Enhancement Of Competition

 

Section VI — Enhancement Of Competition

  Executive Summary
C30. Instructions
C31. Analysis of the Effect on Competition
  A. Enhancement of Competition — Registry Level
  B. Enhancement of Competition — Registrar Level
C32. Operation of a Registry with More than 500,000 Names
C33. Affiliations
  (a) The Applicant or Any Entity Identified in Item C13
  (b) Any Operator of a DNS Registry Having More than 500,000 Registered Names

Executive Summary

ICANN has succeeded in introducing competition in the registrar market. However, in the gTLD registry space, VeriSign still maintains a 95% market share, with .ORG declining under its stewardship. While competition is important, stability is paramount. To guarantee a stable and smooth transition, the new .ORG registry operator must have demonstrated experience maintaining a shared registry system containing at least 500,000 domain names under management. ISOC believes that Afilias is the optimal registry infrastructure provider to guarantee stability, while simultaneously enhancing competition in the registry marketplace. Further, the ISOC proposal provides competitive marketing for .ORG to restore its vitality.

Overview: ISOC applauds and supports ICANN's efforts to diversify the provision of registry services by selecting a new registry operator for the .ORG TLD. ISOC and PIR believe that this objective is consistent with the policy statements made by the U.S. Department of Commerce in its 1998 White Paper, "Management of Internet Names and Addresses." Specifically, the U.S. government's position was that "competitive systems generally result in greater innovation, consumer choice, and satisfaction in the long run" and that the "pressure of competition is likely to be the most effective means of discouraging registries from acting monopolistically." (See Docket Number 980212036-8146-02; http://www.ntia.doc.gov/ntiahome/domainname/6_5_98dns.htm)

To date, ICANN has succeeded in introducing meaningful competition in the registrar marketplace. Whereas less than three years ago VeriSign, formerly Network Solutions Inc., sponsored 100% of the domain names registered in the generic top-level domains, now VeriSign sponsors less than 36%.

However, despite the introduction of competitive registry services as part of the ICANN TLD proof of concept, VeriSign still dominates gTLD registry services, holding a 95% market share.

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C30.  Instructions

One of ICANN's core principles is the encouragement of competition in the provision of registration services at both the registry and registrar levels. Promotion of that principle will be a criterion. As one illustration of this criterion, a major purpose of the reassignment of the .ORG registry is to diversify the provision of registry services by placing the .ORG registry under different operation than the .com and .net registries. Consideration will be given to the extent to which proposed arrangements are consistent with this purpose. As another illustration, applicants are encouraged to refrain from prohibiting non-affiliated providers of backend services from offering their services in connection with other applications. This section of the .ORG Proposal concerns the effect on competition of the selection of a successor registry operator.

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C31.  Analysis of the Effect on Competition

Give your analysis of how selecting your application would effect competition in the provision of registration services at both the registry and registrar level.

 

A.  Enhancement of Competition — Registry Level

When ISOC began evaluating the opportunities associated with becoming the registry operator of the .ORG TLD, it understood the necessity to balance the needs of increasing competition at the registry level while maintaining the stability of the .ORG registry for the benefit of the MORE THAN two million registrants. Based upon the importance that the ICANN Board placed on operational stability during its recent meeting in Accra, ISOC realized that it would need to partner with an established back-end registry infrastructure provider in order to maximize its opportunity to become the .ORG registry operator.

ISOC believes that the 500,000-domain name benchmark referenced in C32 provides an excellent measurement for the ability of a registry operator to guarantee a stable transition from the current registry operator. To identify a suitable back-end registry infrastructure to partner with, ISOC identified those TLDs with over 500,000 domain names under management:

Figure 58
Registries With Over 500,000 Names Under Management

Then ISOC analyzed the following factors for each of the above registry operators: 1) whether each shared registry system was established and robust, 2) the registry protocol each uses, and 3) each registry operator's relationship with ICANN-accredited registrars. The chart below summarizes some of the factors considered in our evaluation process.

Figure 59
Evaluation Factors

After balancing the needs of increasing competition at the registry level while maintaining the stability of the .ORG registry, ISOC felt that Afilias was uniquely qualified to provide the registry infrastructure in its bid for the .ORG re-delegation.

As the registry operator for .INFO, the first and most popular of the seven proof-of-concept registry operators selected by ICANN, Afilias currently has over 805,000 domain names under management. In addition to .INFO, Afilias provides registry services to support the .VC (St. Vincent and the Grenadines) ccTLD and is an affiliate of AusRegistry Pty. Ltd., the registry operator for the COM.AU, NET.AU, ASN.AU, ID.AU, and ORG.AU second-level domains.

Afilias has a diverse multinational presence (offices in Ireland, the United States, Canada, and the UK) and has demonstrated the ability to resolve complex policy issues (.INFO country names and inappropriately registered Sunrise names). It has a stable EPP registry implementation that is capable of supporting a RRP protocol during transition as required by the ICANN contract; and has demonstrated experience in transitioning a TLD between registry operators.

Afilias has also successfully demonstrated a robust EPP protocol that has processed over 20,000 intra-registrar transfers. In enhancing competition at the registrar level, it is critical that a registry be able to support domain name portability between registrars. This level of domain name portability is unmatched in any of the other proof of concept registry providers to date.

Another factor in ISOC's selection of Afilias is that it strengthens a currently small but promising back-end registry services provider ensuring the continued availability of a realistic alternative to VeriSign. Although ICANN succeeded in introducing competition into the marketplace by accrediting a large number of registrars, market conditions suggest that are likely to be far fewer viable registry infrastructure providers. ISOC believes that given this reality, competition and stability is best served at the registry level by selecting a small but established registry service provider with an proven record of maintaining over a half a million names, as opposed to supporting a registry infrastructure provider with less proven accomplishments.

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B. Enhancement of Competition — Registrar Level

Given the need to provide a stable transition for .ORG registrants, the following statistics reinforce the likelihood that Afilias will be able to provide registrars with a seamless transition for their registrants.

Out of the 102 registrars authorized by VeriSign to provide .COM, .ORG, and .NET registrations, the great majority are already Afilias-authorized, which means they have passed Afilias' rigorous operational testing and engineering (OT&E) process and have proved their ability to use the EPP protocol. More importantly, over 99.2 percent of the current .ORG domain names are sponsored by a registrar that is already Afilias-authorized. The overwhelming majority of .ORG names are with registrars who are already using Afilias' EPP system on a day-to-day basis.

Figure 60
Registrars Market Share in .ORG vs. Afilias Authorization

REGISTRAR

Country

Market Share

.ORG Registrations

Afilias Auth

000Domains.com

US

0.000425

10

Yes

007Names, Inc.

US

0.006291

148

Yes

123 Registration, Inc.

US

0.013985

329

Yes

1 eNameCo

US

0.094327

2219

Yes

1dni.com

US

0.002295

54

Yes

1st Domain.net, division of G+D International

US

0.058195

1369

Yes

4Domains.com

US

0.014538

342

Yes

A Technology Company, Inc.

Canada

0.002806

66

No

Active ISP ASA

Norway

0.175859

4137

Yes

Address Creation

US

0.020957

493

Yes

aitdomains.com

US

0.329741

7757

Yes

Alice's Registry, Inc.

US

0.000468

11

Yes

Alldomains.com, Inc.

US

0.261727

6157

Yes

America Online, Inc.

US

0.040298

948

No

Ascio Technologies, Inc.

Denmark

0.372972

8774

Yes

ATLNTD.com

Russia

0

0

No

AWRegistry

US

0.121575

2860

Yes

BB Online UK Ltd.

UK

0.037918

892

Yes

BookMyName SAS

France

0.02338

550

Yes

BulkRegister.com, Inc.

US

4.691652

110369

Yes

CORE - Council of Internet Registrars

Switzerland

2.350183

55287

Yes

Capital Networks Pty. Ltd.

Australia

0.111671

2627

Yes

Catalog.com, Inc.

US

0.112988

2658

Yes

Computer Data Networks

Kuwait

0.005824

137

No

Corporate Domains, Inc.

US

0.005994

141

Yes

Cronon AG

Germany

0.230483

5422

Yes

Deutsche Telekom, AG

Germany

0.015771

371

No

DirectI.com

India

0.034092

802

Yes

directNIC

US

1.451122

34137

Yes

Domain Bank, Inc.

US

0.663307

15604

Yes

Domain Registration Services, Inc

US

0.168547

3965

Yes

DomainCity.com

Korea

0

0

No

domaindiscount24.com

Germany

0.065974

1552

Yes

DomainDiscover

US

1.371588

32266

Yes

Domaininfo.com

Sweden

0.134285

3159

Yes

DomainPeople, Inc.

Canada

0.430061

10117

Yes

DomainRegistry.com, Inc.

US

0.056197

1322

Yes

DomainSite.com, Inc.

US

0.081447

1916

No

DomainZoo.com, Inc.

US

0.052498

1235

Yes

doregi.com

Korea

0.132925

3127

Yes

DotRegistrar.com

US

1.08933

25626

Yes

Dotster, Inc.

US

2.065587

48592

Yes

Eastern Communications Co., Ltd.

China

0.003613

85

No

EasySpace, Ltd.

UK

0.761545

17915

Yes

EnetRegistry.com Corp.

US

0.002125

50

No

eNom, Inc.

US

2.337983

55000

Yes

EPAG, Enter-Price Multimedia AG

Germany

0.40073

9427

Yes

GK Group LLC

US

0.3365

7916

No

Gabia, Inc.

Korea

0.173861

4090

Yes

Gandi

France

1.835317

43175

Yes

Global Media Online, Inc.

Japan

0.303513

7140

Yes

Globedom

Austria

0.013603

320

Yes

Go Daddy Software, Inc.

US

2.984754

70215

Yes

IA Registry

US

0.164296

3865

No

I.D.R. Internet Domain Registry, Ltd.

Israel

0.005016

118

Yes

InterAccess Company

US

0.016153

380

No

Interactive Telecom Network, Inc.

US

0.001105

26

No

Interdomain SA

Spain

0.084252

1982

Yes

Internet Names WorldWide

Australia

4.947385

116385

Yes

ItsYourDomain.com

US

0.791599

18622

Yes

joker.com

Germany

1.509189

35503

Yes

Markmonitor

US

0.023422

551

Yes

Mr. DomReg.com, Inc.

Canada

0.01254

295

Yes

Namebay

Monaco

0.108567

2554

Yes

NameEngine, Inc.

US

0.040043

942

Yes

Names4Ever

US

0.421985

9927

Yes

NameScout, Corp.

Canada

0.102191

2404

Yes

NamesDirect.com, Inc.

Bermuda

0.438436

10314

Yes

NameSecure.com, Inc.

US

0.774638

18223

Yes

Neteka, Inc.

Canada

0.008077

190

Yes

Netpia.com, Inc.

Korea

0.106314

2501

Yes

NetNames

UK

0.130672

3074

Yes

Network Solutions, Inc.

US

39.54932

930380

Yes

NewDentity.com

US

0

0

No

Nominalia Internet S.L.

Spain

0.008374

197

Yes

NORDNET

France

0.114476

2693

Yes

Omnis Network, LLC

US

0.028863

679

Yes

OnlineNIC, Inc.

China

0.285064

6706

Yes

OVH Sarl

France

0

0

No

pairNIC

US

0

0

No

PSI-Japan, Inc.

Japan

0.060447

1422

Yes

Parava Networks, Inc.

US

0.112648

2650

Yes

pAsia, Inc.

China

0.00204

48

No

Primus Telecommunications Pty. Ltd

Australia

0.033242

782

No

register.com

US

9.909392

233114

Yes

Register.it SPA

Italy

0.043784

1030

Yes

Registrars.com

US

0

0

Yes

Registration Technologies, Inc.

US

0.020192

475

Yes

RGNames.com

Korea

0.003358

79

Yes

Schlund+Partner AG

Germany

2.5782

60651

Yes

Secura GmbH

Germany

0.031924

751

Yes

Signature Domains

US

0.153372

3608

Yes

Stargate Communications, Inc.

US

0.576292

13557

Yes

TLDs, dba SRSPlus

US

0.081489

1917

Yes

topnet AG

Germany

0.000085

2

No

Total Registrations

UK

0.088971

2093

Yes

Transpac

France

0.077238

1817

Yes

TUCOWS, Inc.

Canada

10.13660

238459

Yes

Virtual Internet (UK) Ltd.

UK

0.007099

167

Yes

Wild West Domains, Inc.

US

0

0

Yes

Xin Net Corp

China

0.096282

2265

No

YesNIC Co Ltd.

Korea

0.262492

6175

Yes

Source: SnapNames "State of the Domain" database, April 2002

An additional factor to increase competitive registrar services is the removal of the $100,000 surety instrument currently required by VeriSign registry to register .ORG domain names. To further enhance the competitive structure of the registry market for the benefit of registrars, the ISOC proposal also seeks to make .ORG more competitive versus other TLDs. The .ORG domain has been declining recently, as promotional registrations have not been not renewed and ccTLDs and the new TLDs have taken market share. ISOC's proposal demonstrates how it will reinvigorate the .ORG domain behind clear positioning and effective marketing, restoring .ORG to a competitive position within this challenging market.

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C32.  Operation of a Registry with More than 500,000 Names

State whether the applicant or any entity identified in item C13 operates a DNS registry having more than 500,000 registered names and, if so, provide details.

ISOC has chosen to contract with Afilias, based upon the detailed analysis in C31, to provide back-end registry infrastructure services in connection with this bid. Afilias is the current registry operator of the .INFO TLD and has more than 800,000 domain names under management.

ISOC will rely upon Afilias' technical experience and infrastructure to provide a stable and seamless transition from the current registry operation. However, ISOC will exercise complete policy and administrative oversight of the registry in its role as registry operator.

ISOC has modeled this relationship, in part, upon the contractual agreement between EDUCAUSE and VeriSign governing their operation of the .EDU registry. Similar to the administrative and policy role that EDUCAUSE provides based upon its established role as a nonprofit association in the higher education community, ISOC believes that it is ideally suited to play a similar role for the non-commercial registrants in the .ORG registry, with Afilias providing the registry technical infrastructure.

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C33.  Affiliations

Describe in detail all affiliations, including direct or indirect ownership and contractual arrangements (including letters of intent) for the past, present, or future provision of registry services, between (a) the applicant or any entity identified in item C13 and (b) any operator of a DNS registry having more than 500,000 registered names.

 

(a)   The Applicant or Any Entity Identified in Item C13

The Internet Society (ISOC) is comprised of more than 137 organizational members, including nonprofit, trade and professional organizations, foundations, educational institutions, corporations, government agencies, and other international organizations that share a commitment to the health of the Internet. A list of all Internet Society organizational members can be found online at /orgs/members.php. Afilias became an executive level organizational member of the Internet Society earlier this year, joining other registry operators such as CORE, DENIC eG, EDUCAUSE, Melbourne IT, Nominet UK, and VeriSign.

Donald Heath currently serves as a director of Afilias and sits on the Internet Society's Board of Trustees. After formal introductions between the Internet Society and Afilias, Mr. Heath recused himself from all further discussions in connection with this matter.

On May 15, 2002 the Internet Society's Board of Trustees overwhelmingly approved the decision to contract with Afilias to help secure the reallocation of the .ORG registry. Specifically, the Board authorized the President of the Internet Society, Lynn St. Amour, to enter into a Letter of Intent (LOI) with Afilias. On May 31, 2002, the Internet Society and Afilias entered into a LOI in connection with this RFP, which incorporated the following terms:

  • ISOC will submit an application to ICANN to become the registry operator for the .ORG registry;

  • In the application, ISOC will propose the establishment of a separate entity, owned or controlled solely by the Internet Society: Public Interest Registry, or PIR. PIR will serve as the registry operator, if the application is selected by ICANN;

  • ISOC (or its designee, PIR) will contract with Afilias to provide registry technical and support services in connection with the operation of the registry;

  • ISOC (or its designee, PIR) will be the sole beneficiary of the US$5 million endowment anticipated to be paid by VeriSign as set forth in Section 5.1.4 of the current .ORG registry agreement;

  • The application proposes a $6 a year registration fee, with $4 going to Afilias for registry infrastructure services and $2 going to ISOC (or its designee, PIR) to provide administrative and policy oversight functions and other outreach activities; and

Afilias has committed to provide a $250,000 line of credit to PIR to cover any start-up expenses, contingent upon the selection of ISOC's bid by ICANN.

(b)   Any Operator of a DNS Registry Having More than 500,000 Registered Names.

Afilias is a privately held Irish limited corporation. It was founded in September of 2000 by a consortium of 18 ICANN-accredited domain name registrars, located across 10 countries: 1stDomain.net, a division of G+D International LLC; Corporate Domains, Inc.; Domain Bank, Inc.; DomainInfo AB; DomainPeople, Inc.; Domain Registration Services; Enter-Price Multimedia AG (EPAG); Internet Council of Registrars (CORE); interQ, Inc.; Netnames International Ltd; Network Solutions, Inc. Registrar Operations; Polar Software Ltd. d/b/a Signdomains.com; Procurement Services International (Japan), Inc.; Register.com; Schlund + Partner AG; Sitename; Ascio (formerly Speednames, Inc.); Tucows, Inc.

Network Solutions is a wholly owned corporation of VeriSign, Inc., which currently operates four registries in excess of 500,000 domain names: .COM, .NET, .ORG, and .CC. Currently no Network Solutions or VeriSign employee or representative serves on the Afilias Board of Trustees/Directors.

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