<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report: February 9, 1999
NETWORK SOLUTIONS, INC.
(Exact name of registrant as specified in its charter)
Delaware 0-22967 52-1146119
(State of other jurisdiction (Commission File (I.R.S. Employer
of incorporation) Number) Identification Number)
505 Huntmar Park Drive, Herndon, Virginia 20170
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (703) 742-0400
<PAGE> 2
ITEM 5. OTHER EVENTS
On February 9, 1999, the Company issued its press release, attached
hereto as Exhibit 99.1 and incorporated by reference herein, with respect to
the "Guidelines for Accreditation of Internet Domain Name Registrars and for
the Selection of Registrars for the Shared Registry System Testbed for .com,
.net and .org Domains" (the "Guidelines"), which were issued in preliminary
form for public comment by the Internet Corporation for Assigned Names and
Numbers ("ICANN"). A copy of the Guidelines, dated February 8, 1999, is
attached hereto as Exhibit 99.2 and is incorporated by reference herein.
The press release and the Guidelines attached hereto contain
forward-looking statements that involve potential risks and uncertainties that
could cause actual results to differ materially from those stated or implied by
such forward-looking statements.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
99.1 Text of Press Release dated February 9, 1999
99.2 Guidelines for Accreditation of Internet Domain Name Registrars and
for the Selection of Registrars to the Shared Registry System
Testbed for .com, .net and .org Domains dated February 8, 1999
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
NETWORK SOLUTIONS, INC.
Date: February 9, 1999 By: /s/ Robert J Korzeniewski
---------------------
Robert J. Korzeniewski
Chief Financial Officer, Acting Chief
Operating Officer and Authorized
Signatory
<PAGE> 3
NETWORK SOLUTIONS, INC.
INDEX TO EXHIBITS
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<CAPTION>
Exhibit Description
- ------- -----------
<S> <C>
99.1 Text of Press Release dated February 9, 1999
99.2 Guidelines for Accreditation of Internet Domain Name Registrars and
for the Selection of Registrars for the Shared Registry System
Testbed for .com, .net and .org Domains dated February 8, 1999
</TABLE>
<PAGE> 1
NETWORK SOLUTIONS RESPONDS TO PRELIMINARY GUIDELINES
HERNDON, VA., FEBRUARY 9, 1999 -- Network Solutions, Inc. (NASDAQ: NSOL) today
commented on the Internet Corporation for Assigned Names and Numbers' (ICANN)
"preliminary form" guidelines, issued yesterday, for the accreditation of
Internet domain name registrars. Under these guidelines Network Solutions would
retain its position as the registry in .com, .net and .org top-level domains
(TLDs) and would function as a registrar as competition begins to evolve in 1999
at the registrar level. These guidelines will be subject to public comments
through March 3. ICANN seeks public comments on more than 50 specific issues
relating to the proposed guidelines. Network Solutions notes the "preliminary
form" guidelines are captioned as "not authoritative and not to be relied upon
by any party."
Network Solutions, Inc. (NASDAQ: NSOL) is the worldwide leader in
Internet domain name registration services with more than 3 million net
registrations. Internet domain names are unique identities that enable
businesses, other organizations and individuals to communicate and conduct
commerce on the Internet. Pursuant to an agreement with the U.S. Department of
Commerce, Network Solutions currently acts as the exclusive registrar for all
Web addresses within the .com, .net, .org and .edu TLDs. Network Solutions also
offers search and registration services in domain names in country code TLDs
around the world. In addition, Network Solutions also provides enterprise
network consulting services that focus on assisting large commercial
organizations in the evolution and management of their enterprise networks.
Statements in this announcement other than historical data and
information constitute forward looking statements that involve risks and
uncertainties that could cause actual results to differ materially from those
stated or implied by such forward-looking statements. The potential risks and
uncertainties include uncertainty of Internet governance and regulation,
increased competition in the domain name registration business, whether on not
the ICANN guidelines in this or any other form are implemented and the effect,
if any, that the guidelines may have on Network Solutions. More information
about potential factors that could affect the company's business and financial
results is included in the company's filings with the Securities and Exchange
Commission, especially in the company's Registration Statement on Form S-3 filed
on January 4, 1999 as amended, Annual Report on Form 10-K for the year ended
December 31, 1997 and Quarterly Reports on Form 10-Q for the periods ended March
31, 1998, June 30, 1998 and September 30, 1998.
For Network Solutions, Media: Christopher Clough, [email protected],
703/742-4706.
Investor Relations, Sean McClorey, [email protected],
703/326-6090. # # #
<PAGE> 1
- --------------------------------------------------------------------------------
IMPORTANT NOTICE: THIS DOCUMENT IS IN A PRELIMINARY FORM. IT IS NOT
AUTHORITATIVE AND IS NOT TO BE RELIED ON BY ANY PARTY WITH RESPECT TO THE
TO-BE-ADOPTED GUIDELINES FOR THE ACCREDITATION OF INTERNET DOMAIN NAME
REGISTRARS. FOLLOWING PUBLIC COMMENT, THE ICANN BOARD INTENDS TO CONSIDER
ADOPTING THESE GUIDELINES, OR A REVISED VERSION OF THESE GUIDELINES, AT ITS NEXT
REGULARLY SCHEDULED MEETING IN SINGAPORE ON MARCH 2-4, 1999.
- --------------------------------------------------------------------------------
INTERNET CORPORATION FOR ASSIGNED NAMES AND NUMBERS
GUIDELINES FOR ACCREDITATION OF INTERNET DOMAIN NAME REGISTRARS
AND FOR THE SELECTION OF REGISTRARS FOR THE
SHARED REGISTRY SYSTEM TESTBED FOR .COM, .NET AND .ORG DOMAINS
February 8, 1999
CONTENTS
I. INTRODUCTION
A. Purpose
B. Background
C. Schedule for Implementation of Shared Registration System
D. Goals and Principles of Registrar Accreditation
E. Issues in the Development of Accreditation Guidelines
II. COMMENTARY ON PROPOSED GUIDELINES
A. Contemplated Structure of the Domain Name Registration Business
B. The Goals: Preserving Stability of the Internet and Introducing
Competition
C. Overview of the Approach to Meet These Goals
D. Qualifications of Registrars
E. ICANN's Relations with Registry Administrators and Registrars,
and the Special Case of .com, .net, and .org.
F. Submission of Registrations by Registrars, Data Escrow, and
Rights in Data
G. Whois Service
H. Vigorous and Fair Competition Among Registrars
I. Privacy Interests of Domain Name Holders
J. Fair Business Practices
K. Intellectual Property Issues
L. Application and Accreditation Fees
M. Termination of the Accreditation Agreement, Renewal, and
Arbitration of Disputes with ICANN
N. No Economic Regulation
O. Selections for the Testbed
<PAGE> 2
III. PROPOSED REGISTRAR ACCREDITATION GUIDELINES
A. Qualifications
B. Ineligibility
C. Disqualification
IV. PROPOSED ACCREDITATION AGREEMENT TERMS
V. PROPOSED CRITERIA FOR SELECTION OF TESTBED REGISTRARS
I. INTRODUCTION
A. Purpose
This document has been prepared by the Internet Corporation for Assigned Names
and Numbers (ICANN) for the purpose of soliciting comment from the Internet
community on the subject of guidelines for the accreditation of Internet domain
name registrars. Under the terms of the U.S. Government's Statement of Policy on
the Management of Internet Names and Addresses, and ICANN's Memorandum of
Understanding with the U.S. Department of Commerce, ICANN has the responsibility
for developing such guidelines. The guidance contained in these documents is set
forth in Section I.B. below.
These guidelines have been developed at this time to meet the substantive and
timing requirements of the opening of the .com, .org and .net registries to
competitive registration services, as set forth in Amendment 11 to the
Cooperative Agreement between Network Solutions, Inc., and the U.S. Government.
Parties desiring to be accredited as registrars may also apply to become one of
the five registrars selected to take part in the Shared Registry System test,
also called for in NSI's agreement with the U.S. Government, beginning in April,
1999.
Over the longer term, ICANN believes that guidelines such as these will be of
value to the Internet community in encouraging sound business practices,
promoting robust competition in domain name registration services and protecting
the stability and operational integrity of the Internet. ICANN intends to
consult with the worldwide Top Level Domain (TLD) registry administrators and
other interested parties to determine any unique requirements that may differ
from those which have been used in developing the guidelines in connection with
the introduction of competition in the .com, .net and .org registries.
Public comment on this document is welcome and may be made in electronic form
via email to [email protected]. All comments will be acknowledged. If
you do not receive an acknowledgement of receipt, please contact Molly Shaffer
Van Houweling, [email protected].
<PAGE> 3
All comments will be posted on the ICANN website for public review and response.
Comments received by midnight, U.S. West Coast time, February 26, will be
considered by the ICANN Board of Directors in advance of any consideration of
these matters at the March 4 ICANN Board meeting in Singapore. The ICANN Board
will also consider and respond to comments made at its public forum on March 3
in Singapore. (For details see http://www.icann.org/singapore.html.)
B. Background
U.S. President Clinton, as part of his Administration's activities in support of
global electronic commerce, announced a process leading to the privatization of
the domain name system (DNS) in a directive dated July, 1997. Subsequently, the
U.S. Department of Commerce issued a Request for Comment and after receiving
public comment, developed "A Proposal to Improve the Technical Management of
Internet Names and Addresses," known as the Green Paper, in January, 1998
(published in 63 Fed. Reg. .8826-33 (Feb. 20, 1998)). A principal aim of the
Green Paper was to "privatize the management of Internet Names and Addresses in
a manner that allows for the development of robust competition and facilitates
global participation in Internet management." (U.S. Department of Commerce,
"Management of Internet Names and Addresses," (White Paper) describing the Green
Paper.)
Among the factors cited in the Green Paper as requiring change in DNS management
was, "There is widespread dissatisfaction about the absence of competition in
domain name registration."
Among other steps to enhance competition, the Green Paper proposed moving the
system for registering second level domain names into a competitive environment
by creating two market driven businesses: registration of second level domain
names and the management of gTLD registries.
Following further public comment, the Green Paper was substantially revised and
an updated version was issued in June, 1998, as "Management of Internet Names
and Addresses," known as the White Paper (published in 63 Fed. Reg. 31741-51
(June 10, 1998).
The White Paper stated the U.S. Government's view that a new, non-profit
corporation, rather than the U.S. Government "should establish minimum criteria
for registrars that are pro-competitive and provide some measure of stability
for Internet users without being so onerous as to prevent entry by would-be
domain name registrars from around the world."
Subsequently, on November 25, 1998, the Department of Commerce entered into a
Memorandum of Understanding/Joint Project Agreement with ICANN, under which the
parties are jointly designing, developing, and testing the mechanisms, methods,
and procedures necessary to transition management responsibility for DNS
functions to the private sector.
Under the Joint Project Agreement, ICANN's responsibilities include the
following:
<PAGE> 4
C.3 Collaborate on the design, development and testing of a plan for
introduction of competition in domain name registration services,
including:
a. Development of procedures to designate third parties to
participate in tests conducted pursuant to this agreement.
b. Development of an accreditation procedure for registrars and
procedures that subject registrars to consistent requirements
designed to promote a stable and robustly competitive DNS, as set
forth in the Statement of Policy.
Beginning in December, 1998, a staff-led working group developed this draft
document for review and comment by interested parties and the Internet community
at large. The drafting process included the identification of goals and
principles for registrar accreditation, a definition of the essential elements
of accreditation, and the guidelines and requirements themselves. These points
are discussed in the following sections of this document. Many elements of this
document reflect previous work within the domain name community and the comments
of many individuals in the community, all of which are appreciated.
C. Schedule for Implementation of Shared Registry System
NSI is developing a Shared Registration System and is scheduled to implement
that system on April 26, 1999, as a testbed in which five ICANN-accredited
registrars will be permitted to submit Second Level Domain (SLD) registrations
for the .com, .net, and .org TLDs. On June 25, 1999, the NSI SRS will be opened
up to entry of SLD registrations by all ICANN-accredited registrars.
To accredit registrars for participation in the NSI SRS system, the following
schedule is proposed:
<TABLE>
<S> <C>
February 8, 1999: These proposed accreditation requirements and
criteria for selection of five testbed registrars
are posted on ICANN's web site
(http://www.icann.org). Prospective registrars may
begin preparing applications, but are cautioned that
these proposed accreditation requirements and
testbed registration selection criteria may be
revised by ICANN in response to public comments
before adoption.
March 2-4, 1999: The ICANN Board of Directors will meet in Singapore
with the intention of adopting registrar
accreditation requirements and testbed registrar
selection criteria. In conjunction with
</TABLE>
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<TABLE>
<S> <C>
this meeting, a public forum will be held on the
issues raised by this proposal.
March 8, 1999: If an accreditation program is approved at the
Singapore Board of Directors meeting, the adopted
accreditation requirements and the testbed registrar
selection criteria will be posted on ICANN's web
site (http://www.icann.org). After this date,
applications for accreditation may be submitted in a
manner to be specified by March 8.
March 1999: If interest warrants, ICANN will hold a workshop for
prospective registrars in Los Angeles (and provide
any information distributed at the workshop to those
who cannot participate in person). Please consult
the ICANN web site (http://www.icann.org) for
further announcements.
March 23, 1999: Applicants seeking to participate as registrars
during the testbed period (April 26-June 25, 1999)
should submit applications for registrar
accreditation by this date. Applications seeking
selection for testbed participation must be
accompanied by payment of the designated application
fee.
March 31, 1999: A list of the applicants selected to be testbed
registrars will be posted on ICANN's web site
(http://www.icann.org).
April 26, 1999: NSI will establish the SRS testbed supporting a
total of five accredited registrars. NSI will
participate as registry administrator but, to
enhance Internet stability, during this test will
continue acting as a registrar on a legacy basis
rather than as one of the testbed registrars. After
the test is completed, NSI will provide equal access
to registry services to all licensed accredited
registrars, including NSI.
June 25, 1999: The SRS will be deployed and available to all
licensed accredited registrars.
October 25, 1999: NSI will have completed reengineering of
</TABLE>
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<TABLE>
<S> <C>
NSI's registry administrator/registrar interface and
backend systems, to ensure equal access to all
licensed accredited registrars.
</TABLE>
D. Goals and Principles of Registrar Accreditation
The Internet Domain Name System (DNS) provides functions necessary for virtually
all Internet activities. If the Internet is to continue to grow, DNS services
must be reliable, secure and cost effective.
A major goal of an Internet registrar accreditation system, therefore, is to
establish and apply criteria for the business and technical environment and
processes of registration such that stability of the DNS is maintained while at
the same time encouraging robust competition in the delivery of registration
services.
The following list of principles is intended to provide a basis for the
development of specific accreditation guidelines. Public comment on the
principles is solicited.
1. The registration system should be convenient and easy to use from the
perspective of individuals or organizations wishing to use domain names.
The system should allow portability of domain name registration from one
registrar to another without disadvantage to the domain name holder, and
should put all registrars on a level playing field with regard to access
to registries.
2. The registration process should embrace standard principles of good
business practice, including legally enforceable commitments by the
parties to the registration agreement. To the extent feasible, it should
contain procedures designed to prevent or minimize fraud or other forms
of illegal behavior associated with the assignment of a domain name, and
to ensure that the registrar's obligations to its customers and to the
registry administrator will be fulfilled in the event that the registrar
goes out of business or otherwise fails to perform.
3. The registration agreement should protect legal rights (including
intellectual property rights) of the parties, and of third parties where
applicable. It should contain provisions that minimize disputes over
rights to use of particular domain names, and in the event of dispute, it
should contain provisions that enhance the orderly and timely resolution
of disputes.
4. The information obtained from applicants for domain names should
include only the data elements reasonably needed for the assignment and
use of the name. Registrars and other parties acquiring, storing and
using such information should be bound by reasonable privacy principles,
consistent with facilitation of dispute resolution and law enforcement.
Domain name applicants should have an opportunity to register names on
behalf of third parties who wish to remain anonymous.
<PAGE> 7
5. The registration system should promote worldwide access to domain name
registration services and encourage the development of alternative
business models for successful registration services.
E. Issues in Development of Guidelines
The development of accreditation guidelines for DNS registrars necessarily
touches on many contentious issues, some of which have been debated in the
international Internet community for years. The following specific matters have
been considered and preliminary conclusions incorporated in these draft
guidelines. Further comments and suggestions are welcomed.
1. Relationship of SRS testbed guidelines to permanent guidelines and to
all DNS registries and registrars.
The DNS Green Paper and White Paper processes of the U.S. Government
established a goal of community self-governance of the DNS system by a
private non-profit corporation that is representative of the global and
functional diversity of the Internet. The White Paper sets a two year
timetable in which ICANN is expected to go from startup to a stable and
well-supported organization with responsibility for administering the
full range of DNS management issues including development of policy for
Internet names and addresses. Separately, but on a parallel track, the
U.S. Government has negotiated an extension and amendment to its
cooperative agreement with Network Solutions, Inc., that provides for the
opening up of the .com, .org and .net registries to competitive registrar
services. As a first order of business, ICANN has the responsibility for
supporting the introduction of competition through the development of
accreditation guidelines and selection of testbed registrars. This
process, although carried out under tight time constraints, will provide
a valuable opportunity for all existing registry administrators and
registrars to determine the ongoing utility of accreditation, and the
applicability of accreditation more widely in the Internet, including in
multiple legal venues and in different policy regimes around the world.
ICANN expects to consult widely during coming months with registry
administrators, registrars, and other interested parties on their
individual and collective views of accreditation. This process will also
include the ICANN Domain Name Supporting Organization (DNSO) at such time
as it is recognized.
2. Establishing islands of stability in a sea of uncertainty
Many observers have commented on the numerous policy and operational
uncertainties facing the Internet DNS. Among other important issues
associated with uncertainty is the inhibiting effect it has on investment
in electronic commerce. It is therefore important to proceed on a
pragmatic basis in establishing these guidelines without waiting for a
synthesis of the total future system of domain names, namespaces and
addresses. Thus, ICANN recognizes that the points of stability
established in accreditation guidelines must exist, for a period of time,
in a larger context of uncertainty.
<PAGE> 8
3. Balancing accreditation requirements with costs of administration
Any system of accreditation will impose administrative costs on both
ICANN and those wishing to obtain accreditation and enter the
registration business. These draft guidelines are intended to represent a
set of common requirements and standards that enables the maximum number
of qualified businesses to enter the registrar business while at the same
time minimizing the associated administrative burdens. ICANN invites
comment from interested parties as to whether the appropriate balance has
been struck in the draft guidelines, and in what specific ways the
guidelines could be revised to improve this balance.
4. The special requirements of domain name contact information
Because of the special function that domain names play in identification
of Internet hosts, it has been the case for many years that appropriate
contact information is required of all domain name holders. As the
Internet grows and evolves, the DNS must continue to serve not only the
legitimate business needs of registry administrators, registrars and name
holders, but also operational needs associated with addresses, routing
and related requirements. ICANN seeks comment from interested parties as
to the future role of contact information and database systems, such as
the Whois or similar systems. Pertinent questions include the extent to
which existing contact information requirements should be revised in
light of newly enacted privacy statutes and regulations in several
countries and the European Union; how to handle requests for use of
contact information in marketing and other activities not directly
related to the DNS; and the extent to which, if at all, the historically
commingled technical and administrative contact information should be
segregated and dealt with separately.
II. COMMENTARY ON PROPOSED GUIDELINES
To promote detailed and focussed public comments and discussion concerning these
proposed guidelines, this section describes the contemplated structure of the
domain name registration business and analyzes the twin goals of preserving the
operational integrity of the Internet and introducing competition into the
registration business. It then outlines the general approach of the proposed
accreditation program for achieving these goals and discusses, on a
topic-by-topic basis, the major elements of the proposal. In the discussion,
public comment is expressly requested on several issues relating to the proposed
guidelines. Those requests, of course, are not meant to be limiting and the
public is invited to submit comments on all aspects of this proposal and the
issues it is intended to address.
A. Contemplated Structure of the Domain Name Registration Business
<PAGE> 9
The DNS incorporates a hierarchical system of delegated responsibility for
assignment of domain names. In the early days of the DNS, a single entity was
ordinarily responsible for accepting requests for name assignments within any
given domain and placing the assigned names in a database, or DNS registry, for
that domain. Currently this model is followed with respect to the .com, .net,
and .org TLDs, with NSI acting under a cooperative agreement with the U.S.
Government both to accept requests for assignment of SLDs in those TLDs and to
insert the resulting assignments into a DNS registry which it administers.
There has been widespread dissatisfaction in the Internet community and a call
for the introduction of competition. To introduce competition to the greatest
extent possible, while recognizing that under currently employed technology it
is not practical to divide responsibility for operating the registry (database)
for a single domain, in its Green Paper and White Paper the U.S. Government
adopted a model in which the provision of domain name registration services is
segmented into registry- and registrar-level services. As explained in the Green
Paper:
In this connection, we distinguish between registries and registrars. A
"registry," as we use the term, is responsible for maintaining a TLD's
zone files, which contain the name of each SLD in that TLD and each SLD's
corresponding IP number. Under the current structure of the Internet, a
given TLD can have no more than one registry. A "registrar" acts as an
interface between domain name holders and the registry, providing
registration and value-added services. It submits to the registry zone
file information and other data (including contact information) for each
of its customers in a single TLD.
By segmenting the domain name registration business in this manner, it is
possible to introduce robust competition into the registrar segment while still
accommodating the need for unified operation of the registry serving a single
TLD.
In the White Paper this segmented model was carried forward with a strong
endorsement for introducing intra-TLD competition in the registrar segment and a
qualified endorsement for introducing inter-TLD competition in the registry
segment. Based on the considerable diversity of comments received on the issue
of competition among registries, the White Paper indicated that the Internet
community should decide whether competition should be introduced into that
segment.
These proposed guidelines are built on the same segmented model for the
provision of domain name registration services, although with one minor change
in terminology. To help distinguish between the database of the names registered
in a domain and the operator of that database, the former is referred to as the
"registry" and the latter as the "registry administrator." Thus, the model that
this proposal addresses can be diagrammed as follows:
Domain name holder ------> Registrar ------> Registry administrator
As described in more detail below, to promote competition while ensuring the
stability of the Internet, this proposal suggests a program for accreditation of
registrars and contemplates that
<PAGE> 10
in the future a program for accreditation of registry administrators will be
implemented. Although this proposal recognizes that, in some instances,
"resellers" intervene between the domain name holder and the registrar, the
proposal operates on the assumption that there is no need for accreditation of
resellers because registrars will effectively pass the obligations associated
with accreditation on to resellers. Accordingly, this proposal does not make any
allowance for such accreditation.
To assist in its consideration of the registrar accreditation program proposed
here, ICANN requests public comment on the following issues:
Q1. Is the segmented model for the provision of domain name registration
services described above appropriate? How could or should it evolve over
time?
Q2. Are there any reasons why resellers should be accredited?
B. The Goals: Preserving the Stability of the Internet and Introducing
Competition
The U.S. Government's White Paper sets forth preserving the stability of the
Internet and introducing competition into the provision of domain name
registration services as two of the primary goals that should govern the
technical management of the Internet.
In the context of accrediting registrars for the DNS, a fundamental aspect of
stability is that universal and durable connectivity should be preserved, so
that domain name holders have reasonable assurances that their domain names will
resolve to the IP addresses of their host computers throughout the Internet and
without interruption. Correspondingly, the introduction of effective competition
fundamentally requires both that domain name holders throughout the world have a
reasonable number of registrars with which they may initially register domain
names and that domain names be portable, so that on renewing their registrations
domain name holders have a choice of registrars in accomplishing the renewal.
The proposed accreditation program also seeks to promote other principles drawn
from discussions in the Internet community and the White Paper. These principles
include those enumerated in Section I.D. above, namely: making domain name
registration simple and promoting adherence to basic standards of fair dealings
with consumers and among competing registrars; minimizing fraud and damage to
customers caused by business failure; protecting intellectual property and other
legal rights of third parties and minimizing disputes; accommodating the privacy
of domain name holders; and promoting worldwide access to domain name
registration services and encouraging the development of alternative business
models for successful registration services.
Q3. In the context of accrediting registrars for the DNS system, is
preservation of universal and durable resolution of domain names an
important requirement for preservation of the Internet's stability? Are
there other stability issues that are particularly relevant in that
context?
<PAGE> 11
Q4. What conditions, other than the availability worldwide of a
reasonable number of alternative registrars and easy portability of
domain names, are important to the introduction and maintenance of robust
competition in the provision of registrar services?
Q5. Are there significant principles in addition to those stated above
that domain name registrar accreditation should seek to promote?
Q6. At what stage should requirements for accreditation of registry
administrators be introduced?
C. Overview of the Approach to Meet These Goals
To achieve the goals of preserving stability and introducing competition, these
accreditation guidelines set forth qualifications that prospective registrars
must meet to be accredited (see Section III below) and establish requirements,
embodied in accreditation agreements, they must abide by while they are
accredited (see Section IV below). In addition, because phase 1 of the
implementation of the Shared Registration System will be a testbed in which only
five registrars will participate, these guidelines set forth criteria for
selection of the testbed registrars (Section V below).
The qualifications for accreditation are intended to assure that all accredited
registrars have the capability to perform the function of registrar. At the same
time, to allow the greatest possible number of qualified applicants to
participate in the registrar business, great care has been taken to avoid
setting needlessly high standards or pointless arbitrary thresholds. Instead, as
discussed in the commentary in Section II.D below, the requirement is that
applicants show the basic capabilities, or present a reasonable business plan
for acquiring the capabilities, to adequately service a reasonably projected
customer demand.
The proposed agreements between ICANN and the registrars confer accreditation on
the registrars and at the same time establish basic registrar obligations that
will permit ICANN to establish a system that should serve to assure domain name
holders that names they register with accredited registrars will enjoy universal
and durable connectivity, even in the event of a business failure of, or other
problems with, a registry administrator or registrar. In particular, accredited
registrars would be required not only to submit registration data to the
registry administrator, but also to keep the submitted data in electronic form
and periodically escrow it with ICANN. In the event either a registry
administrator or a registrar fails, ICANN would then be able to restore any lost
data to the appropriate registry, so that the ability to resolve the DNS name
remains intact.
The accreditation agreements would also provide consumers basic assurances of
fair dealing by requiring accredited registrars to agree to abide by a Code of
Conduct for DNS Registrars. In addition, the agreements would protect consumers
by setting forth standards for the protection of personal data collected by
accredited registrars and participation by accredited
<PAGE> 12
registrars in a uniform domain name dispute resolution program, in the event one
is adopted in the future.
The accreditation agreements also would seek to ensure fair competition by
ensuring that a registry administrator also operating as a registrar could not
administer the registry in ways that unfairly disadvantage competing registrars.
In addition, the proposed accreditation agreement includes various provisions
relevant to, although not necessarily motivated by, trademark concerns, which
should make it possible to implement promptly most of the provisions in the WIPO
Interim Report, in the event those recommendations are adopted in the future.
The proposed accreditation agreements also provide for funding of ICANN's
operations, including its administration of the accreditation program, through
fees collected at the registrar level. Finally, to give registrars assurance of
fair and equitable treatment, it is proposed that disputes arising under the
accreditation agreements, including disputes concerning termination of those
agreements, will be subject to binding arbitration by an independent,
international arbitral entity.
D. Qualifications of Registrars
The proposed qualifications for accreditation of registrars require (a) that the
registrar demonstrate the basic capabilities to perform its obligations as
registrar, (b) that the registrar not be ineligible due to various conditions
that reflect negatively on the application, and (c) that the registrar has not
been disqualified from accreditation due to past violation of ICANN-established
standards for conduct in the registrar or registry administration businesses. As
noted above, the basic thrust of these qualifications is to ensure that the
applicant for accreditation has the basic capabilities while avoiding
establishing needlessly high standards or pointless arbitrary thresholds.
The proposed demonstration of basic capabilities is set out in Section III.A
below. The fundamental requirement is that the applicant demonstrate current or
reasonably projected business capabilities sufficient to allow the applicant to
act as a registrar handling a reasonably projected volume of business. This
basic requirement is reinforced by requirements that the applicant have
specified levels of general liability insurance and liquid capital and that it
hold an existing SLD that works.
Q7. Should the requirement (Section III.A.1) that applicants demonstrate
general present or future business capabilities be revised to incorporate
more specifically stated thresholds or characteristics (e.g., levels of
employment or backup procedures)? For which aspects of Section III.A.1?
What should the more specific requirements be? If more specific
thresholds or characteristics should be incorporated for some aspects,
should those thresholds or characteristics be absolute minimum
requirements, or should they be "safe-harbors" that would automatically
satisfy certain aspects of Section III.A.1? (As an example of a "safe
harbor," a
<PAGE> 13
showing that the applicant has the equivalent of five full-time employees
could be deemed to satisfy the employee requirement stated in Section
III.A.1.j.)
Q8. Is it appropriate to have a specified threshold of required
commercial general liability insurance coverage? A requirement of
US$500,000 is being considered. Is that level about right, too high, or
too low? Should the required level vary by the location of the registrar
to account for different liability risks in different parts of the world?
Q9. Is it appropriate to require that a specified level of liquid capital
be available to the applicant, or is it sufficient to have a more general
requirement such as that in Section III.A.1.i? A specified level of
US$100,000 in liquid capital is being considered. Is that level about
right, too high, or too low? What effect would a requirement at that
level have on the degree of competition? Should the required level vary
based on the country in which the applicant is located? By the type of
business model the applicant follows or proposes?
Q10. Are the grounds for ineligibility set forth in Section III.B
adequate to protect consumers and the registry administrator from
unscrupulous registrars?
Q11. Are any of the grounds for ineligibility set forth in Section III.B
likely to significantly diminish the number of applicants eligible for
accreditation?
Q12. ICANN presently has not concluded whether its accreditation
responsibilities will be performed by its own staff or by a qualified
outside agency. Does a decision on this issue have a potentially
significant impact on the proposed accreditation process?
E. ICANN's Relations with Registry Administrators and Registrars, and the
Special Case of .com, .net, and .org
Earlier models for segmenting the domain name registration business envisioned
that accreditation and related requirements for providers of domain name
registration services would flow down from the central coordinator (presently
the U.S. Government and ICANN acting jointly through their MOU/Joint Project
Agreement), through the registry administrators, to the registrars. This
proposal does not adopt that model, but instead envisions that the central
coordinator would directly accredit and establish requirements for both the
registry administrator and the registrars.
There are two reasons for this direct-accreditation approach. The first arises
from the contractual structure under which registration services are being
provided in the .com, .net, and .org TLDs. NSI acts as registry administrator
under a cooperative agreement with the U.S. Government. That cooperative
agreement already performs an accreditation-like function for the registry
administrator. (Under Amendment 11, the U.S. Government's role in this regard
will eventually be transitioned to ICANN.) The cooperative agreement (as
<PAGE> 14
amended in Amendment 11), however, provides that ICANN, not NSI, will perform
the function of accrediting registrars. It also provides that the U.S.
Government will require ICANN to "subject registrars to consistent requirements
designed to promote a stable and robustly competitive DNS, as set forth in the
Statement of Policy [White Paper]." Thus, the cooperative agreement between NSI
and the U.S. Government expressly provides that ICANN, rather than NSI, directly
accredit and establish requirements for registrars in the .com, .net, and .org
TLDs.
The second reason for the direct-accreditation approach is the significant
competitive concerns potentially raised by NSI (as registry administrator)
imposing requirements on registrars. NSI has indicated that it intends to
continue to act as a registrar for the .com, .net, and .org domains. In view of
this intention, the propriety and legality of NSI establishing requirements for
other registrars, with which it will be directly competing, is subject to
question. While Amendment 11 to the NSI-U.S. Government cooperative agreement
requires NSI to separate its registry administration and registrar functions,
many have expressed concerns that, based on experience in other industries, such
separation requirements are not sufficient to ensure vigorous competition.
For these reasons, the proposed guidelines provide that ICANN will directly
accredit, and establish requirements for the conduct of, registrars in the .com,
.net, and .org TLDs, including NSI. These guidelines assume that NSI as registry
administrator will enter contracts with accredited registrars. They also assume
that the scope of those agreements would include (a) licensing the registrars to
the intellectual property involved in the SRS, (b) providing for pricing
(subject to approval by the U.S. Government) for registry usage by registrars,
(c) providing for appropriate security for payment by registrars, and (d) other
provisions, if any, necessary to protect NSI from legal liability as registry
administrator due to registrars' activities.
In proposing this direct accreditation approach, it is recognized that
arrangements used for other TLDs, such as those in which a cooperative
association of registrars administers the registry, present different
circumstances under which accreditation and regulation by the registry
administrator may be entirely appropriate.
Q13. Where the registry administrator is also a registrar, is direct
accreditation of registrars an appropriate role for ICANN, or should
accreditation flow through the registry administrator?
Q14. If direct accreditation is necessary to address competitive concerns
raised by the registry administrator also acting as a registrar, do the
draft guidelines provide adequate protection?
Q15. If the draft guidelines do not provide adequate protection, what
additional measures could be taken to implement the equal access
provisions of Amendment 11?
Q16. What special measures, if any, should be taken to monitor the
registry administrator's activities to ensure that all registrars get
equal access to the registry?
<PAGE> 15
F. Submission of Registrations by Registrars, Data Escrow, and Rights in Data
The terms of the proposed accreditation agreement provide that the registrar, in
return for accreditation, would submit all registration data, including contact
data, to the registry administrator for the appropriate TLD. The data to be
submitted essentially includes the data in the current Whois database other than
the billing contact, which is not relevant to the registry administrator for the
public.
Q17. Are the data elements to be submitted by registrars to the registry
administrator appropriately specified?
Accredited registrars would also be required to keep their own electronic copies
of submitted data, so that the registry could be reconstituted in the event the
registry administrator goes out of business, loses its accreditation, or suffers
a catastrophic technical failure. Accredited registrars would also provide
updated electronic copies of registration data on their active customers to
ICANN or an escrow agent each month, so that in the event of a failure of the
registrar there is a means to assure the registrar's customers of durable
connectivity.
Q18. Is monthly an appropriate period for data escrow by accredited
registrars? Should more frequent or incremental escrows be required?
Accredited registrars would also be required to keep comprehensive records
concerning their dealings with customers, subject to inspection by ICANN, so
that in the event a registrar went out of business or lost accreditation these
records could be transferred to a successor registrar in as orderly a manner as
possible. (See Section IV.4.)
Q19. Should all registrar electronic records concerning dealings with
customers be subject to a data escrow requirement?
Proposed Section IV.5 deals with rights in domain name registration data. It
provides, first, that registrars disclaim any exclusive rights to the DNS's
basic mapping of domain names to IP addresses. This mapping data is needed
throughout the Internet and it is inappropriate for anyone to claim ownership in
this data. Second, it provides that the registrar (rather than the registry
administrator) can claim exclusive rights to contact information and other
elements of registration data, but that any such claim would be subject to two
types of licenses.
The first proposed license would be to ICANN to use the data to permit it to
sublicense the data to another registrar in the event that the accreditation
agreement of the registrar claiming rights in the data is terminated or expires
without renewal. This provision allows transfer of responsibility for the
registrations of a failed registrar's customers to a substitute registrar. The
second proposed license would be to allow contact information to be used in
Whois servers on a non-bulk basis.
<PAGE> 16
Q20. Should registrars be prohibited from claiming rights in the
registration data they generate?
Q21. Should registrars' claims to rights in registration data be subject
to a Whois license for ICANN-designated Whois servers only, or should
registration data be freely available to all operators of Whois servers?
What other restrictions, if any, should be placed on the data?
G. Whois Service
Currently, under its cooperative agreement with the U.S. Government, NSI
operates the Whois server for the .com, .net, and .org TLDs. As part of
implementation of the shared registration system, NSI as registry administrator
agreed to maintain only a limited Whois service, which provides a common user
interface and refers Whois queries to remote Whois servers operated by the
accredited registrars that placed the queried records in the registry. The
limited Whois database service provided by NSI as registry administrator would
only contain the domain name, the IP address and server name, and the (hidden)
identity of the responsible registrar.
Many have expressed concerns, both technical and competitive, over NSI's
limiting of Whois service. Some have raised the concern, for example, that
requiring all accredited registrars to operate Whois servers on a 7/24 basis
would needlessly raise entry barriers and limit competition in the registrar
business, particularly from smaller potential entrants, including non-profit
organizations. Another competitive concern that has been voiced is that NSI's
proposal might reduce domain name portability by facilitating incumbent
registrars in dissuading customers from changing registrars.
In view of these and other concerns, the appropriate evolution of the Whois
service is being reevaluated. Possibilities include following NSI's proposal,
having NSI continue to provide Whois service as registry administrator, or
selecting another operator for a centralized Whois service. These proposed
guidelines do not seek to affect this reevaluation, but instead are designed to
accommodate whatever plan for provision of Whois services is chosen as a result
of the reevaluation. Thus, the proposed guidelines provide that the data to be
provided to the registry administrator and the data rights provisions may be
suitably adjusted to fit the Whois model that is ultimately adopted.
H. Vigorous and Fair Competition Among Registrars
The fact that NSI will continue to serve as registry administrator and will also
be a registrar presents some potential threats to robust competition. In
Amendment 11 to its cooperative agreement with the U.S. Government, NSI agreed
to provide all accredited registrars with equal access to its registry services,
provided they have acquired a license from NSI for the shared registration
system. In addition, NSI agreed to employ safeguards to ensure that
<PAGE> 17
revenues and assets of its registry-administration operations do not financially
advantage its registrar activities to the detriment of other registrars.
Although those provisions do address the competitive advantages inherent in the
registry administrator also acting as a registrar, some have expressed concern
that without more specific implementation they do not completely level the
playing field among NSI and other accredited registrars. The proposed
accreditation agreement contains supplemental implementing provisions requiring
that, if the registry administrator also acts as a registrar, it must abide by
specific additional requirements to promote fair and robust competition with
other registrars. (See Section IV.7.)
Two of these provisions (Sections IV.7.a & b)) preclude the registry
administrator's registrar operation from exploiting its potentially superior
access to registry data to its competitive advantage. The other provision
(Section IV.7.c) requires that the registry administrator treat registration
submissions from the various registrars on an equitable basis. Specifically,
available domain names should be initially registered by registrars on a
first-come/first-served basis (provided the domain name holder is legally
entitled to use the name) and domain name holders should be afforded an
opportunity to renew their registrations through the registrar of their choice,
for limited periods for so long as they are lawfully using the names that they
have registered.
Q22. Are the proposed requirements in Section IV.7 appropriate to promote
fair access to the registry? Should other similar implementing
requirements be set forth?
I. Privacy Interests of Domain name Holders
The proposed accreditation agreement embodies provisions designed to ensure
uniform application by accredited registrars of fair practices for the handling
of personal data obtained from the registrars from applicants for domain names.
(Sections IV.8 & IV.9.g.ii-vi.) These provisions are also designed to facilitate
compliance by registrars with the European Union's Data Protection Directive and
similar privacy requirements. Finally, the last paragraph of proposed Section
IV.9.g.i would provide a mechanism for anonymous holding of SLDs, while at the
same time ensuring that accurate contact information is available to those who
need it for a legitimate purpose.
Q23. Does the uniform application of the fair information practices
concerning personal data impose undue burdens or restrictions on
registrars or the registry administrator? Should greater protections be
required for personal data provided by domain name holders?
Q24. Does the proposed mechanism for anonymous holding of SLDs adequately
ensure that accurate contact information is available as required for
proper operation of the Internet?
<PAGE> 18
Q25. Does the proposed mechanism for anonymous holding of SLDs adequately
accommodate the legitimate interests of law enforcement authorities and
those seeking to enforce trademark and other rights?
J. Fair Business Practices
The proposed guidelines require accredited registrars to adhere to certain
standards of conduct in operating their business. Among other things, accredited
registrars would abide by a Code of Conduct for DNS Registrars (Section IV.9.a),
which would be developed by an organization of registrars and registry
administrators and would be designed to ensure that registrars deal fairly with
their customers and the public. That organization would be principally
responsible for enforcement of this Code, although it may be appropriate to give
customers and the public resort to some review mechanism. This Code is being
proposed both to protect consumers and to enhance consumer confidence in the
domain name registration business and the accreditation system.
Q26. Is it advisable to have a Code of Conduct that establishes basic
standards of fair business practices to which accredited registrars must
adhere?
Q27. Should a registrar/registry administrator organization have the
principal responsibility for formulation of the Code of Conduct? Should
that responsibility instead be assigned to ICANN or some other body?
Q28. What standards of conduct should be in the Code of Conduct? A
proposed Interim Code of Conduct for DNS Registrars, to be used until the
organization of registrars and registry administrators becomes
operational, is currently being prepared and will be posted before the
Singapore meeting. Early written comment on this issue would be
especially appreciated.
Q29. How, and by what entity, should the Code of Conduct be enforced?
Should enforcement decisions be subject to review and, if so, by what
mechanism?
In addition to the Code of Conduct, accredited registrars would be required to
comply with all applicable laws and would be prohibited from representing that
they enjoy access to any registry that is superior to that of any other
accredited registrar.
K. Intellectual Property Issues
Intellectual property issues, particularly trademark issues, have figured
prominently in discussions in the past few years regarding the DNS system and
how it should be managed. In accordance with the White Paper, the U.S.
Government asked the
World Intellectual Property Organization (WIPO) to initiate a balanced
and transparent process, which includes the participation of trademark
holders and members of the Internet community who are not trademark
holders, to (1)
<PAGE> 19
develop recommendations for a uniform approach to resolving
trademark/domain name disputes involving cyberpiracy (as opposed to
conflicts between trademark holders with legitimate competing rights),
(2) recommend a process for protecting famous trademarks in the generic
top level domains, and (3) evaluate the effects, based on studies
conducted by independent organizations . . . of adding new gTLDs and
related dispute resolution procedures on trademark and intellectual
property holders.
In response to this request, WIPO has convened an extensive international
process (see http://wipo2.wipo.int/process/eng/processhome.html) to develop
recommendations concerning the intellectual property issues associated with
Internet domain names, including dispute resolution. On December 23, 1998, WIPO
published an interim report containing recommendations on many issues and
scheduling other issues for further study.
ICANN's full consideration of the WIPO recommendations should await the final
WIPO report. However, many of the WIPO recommendations appear to serve the goals
of the accreditation process, particularly where the provisions also address
functional (i.e. non-trademark) needs of the DNS. In these cases, provisions
similar to the WIPO recommendations have been included in this proposal. These
include:
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------
Proposed Term of WIPO
Accreditation Agreement Recommendation(s) Subject
- -----------------------------------------------------------------------------------------------------
<S> <C> <C>
Section 9.d 67 Prepayment of registration fee
- -----------------------------------------------------------------------------------------------------
Section 9.e 69 Registration for fixed periods
- -----------------------------------------------------------------------------------------------------
Section 9.f 218 Excluded SLD names
- -----------------------------------------------------------------------------------------------------
Section 9.g 46 Written registration agreement required
- -----------------------------------------------------------------------------------------------------
Section 9.g.i 50, 57, 101 Contact information
- -----------------------------------------------------------------------------------------------------
Section 9.g.vi 53 Representation by domain name holder
that use will not infringe third party's
legal rights
- -----------------------------------------------------------------------------------------------------
Section 9.g.vii 119 Domain name holder's consent to
jurisdiction
- -----------------------------------------------------------------------------------------------------
Section 9.g.viii 146, 158 Suspension, cancellation, or transfer of
SLD assigned by mistake or where there
is a dispute
- -----------------------------------------------------------------------------------------------------
</TABLE>
As will be noted by reviewing the proposed terms, many of the WIPO-recommended
provisions have been altered to address functional issues as well as trademark
issues.
<PAGE> 20
Q30. Should the guidelines limit the duration (e.g., two years) for which
SLDs can be registered?
Q31. Would the prepayment requirement hinder any otherwise realistic and
desirable registrar business models?
Q32. Should the durable connectivity assurance (against insolvency of
registrars) be limited to a specified length of registration?
Q33. Should other WIPO recommendations be implemented in these proposed
guidelines?
L. Application and Accreditation Fees
Under these proposed accreditation guidelines, there would be both application
and accreditation fees. Application fees would be non-refundable and intended to
reflect ICANN's costs of processing the applications. For initial applications,
the proposed application fee is US$2500 for applicants seeking to be selected as
testbed participants and US$1000 for all other applicants. The higher cost for
testbed applications reflects the fact that those applications will require more
intensive review and will require application of the testbed registrar selection
criteria set forth in Section V below. Renewal application fees would be
established later, after experience is gained regarding the time and effort
required to process renewal applications.
Q34. Because there has not yet been any experience in processing
applications, the proposed application fee levels are necessarily rough
estimates. Comments on the appropriate fee level to defray processing
costs are invited.
The proposed accreditation fees would consist of fixed and variable
(per-registration) components and are intended to be one source of funding for
ICANN's operations, including the proposed accreditation program and the
associated program to assure durable connectivity through data escrows. The
fixed component of the fee would be established initially and would be payable
upon entry into the accreditation agreement. It would be intended to cover fixed
costs occasioned by accreditation of the registrar without regard to its
registration volume. It is currently contemplated that the fixed component would
be initially in the US$3000-US$6000 range.
Under the proposal, accredited registrars would pay the variable component
monthly to ICANN based on the number of initial and renewal SLD registrations
they enter into the registry beginning in July 1999 (the first month of ICANN's
first full fiscal year). The amount due per registration-year would be
established in ICANN's annual budgeting process, in which fees and charges are
established with "the goal of fully recovering the reasonable costs of the
operation of [ICANN] and establishing reasonable reserves." (See ICANN Bylaws,
Article XI, Section 4(b).) To provide greater certainty to prospective
registrars
<PAGE> 21
considering entering the business, this proposal would stipulate that the
variable component would not exceed US$1.00 per registration-year.
Q35. Are there any practical problems presented by collection of
per-registration fees at the registrar level?
Q36. Is it appropriate to have both fixed and variable components of the
accreditation fee?
Q37. At what level should the fixed component be set? Should the level
vary based on the country in which the registrar is located?
Q38. Is there some measure other than registration-years on which the
variable component should be based?
Q39. Is it beneficial to state a cap on the rate at which the variable
component is computed, to allow registrars to better assess their
prospects in the business?
M. Termination of the Accreditation Agreement, Renewal, and Arbitration of
Disputes With ICANN
Section IV.12 specifies seven circumstances in which it is proposed that a
registrar's accreditation agreement could be terminated before its expiration.
As will be noted, these circumstances are specific and extraordinary, so that
the accredited registrar has reasonably clear guidance as to what it must do to
preserve its accreditation. Termination in any of these circumstances would
occur only after the registrar is afforded fifteen-days notice and an
opportunity to initiate arbitration during that time (see immediately below). In
urgent situations, a temporary suspension of accreditation would also be
possible.
Q40. Are the stated grounds of termination appropriate? Can they be made
more specific while still preserving their utility?
Q41. Should additional grounds of termination be added?
Q42. Is fifteen days notice sufficient to allow a registrar to initiate
arbitration?
The proposed agreement (Section IV.13) provides for mandatory arbitration of
disputes arising from the accreditation agreement by an international arbitral
body, such as the ICC International Court of Arbitration. This proposal is made
to promote economical and fair resolution of any disputes that may arise with
accredited registrars throughout the world. The disputes subject to arbitration
would include disputes concerning the appropriateness of termination of
accreditation agreements.
Q43. Is there any type of dispute arising from a registrar's
accreditation agreement that should not be subject to arbitration?
<PAGE> 22
Q44. What arbitral body should be selected, and what rules of arbitration
should be used?
To maintain accreditation after an accreditation agreement expires, the
registrar would apply for renewed accreditation. (Section IV.14.) Accredited
registrars would not, at least in general, enjoy the benefit of grandfathered
provisions, but instead would have to be re-accredited according to the
then-prevailing accreditation standards and provisions. (Changes in
accreditation standards and provisions are governed by ICANN's Bylaws, which
provide for notice and the opportunity for public comment before adoption of
policies that substantially affect the Internet or third parties.)
Q45. Should registrars seeking renewal of their accreditation be
specially protected from the effects of raised accreditation standards or
changes to the terms of the accreditation agreement?
Q46. Should disputes arising from actions on initial or renewal
applications for accreditation be subject to arbitration? If so, on what
grounds should such actions be reviewable?
N. No Economic Regulation
To foster market-driven competition in the registrar business, the proposed
guidelines contain no limitations or restrictions on the pricing levels or
pricing models employed by accredited registrars. Nor do they restrict
accredited registrars from bundling registrar services with other products. Some
have suggested price caps or prohibitions of price discrimination among various
types of domain name holders. In the belief that those types of restrictions
would hamper, rather than promote, competition, they have not been incorporated
in these proposed guidelines.
Q47. Should the guidelines prohibit accredited registrars from charging
different prices to different categories of customers?
Q48. Should the guidelines require accredited registrars to offer
unbundled domain name registration services?
O. Selections for the Testbed
The plan for implementation of the SRS contemplates a test phase (phase 1) in
which five accredited registrars submit SLDs for registration in a testbed
implementation of the SRS during a two-month test period (April 26-June 24,
1999), followed by later phases (phases 2 and 3) in which the registry is made
available to support submission of SLD registrations to the registry by a larger
number of accredited registrars.
<PAGE> 23
To participate in phase 1, the prospective registrar would have to (a) meet the
requirements for accreditation; (b) enter an accreditation agreement; (c)
specifically note in its application its desire to participate in phase 1; (d)
pay a higher application fee to cover the increased cost of handling the
application; and (e) agree to publish operational information as part of the
test evaluation. In addition, during the test participants will be required to
provide enhanced technical and engineering support to interface with NSI and to
collaborate closely with NSI's registry administration operation and other phase
1 registrars, potentially revealing details of the participants' technical and
business operations.
ICANN recognizes that more than five qualified applicants may seek accreditation
for phase 1. Section V of these proposed guidelines presents proposed criteria
for the selection of registrars for participation in phase 1 (April 26-June 25)
in the event that more than five registrars qualified for accreditation seek to
participate in that phase. Consistent with the nature of phase 1, the primary
criterion for selection would be the applicant's technical and business
capabilities to support the test and its willingness to commit the resources and
to collaborate closely. This will ensure that the SRS is successfully tested.
Secondary considerations include the extent to which the applicant's
participation would promote early robust competition, wide geographic
availability of domain name registration services, and accommodation of
alternative business models and types (e.g. bank, telco, ISP).
Q49. Are the additional requirements for participation in phase 1 too
burdensome?
Q50. Is the primary selection criterion appropriate?
Q51. In the event that more that five registrars meet the criteria
equally, what mechanism should be used to select among them?
III. PROPOSED REGISTRAR ACCREDITATION GUIDELINES
Under this proposal, an applicant would be eligible for accreditation where the
applicant (a) demonstrated that it possessed specified qualifications that made
it likely that the applicant could perform its obligations as registrar; (b) was
not ineligible due to various conditions that reflected negatively on the
application; and, in the future case of a previously accredited registrar, (c)
had not been disqualified from accreditation in connection with past termination
as an accredited registrar or registry administrator.
A. Qualifications
To qualify for accreditation as a registrar, the applicant would be required to:
1. Demonstrate current business capabilities (including management,
communication, and information systems), or submit a comprehensive
business plan to develop capabilities by the commencement of operation
under accreditation that, in ICANN's judgment, are reasonably suited to:
<PAGE> 24
a. Provide the applicant secure, authenticated access to the
registry.
b. Provide robust and scalable operations capable of handling the
registration volume reasonably projected by applicant.
c. Allow for prompt handling of SLD holders' requests for changes
in registration data.
d. Achieve a reliable and readily usable daily data backup and
archival of all SLD holder and registration data.
e. Maintain electronic copies of all transactions, correspondence,
and communications with the SRS for at least the length of a
registration contract.
f. Provide procedures for information systems security to prevent
malicious or accidental disruption of the applicant's operations.
g. Meet the applicant's obligations under its accreditation
agreement (see Section IV below).
h. Provide procedures that permit applicant's customers to change
registrars without interruption in use of the assigned domain
name.
i. Maintain adequate working capital for the operation of the
registrar business.
j. Have the capacity to engage a sufficient number of qualified
employees to handle the registration, update, and customer inquiry
volume reasonably projected by applicant.
k. Ensure that the registrar's obligations to its customers and to
the registry administrator would be fulfilled in the event that
the registrar went out of business, including ensuring that SLD
holders would continue to have use of their domain names and that
operation of the Internet would not be adversely affected.
2. Demonstrate that it has at least US$______ in commercial general
liability insurance. A certificate of insurance would be required to
accompany the application.
3. Demonstrate that it has a minimum of US$______ in liquid capital
immediately available in the applicant's name. Capital can be a
guaranteed bank loan, a guaranteed credit line or letter of credit from a
recognized financial information, or any other form of liquid capital.
Evidence of independent verification of the capital would be required to
accompany the application.
<PAGE> 25
4. Hold an existing SLD (or third level domain if operating under an
ISO-3166 country level domain), which when checked via
http://www.icann.org/dnswalk.html, produces no distinct warning messages.
The holder is to be determined via queries to public databases maintained
by existing Internet registry administrators or registrars. This is to
demonstrate that the applicant has relevant experience.
B. Ineligibility
An applicant would be ineligible for initial or renewed accreditation if:
1. There was a material misrepresentation, inaccuracy, or misleading
statement in the application or any material accompanying the
application;
2. Applicant had submitted to ICANN within the past year an accreditation
application or material accompanying an accreditation application that
ICANN had found to contain a material misrepresentation or inaccuracy; or
3. Applicant, or any officer, director, or manager, or any person or
entity owning (or beneficially owning) five percent or more of applicant:
a. within the past ten years, had been convicted of a felony or of
a misdemeanor related to financial activities, or had been judged
by a court to have committed fraud or breach of fiduciary duty, or
had been the subject of a judicial determination that ICANN deemed
as the substantive equivalent of any of these;
b. within the past ten years, had been disciplined by any
government or industry regulatory body for conduct involving
dishonesty or misuse of the funds of others;
c. was currently involved in any judicial or regulatory proceeding
that could result in a conviction, judgment, determination, or
discipline of the type specified in (a) or (b), unless ICANN found
that disqualification due to such involvement would be contrary to
the best interests of the public and the Internet; or
d. was the subject of a then-effective disqualification imposed by
ICANN, as specified immediately below.
C. Disqualification
To address violations by an accredited registrar of its obligations stated in
the accreditation agreement, ICANN would have the ability, in accordance with
procedures prescribed in the accreditation agreements (see Section IV.12
(termination) & IV.13 (dispute resolution)), to
<PAGE> 26
disqualify a registrar, or any officer, director, manager, employee, or owner
(including beneficial owners) from being an ICANN-accredited registrar, either
permanently or for a stated period of time. As noted in Section iii.B.3.d
immediately above, disqualification would also preclude the subject from certain
types of involvement with any ICANN-accredited registrar.
IV. PROPOSED ACCREDITATION AGREEMENT TERMS
The following outline gives the terms of the standard accreditation agreement
that is being considered for adoption. This is an outline only, and would be
implemented in more detailed contractual language to be prepared.
Accreditation would be extended to registrars by accreditation agreements. At
the inception of the accreditation program, these agreements would last for
one-year terms, unless sooner terminated. (As experience with the accreditation
program accumulates, it is anticipated that accreditation would be granted for
longer periods.)
The principal provisions of these agreements would include:
1. Accreditation. During the term of the agreement, the registrar would
be accredited to insert or renew registration of SLDs in specified
registries.
2. Use of ICANN Name. During the term of the accreditation agreement, the
registrar would have the right to advertise that it is accredited by
ICANN.
3. Submission of SLD Holder Data to Registry and Whois Databases. During
the term of the agreement:
a. As part of its registration of all SLD registrations in the
TLDs for which it is accredited, the registrar would submit data
concerning SLD registrations it processes promptly to the registry
administrator for the appropriate TLD for the purpose of ensuring
universal connectivity and for maintenance of a Whois database
only (see Section IV.5) (rights in data) below). The data elements
to be submitted would include:(1)
i. The name of the SLD being registered;
ii. The IP addresses of the primary nameserver and any
secondary nameservers for the SLD;
- -------------------------
(1) In view of the currently ongoing reevaluation of the appropriate design and
responsibility for Whois services (see discussion in Section II.G above), the
requirement that some of the data elements listed below be submitted to the
registry administrator may be changed, so that the data is instead provided by
the registrar to a Whois database managed by a different entity or is provided
by the registrar directly to third parties through operation of a Whois service
provided by the registrar, linked to a common interface to Whois databases
maintained by other registrars. In the event of either of these changes, the
registrar would submit the affected data elements, or directly provide Whois
service.
<PAGE> 27
iii. The corresponding names of those nameservers;
iv. The identity of the registrar;
v. The expiration date of the registration;
vi. The name and postal address of the SLD holder;
vii. The name, postal address, e-mail address, voice
telephone number, and where available fax number of the
technical contact for the SLD;
viii. The name, postal address, e-mail address, voice
telephone number, and where available fax number of the
administrative contact for the SLD;
ix. The name, postal address, e-mail address, voice
telephone number, and where available fax number of the
zone contact for the SLD;
x. Any remark concerning the registered SLD name that
should appear in the Whois data.(2)
b. Upon receiving any updates to the data elements IV.3.a.ii, iii,
and vi-x from the SLD holder, the registrar would submit the
updated items to the accredited registry administrator for the
appropriate TLD.
c. The registrar would be responsible for maintaining its own
electronic database containing, for each unexpired SLD
registration submitted by it to the registry for which it is
accredited, updated data elements IV.3.a.i-x.
d. Within ten days of any request by ICANN, the registrar would
submit the electronic database specified in Section IV.3.c above
to an existing or a substitute registry administrator designated
for the appropriate TLD. This submission is to allow
reconstitution of the registry in the event of a technical failure
of the registry or change in accredited registry administrator.
4. Retention of SLD Holder and Registration Data. During the term of the
agreement and for three years thereafter, the registrar would maintain
the following records relating to its dealings with registry
administrators and SLD holders, so that continuity of SLD registrations
may be preserved in the event the registrar ceases operations as an
accredited registrar:
a. In electronic form, the submission date and time, and the
content, of all registration data (including updates) submitted to
the registry.
- -------------------------
(2) Note that data elements v-x above would not be submitted to the registry
administrator in the event that Whois database service is managed by another
entity, including, for example, the registrar.
<PAGE> 28
b. In electronic, paper, or microfilm form, all written
communications with actual or potential SLD holder-customers,
including order templates.
c. In electronic form, records of the accounts of all SLD
holder-customers with the registrar, including dates and amounts
of all payments and refunds.
The registrar would make these records available for inspection by ICANN
on reasonable notice.
5. Rights in Data. The registrar would disclaim all rights to ownership
or exclusive use of the data elements listed in IV.3.a.i-iii) above for
all SLD registrations submitted by the registrar to any registry. The
registrar would be permitted to claim ownership of or rights in the data
elements listed in IV.3.a.iv-x and 4 above, subject to (a) a
non-exclusive, irrevocable, royalty-free license to exercise or have
exercised all such rights for or on behalf of ICANN throughout the world,
which ICANN may sublicense to any other registrar it accredits in the
event the registrar's accreditation agreement is terminated or expires
without renewal; and (b) a non-exclusive, irrevocable, royalty-free
license to make use of and disclose the data elements listed in
IV.3.a.vi-x above in a Whois or similar service. The Whois license could,
if warranted by the results of the ongoing reevaluation of Whois services
(see Section II.G above), be waived in whole or in part.
6. Data Escrow. During the term of the agreement the registrar would
submit to ICANN on a monthly basis, or to an independent company ICANN
designates, an electronic copy of the database described in Section
IV.3.c above, as well as a specification of the format of that database.
The escrowed data would be held by ICANN or the escrow agent under an
escrow agreement that specifies that the data may be used only in the
event that the accreditation agreement is terminated or expires without
renewal.
7. Fair Competition with Other Registrars. The registrar, if it is also a
registry administrator for the TLD(s) for which registrar accreditation
is granted, would undertake to abide by the following procedures to
ensure that all accredited registrars have equal access to the registry
for that TLD:
a. The registrar operations of the registry administrator would
not have access to, and would not make any use of, data concerning
the expiration date of registrations inserted or last renewed in
the registry by other registrars.
b. The registrar operations of the registry administrator would
not have earlier or more extensive access than any other registrar
to data concerning the level of registry activity (e.g., number of
initial registrations inserted, number of renewals, and number of
updates) of any other registrar.
<PAGE> 29
c. The registry would be administered so that initial SLD
registrations received from registrars are assigned on a
first-come, first-served basis and so that the registrar of the
SLD holder's choice may renew the registration.
8. Accommodation by Registry Administrator of Privacy Requirements
Applicable to Registrars. The registrar, if it is also a registry
administrator for the TLD(s) for which registrar accreditation is
granted, would abide by the following requirements to promote uniform
application of fair information practices and to facilitate the
submission of SLD registration data to the registry by registrars in a
manner that complies with those registrars' privacy obligations to their
SLD holders:
a. The registry administrator would provide each registrar with
notice as to:
i. The purposes for which data about any identified or
identifiable natural person ("Personal Data") to be
provided by the registrar are intended;
ii. The recipients or categories of recipients of any
Personal Data provided by the registrar; and
iii. How any Personal Data provided by the registrar and
maintained in the registry can be accessed and, if
necessary, rectified.
b. The registry administrator would, in the registrar/registry
administrator contract, agree that the registry will not process
any Personal Data provided by the registrar in a way incompatible
with the purposes and other limitations about which it has
provided notice to the registrar.
c. The registry administrator would, in the registrar/registry
administrator contract, agree that the registry would take
reasonable precautions to protect any Personal Data provided by
the registrar from loss, misuse, unauthorized access or
disclosure, alteration, or destruction.
9. Business Dealings, Including with SLD Holders.
a. The registrar would undertake to abide by a Code of Conduct for
DNS Registrars, requiring fair dealings with SLD holders. ICANN
anticipates that, over time, an appropriate Code of Conduct will
be developed by an organization of registrars and registry
administrators that will carry the principal responsibility for
enforcement. Until such a Code is developed, in order to
facilitate the early introduction of a competitive registrar
system, registrars would abide by an Interim Code of Conduct for
DNS Registrars to be issued by ICANN, after public notice and
comment according to its Bylaws.
b. The registrar would undertake to abide by all applicable laws
and governmental regulations.
<PAGE> 30
c. The registrar would not represent to any actual or potential
SLD holder that the registrar enjoys access to a registry for
which the registrar is accredited superior to that of any other
accredited registrar.
d. The registrar would not activate any SLD registration unless it
is satisfied that it has received payment of its registration fee.
e. The registrar would register SLDs to SLD holders only for fixed
periods. At the conclusion of the registration period, failure to
pay a renewal fee within the time specified in a second notice or
reminder would result in cancellation of the registration.
f. The registrar would not insert or renew any SLD name in any
registry for which the registrar is accredited in a manner
contrary to a list or specification of excluded SLD names that is
in effect at the time of insertion or renewal.
g. The registrar would require all SLD holders to enter an
electronic or paper registration agreement with the registrar
including at least the following provisions:
i. The SLD holder shall be required to provide to the
registrar accurate and reliable contact details and
promptly to update them during the term of the SLD
registration, including: the full name, postal address,
e-mail address, voice telephone number, and fax number if
available of the SLD holder; name of authorized person for
contact purposes in the case of an SLD holder that is an
organization, association or corporation; and the data
elements listed in IV.3.a.ii, iii, and vi-ix above.
The provision of inaccurate or unreliable information or
the failure to promptly update it shall constitute a
material breach of the SLD holder-registrar contract and be
a basis for cancellation of the SLD registration.
An SLD holder (such as an ISP) may provide its own contact
information in connection with an SLD the use of which it
intends to license to a third party who wishes to remain
anonymous, provided that the technical, administrative, and
zone contact information provided is adequate to facilitate
timely resolution of any problems that arise in connection
with the domain.
ii. The registrar would provide notice to each SLD
holder-customer stating:
<PAGE> 31
A. The purposes for which any data collected from
the applicant about any identified or identifiable
natural person ("Personal Data") are intended;
B. The intended recipients or categories of
recipients of the data (including the registry
administrator and others who will receive the data
from the registry);
C. Which data are obligatory and which data, if any,
are voluntary; and
D. How the data subject can access and, if
necessary, rectify the data held about them.
iii. The SLD holder shall consent to the data processing
referred to in Section IV.9.g.ii.
iv. The SLD holder shall warrant that it has provided
notice equivalent to that described in Section ii above to
any third-party individuals whose Personal Data are
supplied to the registrar by the SLD holder, and that the
SLD holder has obtained consent equivalent to that referred
to in Section iii above of any such third-party
individuals.
v. The registrar shall agree that it will not process the
Personal Data collected from the SLD holder in a way
incompatible with the purposes and other limitations about
which it has provided notice to the SLD holder in
accordance with Section ii, above.
vi. The registrar shall agree that it will take reasonable
precautions to protect Personal Data from loss, misuse,
unauthorized access or disclosure, alteration, or
destruction.
vii. The SLD holder shall represent that, to the best of
the SLD holder's knowledge and belief, neither the
registration of the SLD name nor the manner in which it is
directly or indirectly used infringes the legal rights of a
third party.
viii. For the adjudication of disputes concerning or
arising from use of the SLD name, the SLD holder shall
submit, without prejudice to other potentially applicable
jurisdictions, to the jurisdiction of the courts (a) of the
SLD holder's domicile and (b) where the registrar is
located.
ix. The SLD holder shall agree that its registration of the
SLD name shall be subject to suspension, cancellation, or
transfer as a result of any ICANN procedure, or by a
registrar or registry administrator procedure approved by
ICANN, (a) to correct mistakes by the registrar
<PAGE> 32
or registry administrator in registering the name or (b)
for the resolution of disputes concerning the SLD name.
10. Domain Name Dispute Resolution. During the term of the accreditation
agreement, the registrar would undertake to have in place a policy and
procedure for resolution of disputes concerning SLD names. In the event
that ICANN establishes a policy or procedure for resolution of its
disputes that by its terms applies to the registrar, the registrar would
adhere to the policy or procedure.
11. Accreditation Fees. As a condition of accreditation, the registrar
would agree to pay a fee to ICANN. These fees would be used to fund
ICANN's operations, including the registrar accreditation program. Under
this proposal, the fee would consist of fixed and variable components.
The fixed component would be payable upon signing of the accreditation
agreement. The variable component would based on the number of SLD
registrations inserted or renewed in registries by the registrar on or
after July 1, 1999, and would be payable monthly in arrears. At the end
of each month during the term of the agreement beginning July 1999, the
registrar would submit an accounting to ICANN stating the sum of the
durations (in years) of all of the registrations inserted or renewed in
registries by the registrar during the month. With the accounting, the
registrar would pay ICANN an amount computed by multiplying that sum by a
charge established from time to time by ICANN, which shall not exceed
US$1.00 per registration-year through the end of 2000. Accountings
submitted by the registrar would be subject to verification by an
independent audit of the registrar's books and records.
12. Termination of Accreditation Agreement. The accreditation agreement
could be terminated by ICANN before its expiration in any of the
following circumstances:
a. The registrar requested termination.
b. There was a material misrepresentation, inaccuracy, or
misleading statement in the registrar's application for
accreditation or any material accompanying the application.
c. Any of the circumstances of ineligibility stated above in
Section III.B.3 applied with respect to the registrar or related
persons and ICANN determined that termination of the accreditation
agreement would be in the best interest of the public or the
Internet.
d. The registrar failed to cure any breach of the agreement within
fifteen days after ICANN gives the registrar notice of the breach.
e. The registrar acted in a manner that ICANN reasonably
determined endangered the stability and operational integrity of
the Internet.
f. The registrar ceased doing business as a registrar.
<PAGE> 33
g. The registrar became insolvent.
The accreditation agreement would be terminated in the above
circumstances only upon fifteen days notice to the registrar, with the
registrar being given an opportunity during that time to initiate
arbitration of the appropriateness of termination under Section IV.13
below. In cases where ICANN reasonably determines that immediate action
is urgently required to preserve the stability of the Internet or protect
third parties, accreditation could be suspended immediately on notice to
the registrar for the fifteen-day period or until any requested
arbitration is concluded.
In addition to acting to terminate the accreditation agreement due to a
breach of the accreditation agreement, ICANN would also have the ability
to disqualify the registrar, or any officer, director, manager, employee,
or owner (including beneficial owners) from being an ICANN-accredited
registrar permanently or for a stated period of time.
13. Resolution of Disputes Under the Accreditation Agreement with ICANN.
Disputes arising under the accreditation agreement would be resolved by
arbitration conducted by and under the rules of an international arbitral
body, such as the ICC International Court of Arbitration. In the event
litigation arises with ICANN concerning the accreditation agreement (such
as to enforce an arbitration award), jurisdiction and exclusive venue for
such litigation would be in a court located in Los Angeles, California.
14. Renewal of Accreditation. The accreditation agreement would expire
after one year, unless sooner terminated. Registrars seeking to continue
their accreditation would apply for renewed accreditation according to
the accreditation requirements then in effect. In connection with renewed
accreditation, registrars would enter a new accreditation agreement, the
terms and conditions of which may differ from those of the expiring
accreditation agreement. Changes to prevailing accreditation
requirements, and to prevailing accreditation agreement terms and
conditions, would be made according to the requirements in ICANN's Bylaws
concerning, among other things, notice and the opportunity for public
comment.
V. PROPOSED CRITERIA FOR SELECTION OF TESTBED REGISTRARS
All applicants to be accredited for the phase 1 testbed would be required to
meet the accreditation requirements generally applicable to registrars operating
in later phases, as described in the Section III above, and to enter an
accreditation agreement containing the provisions outlined in Section IV above.
In addition, to ensure the success of the phase 1 testbed, registrars
participating in phase 1 must commit a significantly higher degree of technical
expertise to implementation and operation of the SRS than will be required of
registrars in later phases. Phase 1 registrars also will be required to
collaborate more closely with NSI's registry operation and with the other phase
1 registrars.
<PAGE> 34
Under this proposal, in the event that more than five qualified applicants seek
to participate in phase 1, the participating applicants would be selected by
ICANN based on four criteria. The primary criterion for selection would be:
1. The applicant's demonstrated technical and business capabilities to
support the phase 1 test and its willingness to commit the resources and
to collaborate closely, as appropriate, to ensure a successful testing of
the SRS.
Additional criteria that ICANN is considering using in selecting the phase 1
participants are:
2. The contribution that the applicant's participation would make to
introduction of early, robust competition in registrar services.
3. The extent to which the applicant's participation would enhance the
availability of registration services in geographical regions or to
categories of prospective domain name registrants that would be less
adequately served without applicant's participation.
4. The extent to which the applicant's participation would promote a
diversity of business models (including non-profit models) and types for
provision of registrar services.
