Unfortunately as some character sets have letters that look like the latin letters, they have been misused and abused. Phishing attacks using them became common resulting in some browsers refusing to show them and some registries, including .nz, refusing to allow them to be registered.
Some time back the Domain Name Commission (DNC) conducted a consultation on the use of IDC in domain names, specifically with the intent to allow the pōtae macronised vowels: ā,ē,ī, ō, and ū used in te reo Māori.
They have decided they should proceed with the implementation of IDNs in .nz. The next phase of the process is to consider mechanisms for a fair distribution of names.
- They plan that there will be a "sunrise" pre-registration period during which the registered owner of (for example) Maori.co.nz will be given exclusive rights to register Māori.co.nz.
- After the sunrise period first come, first serve will apply to IDNs in the same way as they apply to normal domain.
- Normal registration fees will apply to the macronised names.
There's a bit more than that and I suggest if you are interested in the issue that you read the full proposal at the DNC site.
To my mind the proposal is fair. There's a reasonable chance that the owner of Maori.co.nz will want Māori.co.nz and this gives them exactly the chance that they need. On the other hand if the owner of a domain doesn't wish to have the macronised version there is no obligation on them to take it and I would imagine that a very few words will be highly sought after.
The burning question is are these names worth registering?
I'm going to assume that having a correctly macronised domain name will have a certain appeal to Māori and speakers of te reo Māori. There will also be a lesser interest from other groups.
With current technology these names are difficult to type on a PC with a standard English language keyboard layout selected and although those with an interest in the language will install the necessary configuration, most won't. This means that IDNs will receive very low type-in traffic. If I was going to acquire an IDN, I would want to also have the ASCII version of the name.
Obviously both technology and attitudes are going to change and it may both become easier to type IDNs and a social requirement to use macronised names.
I haven't checked but I guess I have 10 to 15 place names names in my collection that could benefit from also holding the IDN version. I'm unlikely to register the name unless I have the ASCII version and my criteria will be based on value add to the ASCII version with a little insurance against future trends. Medium term this may change, but for now I think I'll stick to this.
Since writing this I've added a second part.