At-Large Phase II Assessment of the Competitive Effects Associated with the New gTLD Program Workspace

Purpose: The Phase II Assessment compares changes in the domain name marketplace since the publication of the Phase I Assessment in September 2015. ICANN is seeking public comment on the findings and conclusions to be shared with both Analysis Group and the Competition, Consumer Trust and Consumer Choice Review Team, which is using the study in its review of the New gTLD Program’s impact on competition in the domain name marketplace.

Current Status: The Phase II Assessment has been published to provide the community with data to compare changes in the marketplace over the course of one year, since the publication of the Phase 1 study in September 2015. Since the study’s publication, the Competition, Consumer Trust and Consumer Choice Review Team (CCT-RT) has begun its analysis of the New gTLD Program’s impact on competition in the domain name marketplace and has utilized the Phase I findings in its analysis. CCT-RT members also provided feedback to Analysis Group on the Phase I study, as well as suggestions for the Phase II study.

Next Steps: Public comment received on this study will be shared with both Analysis Group and the CCT-RT. The CCT-RT will consider public comments on the study’s findings as it reaches its own findings and recommendations regarding the New gTLD Program’s impact on competition in the domain name marketplace.

The Phase II Assessment of the Competitive Effects Associated with the New gTLD Program[PDF, 1 MB] measures competition in the domain name marketplace in the one year since the Phase I findings were published in September 2015. The study, commissioned by ICANN and conducted by Analysis Group, will be provided to the Competition, Consumer Trust and Consumer Choice Review Team (CCT-RT) to aid in its analysis.

Analysis Group reports several key findings:

Domain Name Prices

• Average and median retail prices for registrations of legacy and new gTLDs have declined.
• Retail mark-ups over wholesale prices have generally declined.
• The overall wholesale price level of legacy gTLDs is lower than that of new gTLDs.
• Wholesale price levels for legacy and new gTLDs remained stable from Phase I to Phase II. The presence of price caps on legacy TLDs may help to explain the absence of changes in legacy TLD wholesale prices.

Domain Name Registrations

• New gTLD registrations account for 9 percent of all gTLD registrations as of March 2016, an aggregate of 16,570,035 registrations. This is an increase since November 2014, when new gTLD registrations accounted for approximately 2 percent of all gTLD registrations, an aggregate of 3,483,064.
• The New gTLD Program has had no apparent effect on legacy gTLD registrations. However, the introduction of regional new gTLDs (e.g., .nyc and .berlin) is typically coupled with a decline in new gTLD and legacy registrations in that region.
• The shares of domain name registrations across registries, and across registrars, continue to be more dispersed for new gTLDs compared with legacy gTLDs.
• The share of registrations held by the top four, top eight, and top fifteen registries and registrars by domain name registrations has declined.
• There is movement in the largest 15 registries and registrars as ranked by total domain registrations, with some registries or registrars who were not among the largest 15 in Phase I being ranked among the largest 15 in Phase II.
•  The largest percentage growth in the number of registry operators occurred in the Asian Pacific and European regions.

This public comment proceeding is intended to solicit the public’s input on both Analysis Group’s methodology and findings, as well as provide input to the CCT-RT as it considers these findings in its analysis of the New gTLD Program’s impact on competition in the domain name marketplace.

The study was commissioned in response to metrics recommended by the Implementation Advisory Group on Competition, Consumer Trust and Consumer Choice, which preceded the review team’s formation, and which the ICANN Board adopted for inclusion in review, as mandated by the Affirmation of Commitments. To prepare for this review, ICANN's stakeholder community recommended a list of metrics and definitions to help inform consideration of these areas. The recommendations from the Implementation Advisory Group on Competition, Consumer Choice and Consumer Trust (IAG-CCT) included 66 metrics, of which a subset of three were identified as best being measured via a study of competition in the domain name marketplace before and after the expansion of the DNS.

• Phase II Assessment of the Competitive Effects Associated with the New gTLD Program[PDF, 1 MB]
• Phase I Assessment of the Competitive Effects Associated with the New gTLD Program[PDF, 966 KB]
• Economic Study FAQ
• Competition, Consumer Trust and Consumer Choice Review Team