What are the risks when submitting a new gTLD application to the ICANN?

Submitting a new generic Top-Level Domain (gTLD) application to ICANN is a significant undertaking with various risks and responsibilities. It's essentially applying to run a registry business, which means you'll be responsible for a critical piece of Internet infrastructure. Here are the key risks involved:

1. Financial Risks:

• Significant Investment: The application fee alone is substantial (e.g., USD $185,000 to $227,000 for the next round, subject to change). This doesn't include other potential costs like conditional evaluations (e.g., Community Priority Evaluation) or fees for legal and technical support.
• Loss of Investment: There's no guarantee your application will be approved. If it doesn't pass the extensive evaluation process, you could lose a substantial portion or all of your initial investment.
• Ongoing Operating Costs: Beyond the application fee, you'll incur ongoing registry operating costs and must demonstrate sufficient financial depth to sustain the registry for at least three years, even if your business plan doesn't meet its objectives.
• Competition: Your applied-for gTLD will compete with other applications for similar strings, as well as existing generic and country-code TLDs. This competition can impact your ability to generate profitable revenue.

2. Operational and Technical Risks:

• Complex Evaluation Process: The application process is intricate, involving rigorous technical, operational, and financial evaluations. Unfamiliarity with these protocols can be overwhelming.
• Technical Challenges: Running a gTLD requires highly skilled technical operators or a reliable technical partner. You'll be responsible for ensuring the security and stability of the Domain Name System (DNS) for your gTLD.
• Compliance with Registry Agreement: If approved, you must comply with all obligations outlined in your registry agreement with ICANN, which are extensive and legally binding.
• Name Collisions: There's a risk of "name collisions," where your proposed gTLD string might be in use in private namespaces, potentially causing technical issues. ICANN has mitigation procedures for such cases.
• Uncharted Territory: Operating a new gTLD means pioneering in a relatively new sector, often without established business models to guide you.

3. Legal and Reputational Risks:

• Objections from Third Parties: During the objection period (typically 7 months), trademark owners or other interested parties can file formal objections to your application on various grounds:
  • String Confusion: If the proposed string is confusingly similar to an existing gTLD.
  • Legal Rights: If it infringes on existing legal rights, especially intellectual property rights like trademarks.
  • Public Interest: If it's contrary to generally accepted legal norms of morality and public order.
  • Community Objection: If there's substantial opposition from a significant portion of a community the gTLD might be targeting.
  • These objections can lead to costly and time-consuming dispute resolution procedures.
• Cyberpiracy and Cybersquatting: While ICANN aims to minimize this, there's always a risk that bad actors could attempt to register domain names under your gTLD that infringe on trademarks, leading to brand protection challenges for your registry and potentially costly enforcement actions.
• Governmental Advisory Committee (GAC) Concerns: The GAC has significant power to raise concerns about applications, which can lead to manual review by the ICANN Board and potentially block an application.
• Reputational Impact: As a gTLD operator, you become a highly visible part of the Internet infrastructure. Any operational failures or significant disputes could damage your reputation.

4. Business and Market Risks:

• Uncertain Demand: There's no guarantee that there will be sufficient demand for domain name registrations under your new gTLD to make it financially viable.
• Market Acceptance: Consumers and businesses may or may not readily adopt new gTLDs, especially if they are unfamiliar or perceived as less trustworthy than established TLDs like .com.
• Evolution of the Internet Landscape: The internet is constantly evolving, and the relevance and demand for specific gTLDs can change over time.

In summary, applying for a new gTLD requires significant financial commitment, deep technical and operational expertise, a robust legal strategy, and a realistic understanding of market dynamics. It's a high-stakes endeavor with no guaranteed success.