Change is coming to the New Zealand domain name landscape with the recent decision of the Domain Name Commissioner (DNC) to allow registrations of domain names at the ‘second level’.
In our last blog post, Modica Group Chief Operating Officer Simon Stokes explained what these changes will mean, how they will affect you and your brand and a brief overview of how the DNC is likely to resolve issues arising from parties competing for domain names.
In this post Simon explains how .nz at the 2ld is likely to be more expensive, be more difficult to regulate and the increased risk of falling prey to phishing schemes.
Cost for registrants
As many suspected, making yet another domain name type available will probably result in increased costs for registrants. Of course, no-one will be forced to register the new version of their domain name but for anyone seeking to protect and build their brand online, not doing so runs the risk of someone else registering it for their own purposes. The current proposal does contain provision for a domain ‘reservation’ at no cost for at least two years, to be made available to existing registrants who wish to protect their name or brand but don’t wish to register (and pay for) the 2ld name. Given that this free reservation would only last two years, we suspect most businesses will opt for ‘defensive’ registrations.
Cynics have suggested that the extra revenue InternetNZ (as the owner of New Zealand Registry Services) will derive from a new wave of registrations, is one of the drivers behind the move. While we don’t believe this to be true, it can’t be denied that the overall spend on .nz domain names will increase.
One of the great things about the New Zealand domain name space is how well regulated it is. The existing policies are robust and sensible, and an affordable and workable dispute resolution policy works well to prevent costly legal disputes. By contrast, gTLD domain names such as those ending in .com, .org and so on, represent the ‘Wild West’ of the domain landscape with far less provision for the rights of the registrant, and a costly and often dysfunctional disputes process.
Unfortunately, one of the consequences of the opening of .nz at the 2ld, is New Zealand may well end up with its own Wild West in the form of unregulated subdomains at the third level.
Let’s say for example, that someone registers the domain name ‘parties.nz’, then advertise the following supposed domain names for sale:
What they’re doing is selling subdomains, rather than actual domain names. There would be nothing to stop the registrant of parties.nz cancelling the subdomains or pointing them at a totally different website and email destination, leaving the purchasers of the hen and stag subdomains with what they thought was their domain pointing at someone else’s website.
Part of the current consultation being carried out by the DNC contemplates an extension of the disputes resolution process for an initial period of two years to try to address this, but what will happen after that two year extension is not yet clear.
The opening of the 2ld looks likely to prove a boon for criminals. For years, we’ve been told to ‘look for the padlock’ in a browser window whenever we are doing things like logging into a website or providing credit card details for an online purchase.
Now we also have to be ever-more vigilant to avoid being trapped by typo domains.
Let’s use a fictional bank called CNZ as an example. CNZ Bank uses the domain name cnz.co.nz. A criminally minded person then registers the domain cnzco.nz, obtains a digital certificate for the new domain and makes a website that looks suspiciously like the legitimate CNZ website complete with a login form to get into internet banking. The dodgy website then harvests the banking details of hapless users who missed the extra dot in the domain name. Far fetched? Far from it. This style of phishing attack has been around for years. The opening of .nz at the 2LD merely opens up a whole fresh new phishing ground for the unscrupulous.
The availability of a new, shorter domain name will inevitably lead many organisations to move their online presence to the 2ld version of their domain. While there’s nothing wrong with that, if it is not done carefully, link rot can easily result as visitors to the site click on bookmarked links which no longer exist, resulting in frustration for the visitor and a potential loss of business for the site owner.
What about trademarks?
As with the existing .nz policy, the current proposal takes no account of trademark ownership. It is expected that the dispute resolution process, will also determine the question of a trademark’s relevance.
This is in stark contrast to the approach taken for the roll-out of new gTLDs by ICANN who established the trademark Clearinghouse to safeguard the interests of registered trademark owners.
Of those submissions against the introduction of 2ld registrations, a good number raised the issue that no provisions were made for trademark holdings. In our view, where two competing registrants want the same 2ld name, some priority should be given to the one holding a relevant trademark because the process of obtaining it is subject to cost and external scrutiny, and usually has some legitimate commercial purpose.
In the final article in the series we will look at what you can do to avoid the hidden pitfalls inherent in the introduction of .nz registrations at the second level.
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