As we start the new year, it is worth noting some of the major events and news in 2008 that shaped the industry and fueled considerable discussions. Last year’s occurrences made for a very historic year, bearing the seeds of future changes for the DNS and domain name industry.

The “Kaminsky Bug” and DNSSEC

In August Dan Kaminsky unveiled the flaw that leaves a “gaping hole” in the Domain Name System (DNS). The coverage of Kaminsky’s bug proved many early advocates and pioneers right. DNSSEC is the best fix and a needed upgrade to the DNS infrastructure.

Much credit belongs to the Swedish country code domain, .SE, the first to implement DNSSEC and to Nominet (the registry for .UK) who championed the need for it before we (the .ORG registry) announced as the first gTLD to start implementation.

What came to be termed as the “Kaminsky bug”, changed the debate on DNSSEC from “Do we really need DNSSEC?” to “How do we implement DNSSEC”?

Expansion and introduction of new Top-Level Domains (TLDs)

In June, ICANN announced the process for expansion of new gTLDs. Note that there will most likely be a few gTLDs that make sense by truly serving the end-user need, perhaps via an innovative application. But, user confusion will result from a flood of new gTLDs which serve no discernable purpose. Most internet users will not immediately be aware of new TLDs, and even if and when they become aware, they will not be able to correctly remember the site address. So very likely they will simply defer to the search engine. Browser manufacturers are already figuring this out and are incorporating search function right into the address bar, like Google Chrome undermining the categorization that exists because of the TLDs.

If address bar and search functions are merging and if users increasingly use search engines rather than direct navigation to resolve to a site, how relevant will TLD designations be? Probably far less than today.

And what about the variety and choice the spammers, phishers and distributors of malware will now have in terms of new TLDs to target? This doesn’t even begin to touch on the impact on brands and trademark holders who will have to spend even more money protecting their brands and registering them in hundreds of sunrise periods. And lastly, where is the data that in fact the end-user wants upwards of hundreds of new TLDs to help them navigate? On December 18, NTIA posted a comprehensive set of comments to ICANN’s proposal which effectively halted the current plan and timetable due to some of these same concerns and lack of research. We believe these comments point out the needed due diligence before moving forward.

Lines between Registries and Registrars starting to fade

ICANN also made public the much anticipated CRAI report. The distinct lines of separation between registries and registrars will blur as a select few registrars will try their hands at the registry business. Bottom-line: we believe ICANN’s policy should bar cross ownership of registries and registrars (except in some limited cases for small private TLDs). There are just too many opportunities for anti-competitive behavior if registrars own registries and give their captive registries special treatment. If not, then ICANN should make any new ownership policy equally applicable to registries and registrars.

Industry leaders “stepping up to the plate”

In 2008, we started initiatives such as the DNSSEC Industry Coalition and the Registry Internet Safety Group (RISG) and helped form the Arabic Script IDN Working Group. The credit goes to the members of these groups who have volunteered to work together and donated experts and time to delve into problems that affect each and every Internet user today. The problems range from how to thwart phishing and malware and how to streamline DNSSEC implementation across multiple registries to how to enable Arabic IDNs to work across multiple languages and registries. The end user benefits most of all, and we believe collaboration is the wave of the future in these efforts.

ICANN shuts bad actor registrars

After a few highly publicized episodes of bad actor domain registrars, and much criticism of slow response, ICANN moved to terminate the accreditation of an especially egregious registrar EstDomains effective November 24th. Let’s hope the next ones will also be swiftly terminated. Registrars with questionable practices erode customer trust and are bad for everyone’s business.

Domain Tasting plunges

In the past few years our industry has experienced something of a boom, not unlike the real estate market, complete with speculation, a robust secondary market and rapid fire growth. 2008 was the year of the recession, initiated ironically enough with the real estate market. The 20% to 30% hyper growth is no more. Was the end to the hypergrowth just due to the recession?

Top two in my mind are the changes in the Google AdSense model as well as the end of domain tasting. PIR (the .ORG registry) was the first registry to enact an Excess Deletion Fee for domain tasting. The net result for us was a much more stable base. But—pardon the pun—the “distaste” for domain tasting spread far enough for ICANN to enact limits on the Add Grace Period (AGP—the source of the problem). These factors most likely led to the slowdown in growth of domain names in 2008.

Governments push for their own Internationalized Domain Names (IDNs)

Push has been coming from governments who want an IDN of their own sooner rather than later. The Internet is the great frontier, and IDNs are certainly valuable when used to enable people to express their names and hence desired addresses as their language and script intended and not as a transliteration of English. The worrisome notion comes when the urgency for IDNs are bound and rolled into highly nationalistic sentiments which more often divide than unite.

GoDaddy is the undisputed market leader among registrars

GoDaddy claims to have registered over 32 million domains. It is no secret that they are a smart and innovative marketing machine. For their competitors, they are a formidable force to beat on the retail game, leaving them to ponder the cost of competing head-on.

Gambling and the Kentucky Domains

A recent law suit in Kentucky has attracted world-wide attention because it could create a very dangerous precedent—the application of local law to the domain name system and Internet web sites that are available globally. Even though the Kentucky case only involves Kentucky gambling laws, the dangerous precedent is that regimes around the world with oppressive local laws restricting speech or religion might attempt similar litigation.

So there you have it, a reflection on the peaks and valleys of the DNS and domain name industry in 2008. I look forward to an amazing 2009 and the interesting and entertaining news to come.