Sedo Newsletter April '07
.TEL: The Next Big Thing?
By Christian Kalled, Director of North American Brokerage
Have you ever heard of Telnic Limited? If not, you're not alone. Until May of 2006, few outside of ICANN were familiar with the London-based start-up. That is until ICANN awarded Telnic exclusive rights to operate the registry of the new proposed sponsored Top Level Domain (sTLD) .TEL.
What is .TEL and why is it important?
According to Telnic's website, the company was founded in 1998 to develop and deliver "cutting-edge technology" that will allow individuals and businesses to "initiate communication or access services" by inputting a text-based address (i.e. a .TEL URL) on any web-enabled device. Telnic hopes to promote the integration of new technologies with conventional communications "such as fixed-to-mobile convergence by providing a "unifying naming structure" that will support both voice and data communications seamlessly.
How will they do it? By embracing IP-based technologies driven by the increasing power of broadband, Telnic intends to unify the traditional identifiers of personal communication "like telephone, mobile, and fax numbers, in addition to email and instant messaging addresses" into a universal, text-based URL. In the future, Telnic envisions users of the .TEL extension will be accessible via phone, fax, and email through a single, .TEL identifier, such as JohnSmith.tel.. Registrants will store their contact information on the DNS in the form of Naming Authority Pointer (NAPTR) records, which will be accessible via registry-sponsored software. Thankfully, Telnic has expressed a commitment to open-source technology, which should help to encourage early market adoption as well as technical innovation in the first stages of launch.
Sounds pretty cool, doesn't it? But how far off are we from mainstream adoption? What challenges lie ahead, and what implications does the release of .TEL have on the secondary domain market?
To start, no timetable for launch has been given. The .TEL project is already a long time in the making. Telnic filed its original application with ICANN in the fall of 2000. In 2004, evaluation teams commissioned by ICANN determined that Telnic did not yet meet the technical, business, or financial requirements of its Request for Proposal (RFP). Telnic continued to work through these issues and began commercial and technical negotiations with ICANN in mid-2005. By April of 2006, negotiations were concluded.
One major challenge to .TEL's viability will be the enforcement of its designated use. The new sTLD has been designed to locate people, rather than machines, a function that is separate and distinct from all other TLDs. Telnic, in conjunction with registrars, will have to put far-reaching measures in place to preserve the integrity of the .TEL community and ensure that no user-defined A, AAAA, or A6 resource records are stored on individual DNS.
The implications of enforcement could also be considerable for speculators. If NAPTRrecords are the only acceptable format for .TEL DNS, this may preclude traffic monetization entirely. It is unclear whether Telnic's acceptable use policy will restrict parking in this way, but it is certainly a cause for concern at this stage. If this were indeed the case, speculators would have to limit their activities to arbitrage only. This scenario is not unlikely, and could give rise to leasing-models similar to NetIdentity's, where surname-domains are subdivided (i.e. John.Smith.tel) and then rented to individual users on a subscription-basis.