Thomas is right that ICANN should not be inquiring whether the proposed use of a top level domain is good or bad. I have always believed that ICANN should be blind to the way in which an operator of a TLD uses that TLD (as long as the technical requirements of internet standards are followed.) See my statement on new TLDs in my campaign platform from year 2000.
However, as long as ICANN insists on restricting the number of TLDs to only a chosen few then preference should be given to those applications that have minimal limitations on usage and have maximum room for innovation by users. Equally we should eschew those applications that are clearly intended to benefit a single industry segment.
So, if ICANN were to open up the TLD space to a really significant number of applicants then it would be wrong to look beyond the technical capacity and intention of the application.
Unfortunately the current state of affairs is that ICANN is restraining trade by allowing entry into the domain name marketplace to only a selected few based on highly questionable,and clearly non-technical, considerations.
ICANN's TLD policy is a rolling disaster. It is arbitrary and capricious. It has no foundation in technology. It serves no technological purpose nor does it enhance the stability of the internet. ICANN's TLD policy has kept domain name fees artifically high.
ICANN's TLD policy is nothing more a bald imposition of business policies and economic limitations designed to protect certain selected business actors and to exclude new ideas and actors from the domain name marketplace.
Update (March 16, 2004): There is a discussion along
similar lines occuring between Edward Felton and Lawrence Solum -