DSTI/ICCP/TISP(2004)2/FINAL 

for example, to apply for a gTLD but not operate a registry. In fact, for some entities, the value of a 

specific string, for their own use or as a platform for a service, may far outweigh whatever revenue might 

be derived from operating it as a registry. But such outcomes may not meet ICANN's objectives. The main 

point is that whichever path ICANN chooses some general principles, guiding string selection, will need to 

be in operation. At the same time how much flexibility ICANN has in implementing these principles will 

be closely allied to the question of scarcity.   

Is the gTLD resource scarce? 

In the economic sense scarcity can be said to exist where needs and wants exceed the resources 

available to meet them. The radio spectrum is often cited as being a scarce resource. One reason for this is 

that spectrum has physical properties which make its availability finite. In relation to TLDs there are 

several potential limitations which can lead to a determination of scarcity.   

The question of the number of TLDs that can be safely added is a decision for ICANN. Unlike the 

radio spectrum, in the opinion of a number of experts there may be little or no technological barriers to the 

introduction of a very large number of TLDs. However, even if a technical assessment concluded that an 

almost infinite number of TLDs could be safely added, there are other considerations. These might include, 

for example, assessing the risk of failed registries, if a large number of gTLDs were introduced, prior to 

ensuring safeguards for continuity of service. Another consideration might be the level of support for the 

creation of new gTLDs among the Internet community. Consideration also needs to be given to the impact 

a large number of new gTLDs would have on the management of TLD delegations by the IANA. IANA's 

management of delegations is a resource intensive process, and generates a cost to ICANN, which needs to 

be met by the Internet community. 

It is possible that the number of applicants to operate a new gTLD may not exceed the number of new 

TLDs ICANN feels can be added. If this proved true, and an open ended process for the creation of new 

gTLDs had the support of the Internet community, there would, in fact, not be any scarcity. In such 

circumstances the only procedure would involve qualification to operate a registry and new gTLDs could 

be allocated on demand. On the other hand, if there was opposition among the Internet community to the 

allocation of gTLDs on demand, ICANN would have to make choices and the resource could be said to be 

scarce. One group which might oppose an open ended process might be business users if they felt 

compelled to register their trademark(s) in every new domain. Some Internet users might also be against 

new names if the complexity of the DNS increased. Some applicants, on the other hand, promise that their 

proposed names will simplify navigation over the Internet or with related networks. 

The second consideration, on the question of scarcity, is that each TLD needs to be unique and can 

only be operated by one registry. Accordingly, if multiple entities wish to act as a registry for the same 

TLD, the resource can be regarded as being scarce and a choice needs to be exercised. Some may, of 

course, regard alternative new gTLDs as substitutable. In other words if two entities wanted 

.example

 one 

may be just as satisfied with 

.instance

. This does not, however, remove the need for a decision between 

candidates if two or more entities have a preference for the same gTLD. In the first round of new gTLDs 

four entities individually proposed 

.kids 

and several other names were proposed by multiple applicants.  

In the latest round of sTLDs two different entities proposed to operate a registry with the name 

.tel

. 

Foreseeing that some groups may be willing to accept a substitute name ICANN's procedure enabled 

applicants to nominate a second and third choice. In the case of 

.tel

, neither applicant chose to nominate a 

second or third choice. If during ICANN's comparative selection procedure both applicants proved to be 

qualified, and do not nominate an alternative name, then a choice must be exercised. In this situation the 

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