Nominet, the UK’s not-for-profit governing body for domain names announced on the 1st of October 2012 that they were proposing to release a new .uk extension to the public. It’s been well over two decades since we were first introduced to .co.uk; consumers have learned to trust .co.uk’s and businesses have spent billions developing them. Will the introduction of a simple .uk make logical sense or will it irreversibly damage one of the UK’s most important economic assets?

And what about Nominet, the people behind this change; is this proposal actually in favour of consumers or just a passive aggressive push for generating bigger revenues? While Nominet has been clear that so far nothing is set in stone, the debate has become a contentious one with a long list of winners and losers.

Consumerism

Consumers are why the internet makes up a massive 8.3% of the UK’s GDP, and 93% of all UK domain names (.org.uk, .me.uk etc) use .co.uk. The .co.uk name is internationally recognised, it’s Europe’s second most popular extension behind Germany’s .de and is synonymous with UK business.

But Nominet would argue that the resulting short-term consumer confusion of the .uk introduction is for the greater good.

“Our vision is to create a secure, trusted space and in turn increase take-up of online presence amongst British businesses,”

-Nominet

.uk Security

Unlike the .co.uk extension, the .uk will only be available to UK citizens meaning that every site will be operating under UK law. There are some real benefits to this; it means that consumers can purchase in confidence and businesses may feel more inclined to set up shop online. Along with that, .uk domains will be scanned daily for malware and will make use DNSSEC to ensure that visitors reach their intended destination.

Extra security is great, but why can’t Nominet just add this level of security to the existing extensions? Well, other than the obvious issues of making a previously globally available .co.uk exclusive to UK citizens, Nominet have been pretty vague:

“It would be unfair to retrospectively impose a new suite of features and requirements on .co.uk or any of our other second level spaces … .co.uk is already very popular and not all existing registrants are likely to want and need the features that are proposed in the new service.”

-Phil Kingsland, Director of Marketing at Nominet

Extra security features for existing .co.uks? No thanks! …

Global Competitiveness

Remaining globally competitive as a nation has been surprisingly understated by Nominet. In 2013, another huge domain move will occur with the release of thousands of gTLDs to the public, these domains will end with extensions like .book, .shop and thousands of others. On the back of this, countries are looking to update their extensions in order to stay competitive – why would anyone grab a long and not particularly descriptive .co.uk when there will be literally thousands to choose from. A .uk will mean businesses are able to compete for custom internationally with a secure, UK specific name that is short and memorable.

In March 2012, the UK was deemed to be ‘the most internet-based major economy‘ in the world; and staying competitive for this reason alone is why a move to .uk is essential.

When it comes to releasing new domain extensions, a roll out is never going to be easy. Conflicts and legal disputes are inevitable as businesses clash over domains during what is called the ‘sunrise’ period (launch period). The impact on business both good and bad cannot be stressed enough; and Nominet’s current consultation period is being run to try and soften the below on all sides.

As a business, if you own a .co.uk you don’t really have a choice. Either buy a .uk or risk your brand becoming diluted, confused or even stolen. Ignoring the new name is not option. A .uk name is likely to set you back around £20/year, which is up from £2.50/year for a .co.uk. As businesses go, a cost of £20/year won’t be noticed; but for those with hundreds and even thousands of domains, being forced into paying a few thousand pounds extra a year isn’t going to be welcomed with open arms.

Overall the cost to UK business is expected to reach around £50,000,000/year, and that’s assuming that the new extension integrates itself seamlessly – an idealistic impossibility. Nominet are currently looking at all possible ‘sunrise’ periods for releasing the new extension. These include:

  1. Domain Owner Sunrise: Sunrise phase for existing domain owners, also taking trademarks (from current domain owners) into account.
  2. Trademark Sunrise: Sunrise period for trademark owners without existing domains.
  3. Landrush: Expression of interest available to everyone.
  4. General Availability: Domains available to everyone, normal registration fees.

The first option is looking to be the most likely; legitimate websites that exist as a .co.uk will be given first refusal and trademarks will also be taken into account. But at what point do trademarks begin being looked at?

For instance, there is a trademark for the generic term ‘tickets’ that is classed under ‘scented candles’, and the same owner also has the mark ‘money’ which is listed under the same class. Should sites like ticketmaster.com or natwest.com miss out on these generic terms because of a seemingly irrelevant trademark?

Knowing where the cut off lies isn’t going to be easy. But reassuringly, senior legal counsel Nick Wenban Smith said it was “unlikely that all trademarks will pass the criteria required to qualify for new domains in the sunrise, just as it is unlikely that all companies will want the identical domain in .uk that they hold in .co.uk”.

So this mix of .co.uk domain ownership and mark ownership really is the only viable option. First refusal based solely on trademarks would clearly be unfair for the reason mentioned above and having anything close to a first-come first-serve rollout would be riddled with complications.

Whatever the sunrise period, disputes are going to take place and auctions may be the only way to settle them. What really stands out here is that the predicted cost of £50,000,000 is going to be a lot higher.

But are Nominet’s motives in the right place?

Whenever a lot of money is involved there will be cynics that follow, but some of this cynicism looks to be well placed. A thread from Acorn Domains – the UK’s largest domain forum – currently shows over 1,500 responses on the subject; a quick browse through will give you an idea of just where public opinion lies (pretty sour). Domain expert Edwin Hayward has also listed a compelling argument against this move, and James Macfarlane, a director at Inbound Digital Marketing posted insight on what appears to be a scandalous affair amongst a group of elite.

What James pointed out was that of the 9 decision makers for this proposal, 4 of them come from backgrounds with a vested interest in the outcome. What’s more concerning is that Angus Hanton, who served on the board of directors for Nominet, wrote this in his 2008 resignation letter:

“The company [Nominet] is meant to be controlled by, and answerable to, its membership as well as having duties to the wider community. My firm impression is that some other directors would like to eliminate the membership’s control of the organisation and are not committed to the company’s not-for-profit objectives.”

(Source: http://www.notnominet.org.uk/angus.htm)

While Nominet has been quick to deny that any decisions have been based on revenue, it’s hard to discount the potential influence that such a small group of decision makers might have had.

When it boils down to the winners and losers of Nominet’s proposal, it’s black and white. Companies like 123-reg.co.uk that offer .uk registrations will make a fortune while small and local businesses will fork out millions trying to protect their brand. But putting lawsuits, trademarks and business values aside, to remain competitive in 2013 the UK’s ‘internet economy’ needs modernising and it needs to reach an evermore-global audience; and the .uk will achieve that.