Changes to Internet Domain Names will Encourage Competition, Foster Growth and Stability

Geneva, 29 April 1997 — Some 150 delegates from around the world will convene at the Geneva International Conference Centre on April 29 for a three day meeting aimed at restructuring the way domain names are registered on the Internet. Hosted by the International Telecommunication Union, the meeting plans to introduce competition into the lucrative market for registration of generic Internet top level domain names, or gTLDs.

Top-level domain names are the file extensions which denote the ‘address’ of an Internet site on the network. There are at present only three international generic top-level domain names generally accessible to all Internet users – .com, .org and .net*.The current system for registration of Internet addresses is handled by US-based Network Solutions Inc. (NSI), which has had a monopoly on registration of the three existing top-level domains under an agreement with the US National Science Foundation (NSF), the organization which pioneered much of the early work in setting up the Internet. The NSF announced on April 23 that it would not be renewing its agreement with NSI, which is due to expire in March 1998.

Instead, a new system developed by the International Ad Hoc Committee, which was set up by the Internet Society and the Internet Assigned Numbers Authority, will be explained at the meeting. The delegates, representing many of the world’s most influential organizations in the field of the growth and operation of the Internet, will work together on a Memorandum of Understanding (gTLD-MoU) covering the allocation and administration of generic top level domains. The gTLD-MoU will set up a self-governing structure, and will establish policies and procedures for responsible administration of the Internet domain name space. The meeting is expected to conclude with the signing of this historic document on Thursday, 1 May.

The Internet is currently experiencing rapid growth and ‘globalization’. The number of Internet hosts grew worldwide from just over 4 million in 1994 to over 9 million in 1995. While it remains a US-dominated network, annual growth of more than 50% in the number of Internet hosts is now being experienced in all regions of the world. International generic top level domain names are currently used by around 38% of all Internet hosts, with this figure expected to grow strongly as more and more businesses acknowledge the commercial benefits of having a site on the World Wide Web.The body behind the new plan for the management of the Internet domain name space, the International Ad Hoc Committee (IAHC), was established by the Internet Society (ISOC) and the Internet Assigned Numbers Authority (IANA). Its members comprise representatives from ISOC, IANA, ITU, WIPO, the US Federal Networking Council, the International Trademark Association (INTA) and the Internet Architecture Board. The new plan for the management of top level domains was drafted following consideration of extensive public comment with over 4,000 informal and 100 formal contributions.

The IAHC recommendations call for the creation, initially, of seven additional generic TLDs and a structure to allow competing companies to register Internet domain names. The new domains expected to be available will be: .firm (for businesses, .store (for shops), .web (for organizations concentrating on WorldWide Web-related activities), .arts (for cultural and entertainment-based organizations), .rec (for organizations involved in recreation activities), .info (for information services) and .nom (for individual web sites).

The plan balances requirements for competition among registrars versus the need for public oversight of registration activities. It proposes the initial registration of 28 new registrars, to be selected from the seven global regions, each of whom will be authorized to register Internet domain names through a shared database repository. This neutral database will be managed by a Council of Registrars (CORE), and the new registrars will compete directly, covering the same range of Top Level Domain names, and setting their own registration fees. Users will be free to choose the registrar which offers them the best deal in terms of pricing and conditions, and they will be able to change registrars at any time.

Public interest concerns will be handled by a Policy Oversight Committee, which will consist of a small management team assisted by a much larger Policy Advisory Body, comprised from signatories to the gTLD-MoU. This structure will ensure that daily operations can be conducted efficiently, but policy concerns and future evolution of the Internet Domain Name System will receive adequate and diverse public review and input.

The new plan for the management of top-level domains has been developed as a result of a number of problems with the current system. The most public of these problems has been the hoarding and ‘hijacking’ of well-known names and trademarks by people or companies hoping to ‘sell-on’ their right to use the name to the owner of that name or trademark. Under the new system, it will be very difficult to hoard or hijack domain names corresponding with well known trademarks. Challenges to the use of a name or trademark will be handled by international independent panels of experts administered by the World Intellectual Property Organization, a Geneva-based organization which already has responsibility for the worldwide protection of patents, trademarks and copyright.

Other perceived problems with the current system include the market lock on registration of generic top-level domains by a single company (NSI), which has driven other organizations to set up ‘rogue registries’ which threaten to destroy the stability of the Internet name space, and issues of national versus international trademark ownership.

Secretary-General of the ITU, Dr Pekka Tarjanne, said he welcomed the Internet Ad Hoc Committee’s plans. "The IAHC proposal will phase in competition within generic Top Level Domains while maintaining stability in the Internet domain name space. This will provide an suitable environment for the global business community, and promote the development of electronic commerce worldwide. The ITU is extremely pleased to be able to play a facilitating role in this process by acting as the depository of the MoU."

A number of organizations prominent in the Internet community have already signalled their intention to sign the MoU. They include: MCI, UUNet Technologies, France Telecom, Telecom Italia, Swedish telecom provider Telia, UNINETT, the Internet Software Consortium, the Asia-Pacific Network Information Center, the Internet Society and IANA. Many more organizations are expected to add their names to the document, either on May 1, or shortly afterwards.

Vint Cerf, affectionately known in Internet circles as ‘The Father of the Internet’ because of his work on developing the Internet protocol TCP/IP was firm in his endorsement of the new plan. Now employed as a Senior Vice-President of MCI, one of the leading carriers of Internet traffic around the world, Cerf said "This Memorandum of Understanding brings maturity and stability to the future self-governance of the Internet."In order to become a registrar for the new system, applicants will be required to meet objective technical and business criteria, and will then be selected by a lottery process. Would-be registrars will also need to lodge an application fee of US$20,000, which will be refunded if they are unsuccessful in their application.

In brief, proposals related to the new Memorandum of Understanding are:

• that generic top level domain names be considered as a public trust and dealt with accordingly;
• that seven new generic top level domain names be added to the existing three domains(.com .org and .net) to relieve the pressure on name availability due to the growing number of users, as well as to better organize the allocation of domain names according to the profile of the company or organization concerned. These new names are .firm, .store, .web, .arts, .rec, .info and .nom.
• that Internet self-governing institutions be established, comprising signatories of the MoU (whether the general gTLD-MoU or the MoU specifically applicable to Registrars). These institutions would be responsible for Registration activities (Registrars), supervising the activities of the Registrars (CORE), for taking into account public concerns and have policy oversight functions (Policy Oversight Committee and Policy Advisory Board) and for arbitration and mediation functions (Administrative Domain Name Challenge Panels).
• that, in a first phase, up to 28 registrars be selected on a worldwide basis, all authorized to register Internet domain names in competition with one another, and all having access to all top level domains through a neutral shared database repository. Until the expiration of the cooperative agreement which gives Network Solutions Inc. a monopoly on the allocation of domain names in the three existing top level domains (.com, .net and .org), these three domains will not be subject to the provisions of the MoU. Additional registrars will be allocated as quickly as possible.
• that a Council of Registrars (CORE) be established for managing allocations under the generic top level domain names, which will enforce requirements that each Registrar in all respects act consistently with their commitments (as detailed in the CORE-MoU) and which will act as depository of a shared database to maintain the integrity of allocated names. The CORE will be established as a Swiss non-profit association.
• that other institutions be established to supervise the work of the Council and act as policy bodies in order to take account of public interest issues in the future evolution of the system, including the allocation of new domain names. These will include a Policy Oversight Committee to be assisted by the Policy Advisory Body comprising signatories of the MoU.
• that administrative mechanisms are put in place to avoid the hoarding or warehousing of names
• that an arbitration and mediation mechanism be set up, to be administered by the Arbitration and Mediation Centre of the World Intellectual Property Organization. Panels established under this mechanism will be independent and their decisions will be binding on the registrars as stipulated in the CORE-MoU
• that a proactive mechanism be developed to prevent the use of trademarks by those other than the owners of the trademarks
• that the International Telecommunication Union act as the Depository of the MoU

Following the signing of the MoU, these new registration procedures are expected to be operational by the end of this year.