INSIGHT

Direct .au registrations, a new internet tax or a way to strengthen the .au market?

By Miriam Stiel
Industrials Intellectual Property Patents & Trade Marks

In this issue

In the most significant change since the .au domain was introduced more than 30 years ago, .au Domains Administration (auDA), the industry body for Australian-specific domain names, has approved the registration of .au second-level domain names, known as direct registration. Lawyer Elliott Burton outlines the issues in developing an implementation policy for direct registration, which is due in the next few months.


Currently, Australian domain names need to be registered under a third level extension (TLD) such as 'example.com.au' or 'example.net.au'. The proposed expansion would allow businesses, not for profits, government, education and individuals to register as 'example.au'. This is a significant expansion to the Australian domain name market.

auDA believes that direct registrations would benefit the Australian community by:

  • making domains short, more appealing and more memorable;
  • providing more choice by opening up another layer of potential domains;
  • responding to market demand (based on public surveys);
  • being more appealing to individuals than the current '.id.au' domain; and
  • strengthening the .au brand in the global market.

However, some commentators are concerned that direct registrations will cost Australian businesses, going so far as to term the proposal a new internet tax. Businesses may have invested significant resources in a '.com.au' or '.net.au' domain name, only to have that goodwill diluted by the same name being made available as a direct registration. To maintain control over the name, affected businesses will need to spend money on direct registrations (even if just as a defensive registration), and may even have to pay a premium to recover the domain from another party who registers it first (if they are able to obtain the domain name at all).

There are two important questions auDA needs to resolve in its implementation policy, which will indicate the extent to which existing domain name holders will be affected:

  1. While auDA has acknowledged that the holder of an existing TLD should have priority in registering the same name as a direct registration, it has not decided a cut-off date for that eligibility. auDA has indicated that the direct registration announcement date (18 April 2016) could be used, meaning all registrations after that date would not be given priority. However, auDA has also acknowledged that uncertainty around the launch date for direct registrations, lack of public awareness about direct registrations, and the length of time since the announcement may mean that a later cut-off date should be chosen; and
  2. auDA's policy will need to set out how it will deal with competing claims, where different registrants own the same domain names under different TLDs. Dealing with competing claims is a complex issue and any approach will result in someone missing out on the direct registration. auDA's possible approaches include:
    • conducting a lottery, with the winning ticket being assigned the direct registration;
    • an auction whereby the name goes to the highest bidder;
    • priority for the longest continuous registration or registrant of a TLD domain name;
    • an order of priority approach, with priority given to existing registrants;
    • a combination of the above; or
    • different approaches (yet to be outlined).

We'll have to wait and see how auDA decides to deal with these issues. Whichever approach it takes, it is likely to raise new issues for Australian businesses holding .au domain names. auDA's draft policy is due to be published in June/July 2018.

Update

After publication of our story above, recommendations for reform of auDA were released, following a Government review. In accepting all 29 recommendations, the Minister for Communications, Senator the Hon Mitch Fifeld, has issued a Terms of Endorsement which will seek to reform the management framework of auDA. As a result of implementing the recommendations of the review, auDA has indicated it will not be in a position to consider direct registration until the second half of 2019 at the earliest.