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The Weather Channel and Domain Name Competition

In order to have a website, the owner needs to register the name of domain with a company that keeps track of all the domain names. While there are a large number of possible names, only a relatively small amount are desirable.  Businesses with similar services will desire the same names.  Some businesses will buy domain names that have similar spellings to their primary domain name so they can re-direct users to their web page. This protects their clients from scams and prevents other companies from stealing their clients.  This makes the market highly competitive.

The current system allocates a desired domain name to whoever asks first.  If someone asks for a name that is currently taken they will need to chose the next name on their desired names list.  The registration expires after a period of time up to ten years.  While companies are usually good at re-registering their domain name, some individuals will purchase the domain name before it happens and sell the domain name through an auction.

The Internet Corporation for Assigned Names and Numbers (ICANN) has recently been accepting applications for the creation of new top-level domains.  Right now there are only a handful, like (dot)com, (dot)gov, and so on.  Adding more top-level domain names can create a system where every company can have a relevant domain name.  It is unclear on whether they were hoping domain name registration companies would be the ones to apply, or if they anticipated individual companies to apply for relevant top-level domain names.

The Weather Channel applied for the sole ownership of the (dot)weather top-level domain name with ICANN.  This means that only the Weather Channel would have the ability to have a website address end in (dot)weather.  Other weather services led by AccuWeather have filed a complaint with International Chamber of Commerce.  The introduction of external regulation can affect a matching market.  Governing bodies tend to base their decisions on a sense of equality and fairness which pareto efficiency and matching market algorithms have no ability to consider.  The decision of ICANN to approve (dot)weather and the decision of the International Chamber of Commerce to allow them is still uncertain.

A decision by ICANN to approve the top-level domain name for the Weather Channel would indicate that they wish to create a market for top-level domain names in addition to the current market for bottom-level domain names.  This will cause a rush of companies registering their current domains as top-level domains and an attempt to register their current bottom-level domain name in as many top-level domain names as possible. Actions taken by the International Chamber of Commerce to prevent this could lead the the market switching to a different allocation algorithm then the current serial-dictatorship matching.

~vlb52

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One Response to “ The Weather Channel and Domain Name Competition ”

  • Roman

    This is a really interesting article, though I must say, my first reaction to this proposal was negative. Introducing this extra layer into the hierarchy would require a restructuring of the way most URLs are resolved via DNS — currently, there are a fixed set of servers that handle requests to top-level domains such as “.com”, “.edu”, “.gov”, etc. Allowing for this change would require a significant amount of extra resources and redundancy, which, from a technological perspective, does not seem worth it. Essentially, this takes an intended hierarchy which distributes load across all levels, and instead creates a situation where it becomes concentrated at the second their (corresponding to top-level domains). But that is a secondary issue.

    To me, it just seems like this would open up the market but would not entirely solve issues related to cybersquatting, the phenomenon described in your post. People already find it hard enough to remember long URLs, and addresses like weather.weather rather than weather.com just seem redundant. Looking up the details, it appears that there is a significant fee involved — $185,000 to apply, and $25,000 per year to remain listed. I suppose while such fees will prevent most individuals from taking advantage and buying up a name to resell it as in the past, any company with even a mediocre level of cash on hand could continue to squat. Perhaps the application process is no longer blind, and applicants must actually justify why the doman name would be relevant to their business. In this case, my only concern would be the ease of remembering a URL.

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