.nyc is one of the proposed new GeoTLD under ICANN's new gTLD expansion program, which was approved by the New York City government and submitted by its Department of Information Technology and Telecommunications. On October 5, 2009, the department issued a Request for Proposal (RFP) seeking partners to operate the .nyc TLD. According to DoiTT Commissioner Paul J. Cosgrave, the .nyc TLD is beneficial for the city government, businesses and to its constituents. It will be utilized to generate revenue, promote local businesses and tourism and it will allow New Yorkers to easily find the services provided by the city government. Prior to the RFP, the DoiTT also released a request for information (RFI) on May, 2009. Feedback regarding options on how to use and administer the .nyc TLD from different Internet stakeholders were solicited and considered.
On March 22, 2012, the DoITT selected Neustar as partner to handle and manage the application and operations of the proposed .nyc TLD. Under the agreement Neustar will pay all the required $185,000 ICANN application fee, and post application fees including the $25,000 annual fee once the TLD is approved. According to Nicholas Sbordone spokesperson for the DoITT, the registration for .nyc TLD will be limited to individuals, businesses and organizations with "substantive and lawful connections to the city." The New York City government will receive 40% from the total revenues generated from the .nyc TLD; its estimated minimum income for the first five years is $3.6 million.
The .nyc string is part of the 358 total gTLD applications secured by Neustar to serve as back-end registry service provider. According to Neustar's senior vice president of Enterprise Services, Alex Berry, the company was selected by the City of New York in a competitive procurement process and promises that it will "provide a complete registry services and the necessary support to make .nyc names available to the public". 
The following is excerpted from the applicant's response to question #18:
"New York City is one of the world’s leading digital metropolises. New York City has long been a foundation for innovation, enabling entrepreneurs to grow, cultivating generations of students, creating world-class infrastructure, and providing an unparalleled quality of life.
New York City government engages over 25 million people a year through more than 250 digital channels including nyc.gov, mobile applications, and social media. As a pioneer in Open Government, New York City government has unlocked thousands of public records, enabling technologists to build tools that help New Yorkers every day, from finding parking spaces to listening to audio tours of Central Park. One of the nation’s most connected municipalities, New York City’s digital sector growth propelled it to rank second in venture capital funding in 2010. By every digital index, the City of New York is thriving.
In the spring of 2011, Mayor Bloomberg and the Mayor’s Office of Media and Entertainment published the, “Road Map for the Digital City, Achieving New York City’s Digital Future.” The Road Map for the Digital City outlines a path to build on New York City’s successes and establish it as the world’s top-ranked Digital City, through commitments to Internet access, Open Government, citizen engagement, and digital industry growth.
The following excerpt from the Road Map expressed New York City’s intention to apply to ICANN for the .nyc gTLD.
The City of New York is currently pursuing the introduction of the .nyc top-level domain, a global milestone that will enable innovation and digital services for residents, and economic advantages for businesses. New York City could be one of the world’s first cities to operate its own top-level domain, presenting enormous opportunities. The .nyc domain will be administered by a private vendor to be selected by DoITT. The City is currently reviewing vendor candidates that responded to the City’s initial Request for Proposals (RFP), and plans to submit its application for the .nyc top-level domain when the International Corporation for Assigned Names and Numbers (ICANN) opens the application process. ICANN’s timeline is expected to be finalized after its official June 21, 2011 meeting, and the City of New York plans to apply when the application period opens. Only the vendor selected by New York City government will have the legal right to administer the .nyc domain.
The Road Map for the Digital City further describes how New York City Government, led by the New York City Economic Development Corporation will, in part through a DoITT led pursuit of the .nyc gTLD, continue to support a vibrant digital media sector through a wide array of programs, including workforce development, the establishment of a new engineering institution, and a more streamlined path to do business.
In summary, the City of New York views the .nyc gTLD as an important enabler to achieve the vision and mission described in the Road Map for the Digital City. Below you will find more details concerning how the .nyc gTLD will be operated in a manner that is aimed at serving the needs of New York City organizations, businesses and residents.
The City desires to have only those individuals or entities having a substantive and lawful connection to the City be permitted to register for .nyc domain names (“Nexus Policy”). Nexus compliance is a critical element in ensuring the integrity and reliability of the .nyc gTLD. Each registrant will be required to certify compliance with at least one of the Nexus categories before the domain is ever registered.
All .nyc Registrants must either be: (i) a natural person whose primary place of domicile is in the City of New York; or (ii) an entity or organization that has a bona fide presence in the City of New York. Factors that will be considered in determining whether an entity or organization has bona fide presence in the City will include, without limitation, whether such prospective registrant: (A) regularly performs lawful activities within the City related to the purposes for which the entity or organization is constituted (e.g. selling goods or providing services to customers, conducting regular training activities, attending conferences), provided such activities are not conducted solely or primarily to permit it to register for a .nyc domain name; (B) maintains an office or other facility in the City for a lawful business, noncommercial, educational or governmental purpose, and not solely or primarily to permit it to register for a .nyc domain name; and (C) regularly performs lawful activities outside of the City; provided that such activities relate to, or are primarily directed towards residents, tourists, businesses and organizations within the City (e.g. online content related to the City).
In addition, the City will conduct random spot checks of .nyc domain names to determine whether their owners satisfy the applicable Nexus Category."