This discussion has been going on for a while, but hopefully we are nearing the end of the road, as there is a lot of frustration in the non-ASCII world, and there is the major risk of alternate roots being set up and the "splitting" of the internet.
There are political and policy issues as well that need to be sorted out, and these include the following intellectual property issues:
- Does a registrant holding an ASCII TLD have a prior right to register the same in the IDN version? What about trademark holders?
- Would current domain name holders feel forced to register the IDN equivalent for brand protection? That might be seen as a form of extortion.