The problem comes down to the fact that anyone can object to a TLD that has special significance beyond being a trademark, and far more objections have been filed over the nearly 2,000 applications for the new TLDs. In .amazon's case, there's a South American river with the same name (what a coincidence, huh?)—and several South American countries believe that's a good reason for Amazon not to get control of .amazon.
No one seems to have expected that kind of backlash, but that's hardly the first thing in this process that ICANN didn't mention to the retailers (and many other entities) that shelled out $185,000 for each application. If all 1,930 applications were successful, ICANN stood to rake in more than more than $350 million. Any doubts as to why ICANN wanted to sell you your domain name all over again should end there.
What was expected was that some much-coveted vanity domains would get multiple applicants. That was supposed to be settled by either private negotiations or an auction process in which ICANN would collect the high bid, take out the $185,000 fee and then give the remainder to charity. Instead, some applicants are holding private auctions in which there's no charity donation and no transparency as to how the winner came out on top.
It turns out there's a bigger problem: objections from all those people who didn't bid of a TLD, including everything from private individuals to ICANN's own Government Advisory Committee (GAC). The flood of objections has been so great that in April ICANN said the objections would delay the rollout of the first new TLDs from June to August. Now observers think the organization will miss the August target too.
Some of those objections carry more weight than others. For example, the ICANN GAC said last month that it was worried about certain proposed TLDs that have religious or geographical meaning. Result: The GAC advised the ICANN board to hold off on Amazon's registrations for .amazon, as well as the Chinese and Japanese versions of the name.
The GAC also listed about 180 proposed vanity domains, including retail-related TLDs such as .book, .toys and .sale, that it said should have special restrictions. And it listed 61 TLDs that it said are generic even though the applicants want complete control of the domains—including .grocery, which Walmart and Safeway (NYSE:SWY) are fighting over.
In addition, the GAC recommended that the ICANN board rethink the idea of letting different applicants have singular and plural versions of the same TLD—in other words, OKing both .book and .books. For some reason, ICANN's board still thinks that won't cause confusion.
Last Thursday (May 16), the Association of National Advertisers (ANA) added its objections to the mix, arguing that ICANN shouldn't be approving any new TLDs until it has made sure there are sufficient protections in place for trademarks and brand names, and that registrars are accredited for that kind of protection before any of the new TLDs are approved. (ANA also pointed out that allowing both .book and .books was a very bad idea.)
A lot of what the GAC, the ANA and other objectors are saying sounds like just common sense. But for some reason, no one at ICANN thought there would be a problem with .book, .toys, .flowers, .food, .grocery, .shop or .store being tied up for exclusive use by one retailer (and those are just the most obviously retail-oriented TLDs that the applicants want exclusive use for).
In practical terms, that means the major retailers who committed hundreds of thousands (or in some cases tens of millions) of dollars to play the vanity domain game—including Walmart, Safeway, Amazon, Macy's (NYSE:M), Gap (NYSE:GPS), TJX (NYSE:TJX), Home Depot (NYSE:HD), Tiffany (NYSE:TIF), Apple (NASDAQ:AAPL), Target (NYSE:TGT), JCPenney (NYSE:JCP), Best Buy (NYSE:BBY), McDonald's (NYSE:MCD), Staples (NASDAQ:SPLS) and Polo (NYSE:RL)—are now waiting indefinitely to find out how the rules will be changed.