The proposed changes to domain names in New Zealand will create some marketing opportunities, but will also add costs and risk to many businesses.

The New Zealand Domain Name Commission is currently seeking submissions on a proposal to allow users to register second level domains in the .nz domain space.

The way things are at present you could have a website at www.jinky.co.nz. Your email could be jonkey@jinkey.co.nz. If the new proposal is accepted, you wouldn't need the co, net, org or govt in the domain name. You could just have www.jinkey.nz for your website and jonkey@jinkey.nz for your email address.

Sounds simple enough. So what's the problem?

If we were starting from scratch and didn't already have thousands of well-known domain names in use for email and websites there wouldn't be any issues at all. Unfortunately that isn't the case.

Your users finding you

If you are a business you need your customers to find you. For example, if you are the Westpac Bank, you already have a website at www.westpac.co.nz. That site is probably used by hundreds of thousands of customers every day. You are probably happy with that address and don't want to change it. Any change would mean a lot of background technical changes. You could just redirect traffic from www.westpac.nz to www.westpac.co.nz, but you at least have to register Westpac.nz so customers who don't remember which you are will get to you either way.

Once we have a mix of some companies using .nz and some using.co.nz many customers won't be sure which to look at first to find the company they want. If they don't want to use Google, they'll just try one and see. From a marketing perspective you'll want them to get you first time.

Your users finding someone else

There is another reason why you would have to get westpac.nz. Even if you didn't want to use the name, you wouldn't want anyone else to use it. If a third party did register it, then they could use it for anything - a parking page, a phishing site that looked like your site, or a porn site. In the best case you'd look slow and hokey. Either way, it would be a terrible marketing "fox paz".

Your email going somewhere else

At least (with the exception of phishing sites) customers would usually know if they went to the wrong website. Email is potentially more of a risk. For example, if a third party registered meridian.nz, it would be very easy to arrange for any email sent to anything@meridian.nz to go to their own inbox. If anyone accidently sent an email to jon@meridian.nz instead of jon@meridian.co.nz it would go to the wrong place. It would be a huge security risk for any company or government department to allow that to happen.

Confidential emails relating to corporate deals, employees, marketing plans or anything else could get into the wrong hands. And remember, we'd have a mix of some companies using .nz and some using .co.nz, so without doubt some people would make guesses as to what your email address was -jon@meridian.co.nz or jon@meridian.nz.

And apart from those risks, obviously there is a likelihood of confusion even if two legitimate businesses were operating, one at www.jinky.co.nz and one at www.jinky.nz.

The bottom line

So the bottom line is that if you currently operate a serious commercial or informational website in .co.nz, .org.nz or .govt.nz you will need to register the corresponding .nz domain. Whether you are company with a .co.nz, a charity with a .org.nz or city council or government department with a .govt.nz you can't afford confusion with someone else having the .nz equivalent of your address.

Here comes the sun

InternetNZ has proposed a two or three month sunrise period. The sunrise period will be a designated window during which existing .nz domain name holders can register their domain name at the second level if they are the only one that has that name at the third level. So if you already have jinky.co.nz you would get the first option on jinky.nz.

So far so good. Just don't miss the sunrise window. Or be one of those cases where two or more registrants already have the third level domain (you've got abc.co.nz and they have abc.org.nz). In that case you can't get abc.nz without their consent, even if they aren't actually using abc.org.nz, or even if they are squatting on your brand in .org.nz. While you might not have cared too much about that squatting to date, there is suddenly a real risk of being held to ransom.

What about other protections?

In the new gTLD rollout (new top level domains to compete with .com, etc, and referred to in the DNC Consultation Paper as one reason in favour of the proposed change) there are a number of other protections for trade mark owners. For example, there will be sunrise periods during which the owner of a trade mark, say Icebreaker, could get in first to get the domain name icebreaker.whatever.

Trade mark sunrise periods have been used in every gTLD rollout since .info and .biz in 2001. Why has the DNC not proposed these here? The DNC consultation paper says Canada has made this change already. I had a look to see how that went, and what protections they put in place. Strangely, it turns out that second level domains have always been available in Canada, so they never needed to deal with the problems associated with a changeover. In fact, they don't allow a name that is registered as a third level in .ca to also be registered as a second level.

So is it big.mistake.nz or free.choice.nz?

If the proposal goes ahead, will every business, city council or government agency in the country that has a website have to get a new domain name and manage two names? I think that they will, yes. And if they have a large domain portfolio, will they have to replicate most of their names as .nz names? Yes. And if they register a domain name in the future for an ad campaign or new product or service will they need to get both .co.nz and .nz names? Probably.

So will all that cost us all more? You bet. And if everyone who is using a .co.nz name goes out and gets the corresponding .nz name, will there be any more names available for others to use? Nope. And if different people used the .co.nz and the .nz would there be confusion anyway? Probably. So why are we doing this again?

I don't want to be too negative though. It's going to be great for InternetNZ, the Registrars and us lawyers.

Submissions can be made (and read) online at www.dnc.org.nz.

An edited version of this column was published in Marketing magazine, Sept/Oct 2012 edition.