] > On the other hand,
] > too many 2LDs could cause consumer confusion.
] 
] This is a really weird concept.
] 
] "Lets not have more options because WE think THEY won't understand"
] 

But what about the risk that business XYZ who currently has 
domain xyz.com.au will feel pressured to also register xyz.biz.au
and/or xyz.[insert new open 2ld here].au?

There are a few reasons businesses might feel pressure to get
multiple domain names like that:

(1) Their potential customers might try looking for them in the
    new 2LD as a guess (this might be where the consumer confusion
    argument comes from - its not the registrant who gets confused,
    but the person with the web browser) 

(2) Other organisations might decide to register xyz in new 2LDs.
    The organisations might be competitors or cybersquatters or
    other unrelated businesses who happen to pick a similar name. 

This kind of "defensive registration" culture which is common in
gTLDs is good for registrars (and other who benefit from more
domains), but IMHO is bad for registrants (who feel forced to
register domains they don't really want, just to stop someone
else from getting them).

Fortunately, the policy in 2LDs like com.au which makes it hard
for organisations to register names which are unrelated to their
real world names has largely kept this culture at bay in .au so far.

(Although organisations like ING seem to be trying to instill
a defensive registration culture here.)

__________________________________________________________________________
 David Keegel <djk&#167;cyber.com.au>  URL: http://www.cyber.com.au/users/djk/
Cybersource P/L: Unix Systems Administration and TCP/IP network management