an/a

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  1. Analysis by Maureen Hilyard


    Summary of the report on the Phase 1 Assessment of the Competitive Effects Associated with the New gTLD Programme.


    The purpose of this initial Phase 1 Assessment report was to establish a baseline description of metrics that can be used to assess the competitive conditions in the marketplace for domain names.  A subsequent Phase II Assessment will provide a deeper analysis of the competitive effects associated with the new gTLD programme.

    The report compared the progress of the 428 new gTLDs with the 22 legacy TLDs in existence, 18 months following the date of the delegation of the first new gTLDs. In brief it was found that legacy TLDs, despite having historical restrictions on pricing whereas new gTLDs don’t, still account for the majority of domain names. Some operators are marketing new gTLDs on the assumption that they will be valued more than legacy TLDs so that there is a greater dispersion of their wholesale prices. The main competition comes about due to the add-on services provided by registrars such as email and web-hosting as well as the cost of registering a domain name. There is quite some variation among registrars as to the cost of these services. 

    While the expansion of new gTLDS has created a market with hundreds of TLD options for consumers, these TLDs vary substantially in priced. Analyses of the findings revealed:

    • The majority of domain name registrations are currently accounted for by legacy TLDs.
    • The top 4 legacy registries were responsible for 97.3% of legacy registrations whereas registration shares for new gTLDs are more dispersed
    • Regional distribution of new gTLDs show a greater number of registries in Europe, North America and Asia Pacific (65, 46 and 26) as opposed to Latin America (4) and Africa (2).
    • All gTLDs must have a sunrise period which enables trademark holders time to register domain names in the new gTLD prior to others, but a concern has been raised about some registries exploiting trademark holders so that prices of new gTLDs  can vary during this sunrise period from $0 to nearly $3000.
    • Historical pricing restricts registration of legacy TLDs from $5 to $100.
    • Wholesale and retail prices show a similar trend for this wide range of pricing among gTLDs but a full analysis of why price dispersion exists was not available in this study.
    • Registrars compete not only on the prices of the TLDs offered but also on the non-product dimensions such as delivery, customer service, customer loyalty programmes and other factors, for example, website services.  Further information from registrars is required to assess the full value of these add-on services.
    • Registrars with higher prices have higher registration volumes.

    Comment:  While this report gives an interesting initial overview of the first 18 months of the competitive environment of the new gTLD programme, a further year or two will give a better indication of registration trends and prices especially with regards to the historical restriction on pricing of legacy TLDs, and to further assess public demand and its impact on pricing.