Phase II Assessment of the Competitive Effects Associated with the New gTLD Program

Study, October 2016

This report summarizes the findings from the second in a two-phase study that assesses the impact of the New Generic Top-Level Domain (gTLD) Program on marketplace competition for the Internet Corporation for Assigned Names and Numbers (ICANN). The Phase II assessment builds on the Analysis Group team's findings from the initial study, "Phase I Assessment of the Competitive Effects Associated with the New gTLD Program," in which the team, led by Vice President Greg Rafert and Academic Affiliate and MIT Sloan School of Management Professor Catherine Tucker, assessed the New gTLD Program based on three metrics – competition, consumer choice, and consumer trust review. The second study, “Phase II Assessment of the Competitive Effects Associated with the New gTLD Program,” updates the team's measures of those metrics to assess the extent to which the New gTLD Program has affected competition in this marketplace over the past year.

The study found that, while only one year has passed since the initial assessment, the marketplace does show some changes. Average and median retail prices for registrations of legacy and new gTLDs, as well as retail mark‐ups over wholesale prices, have declined since Phase I. Top‐level domains continue to be introduced, meaning possible additional changes to the competitive environment in the future. While the overall price level of legacy TLD wholesale price caps continues to be lower than wholesale prices for new gTLDs, the study found “effectively no change in wholesale price caps for legacy TLDs…the presence of price caps on legacy TLDs may help to explain the absence of changes in legacy TLD wholesale prices.” In addition, the team noticed changes in the set of entities included in the largest 15 registries and registrars ranked by total domain registrations as a result of entry by new gTLD registries and growth in registrations made by different registrars who register new gTLD domains. The study also shows declines in the share of gTLD registrations held by the top four, top eight, and top 15 registries and registrars between Phase I and Phase II.

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Rafert G, Tucker C