Why Asians Should Join The Domain-Name Fray


Technology Journal Asia
February 28, 2000

by Izumi Aizu

A good e-business needs a simple, easy-to-remember domain name, or Web-site address. But what if all of your top choices for names are already taken? Or what if you find that someone else is using your trademark on the Internet? Can you ask for its return? Can you buy it, or go to the courts for help?

These questions have become increasingly important as the Internet becomes an indispensable place and way to do business. Last year, the domain name business.com was sold for $7.5 million in the U.S. And some of Hong Kong's most powerful business leaders recently paid $2.5 million for tom.com, the name of their new Internet venture. These cases indicate just how precious domain names can be.

Why are dot-coms becoming so expensive? Because a dot-com is a scarce global commodity, currently the only available generic way to name and identify a commercial Web site without indicating any particular country code (such as .hk for Hong Kong).

Recognizing the increased value of dot-com domain names, speculators started to register famous names in bulk in the mid-90s and then attempted to sell them to the trademark holders or others. Trademark holders who sued successfully to counter these cyber-squatters have included the New York Yankees, Morgan Stanley Dean Witter & Co., and Marks & Spencer PLC.

While most courts have ruled in favor of the large companies who own well-known trademarks, some unknown, yet legitimate small companies have won court battles over their rights to use the domain names they registered. The large corporations that lost include toy maker Hasbro Inc. and Avery Dennison Corp., the office supply company.

These conflicts point to the importance of the entities that control the registration and management of domain names world-wide. Once, only the most dedicated Internet aficionados paid close attention to who managed the registration of domain names. But since the mid-90s, heated debates have erupted among various Internet stakeholders over the way these increasingly scarce and valuable assets are handed out and managed. This is essentially a war fought over rights to new lands in cyberspace, only the territory that's up for grabs is name space. Central to these battles are the questions of who should be in charge of managing the domain names and where that authority comes from.

Today U.S. multinationals such as Microsoft Corp., America Online Inc., AT&T Corp. and International Business Machines Corp. seem to understand what is at stake and have become keen participants. But Asian companies have been slow to define a role for themselves. Similarly, while the U.S. and European Union governments are actively involved, most Asian governments are passive at best.

As the Secretary General of the Asia & Pacific Internet Association, a trade association for the region's Internet-related service industry, I have urged many Asian business and government leaders to make sure their voices are heard on these topics. The organization has also struggled to convince the Americans who currently dominate these international boards that they should provide more seats at the table for Asian countries and developing nations in the world.

Why should businesses and governments in Asia care about such seemingly arcane battles? Foremost, because this turf war will help define the rules of engagement of cyberspace.

Decisions made on the new ways of managing domain names will definitely create real business costs and opportunities. For example, earlier last year, AOL became one of the first companies to win the right to register domain names in a newly deregulated environment. It wanted to enter the registration business of dot-com domains so that it could collect registration fees itself. At the current price of $35 a year per domain name, AOL can make an easy $35 million a year doing this -- assuming it registers domain names for one million members, a fraction of its current customer base. So yes, dot-com means money.

Another important question for the international regulatory body Internet Corp. for Assigned Names & Numbers is the use of our languages for domain names. Until recently, only Roman characters have been commonly used.

But in order for the Internet to become useful for ordinary people in Asia, local languages are critical, even at the domain-name level.

Efforts to make local languages available are already under way. For instance, iDNS.net International Pte. Ltd., which had its start as an academic research project at the National University of Singapore, allows Web-site owners to use Chinese, Japanese, Korean, Thai, and other characters as another way of expressing domain names. Services using iDNS already have started in Taiwan, Hong Kong, Thailand and India. Other efforts to develop services that can use Asian-language characters for domain names are also underway at China Network Information Center, a government-linked center in Beijing, at Internet One in Tokyo, and the Thailand Network Information Centre. But currently each initiative relies on competing and incompatible technologies. ICANN could help with the development of a globally accepted standard.

And then there is the question of whether the world should create new cyberspace domains for different regions. Among other things, ICANN decides whether to add new Internet domains, such as dot-biz or dot-shop, to help alleviate the shortage of "good" dot-com domain names. ICANN also sets rules on how to apply for new names under new domains and how to settle domain-name ownership disputes without costly lawsuits.

On Feb. 2, a branch of the European Commission proposed to launch a new domain, .eu, for Web sites registered by institutions in EU member countries. The goal is to establish a coherent domain system throughout Europe that also will give the European Union a stronger identity. In this regard, the domain name is becoming a symbol of political and social integration. Shall we also propose dot-Asia? Why not! But from whom do we need to get permission?

To understand all this better, first, a little history.

Until last year, a U.S. company called Network Solutions Inc. had the exclusive U.S. government contract to manage dot-com registrations. NSI became quite powerful simply by having the monopoly rights to charge $35 per dot-com annually at a time when new domain-name registrations skyrocketed. By Jan. 20, it had registered 24.8 million domain names, double the number of the prior year, according to Network Wizard, a private Internet survey organization.

Under increasing pressure from the private sector, in 1997, the U.S. Department of Commerce realized it had to end NSI's monopoly and introduce competition and balanced international oversight. After many meetings and online discussions world-wide, ICANN was established in October 1998. ICANN, a nonprofit company, oversees global Internet resources, such as domain names and Internet Protocol addresses, the numeric addresses that identity the location of Web servers and other computers connected to the Internet. It is also charged with introducing private competition for the registration of domain names.

ICANN is the world's first experiment in overseeing cyberspace. While its scope is largely technical, its policy decisions will have a dramatic impact on business and social life on the Net.

It's easy to understand why enthusiasm about an Internet regulatory body might seem like a hard sell, in comparison with pressing issues such as hunger and poverty. Yet, it may become increasingly difficult to separate economic development from the Internet economy. The emerging digital economy will certainly produce a digital divide. Already, while Asia shares 37% of global Internet users now, less than 1% of the population has access to the Net.

And so, I'd like to make a plea for more Asian participation in global Internet governance. This year, ICANN will implement at-large membership. We lobbied hard to reduce fees so that even representatives from the poorest economies could participate. The door is now open.

Based in Kuala Lumpur and Tokyo, Izumi Aizu is Secretary General, Asia & Pacific Internet Association, and Principal, Asia Network Research, a private research unit. He can be reached at izumi@anr.org and www.anr.org.

Internet Corporation for Assigned Names and Numbers

Asia and Pacific Internet Association

Asia Pacific Networking Group

iDNS.net International

U.S. Department of Commerce

Nua Internet Survey, 1999

1999 World Population Data Sheet and Book Edition