Saving the Domain Name System : The Current Proposal

[Background information]

The following analysis quotes extensively from the July 17 1997 draft of the MEMORANDUM OF UNDERSTANDING FOR THE INTERNET COUNCIL OF REGISTRARS ("CORE-MoU") The full text of this memorandum can be found at:

http://www.gtld-mou.org/docs/core-mou.htm

[LEGAL NOTICE: This document is quoted for review purposes only, and all rights remain with the originator of the document. Quoted portions appear in italic in the text below]

This is a long analysis, but I trust you will bear with me as I go through the CORE-MoU and dissect it to find the cancers in its midst. The passages quoted below have been selected as exhibiting the biggest problems -- I would suggest that you spend the time to read the whole memorandum by following the link above.

Article 2. Principles

The following principles set forth in the gTLD-MoU are adopted as part of this CORE-MoU:

(c) related public policy needs to balance and represent the interests of the current and future stakeholders in the Internet name space;

As we will see, the interests of the current stakeholders are completely bypassed. They are the biggest losers under the proposals.

(d) the current and future Internet name space stakeholders can benefit most from a self-regulatory and market-oriented approach to Internet domain name registration services;

The proposal is not, in fact, regulated by the market, but by a single Swiss organization, governed by the laws of Switzerland.

(f) as set forth in Section 2(f) of the gTLD-MoU, a policy shall be implemented that a second-level domain name in any of the CORE-gTLDs which is identical or closely similar to an alphanumeric string that, for the purposes of this policy, is deemed to be internationally known, and for which demonstrable intellectual property rights exist, may be held or used only by, or with the authorization of, the owner of such demonstrable intellectual property rights. Appropriate consideration shall be given to possible use of such a second-level domain name by a third party that, for the purposes of this policy, is deemed to have sufficient rights;

Warning: The passage above indicates that existing trademark owners will NOT be protected, unless their trademark is "internationally known." In other words, if your company or product name is only known on a national scale, you will have no recourse to the arbitration process. Anyone can just walk in and register a domain name that is the same as your trademark. Only the biggest corporations, which are truly international in scale, will be protected under this point.

Article 3. gTLDs

(b) Pending the expiration or appropriate amendment of the NSF Cooperative Agreement No. NCR-9218742 under which the ".com", ".org" and ".net" gTLDs are presently administered, the ".com", ".org" and ".net" gTLDs shall not be subject to the provisions of this CORE-MoU.

In other words, this proposal will in no way fix problems with the existing system.

(c) Likewise, as long as the ".com", ".org" and ".net" gTLDs are not subject to the provisions of this MoU, any Registrar which administers those gTLDs may not be considered to be a gTLD Registrar for the purposes of this CORE-MoU.

Carefully making sure that Network Solutions, the organization currently responsible for administration of the .com, .org and .net domains cannot put itself forward as one of the candidates to manage the new domains.

(d) The two-character top level domain name space within the DNS, which is reserved for ISO 3166 country codes under existing accepted Internet RFCs, shall not be subject to the provisions of this CORE-MoU.

This ensures that none of the other existing domains will be covered by this new agreement either.

Article 5. Structure and Responsibilities of CORE

(a) Each entity selected under Article 4 above as qualified to sign the CORE-MoU shall become a member of CORE and, if it conforms to the operational and technical requirements set by CORE, shall become a Registrar. After the commencement of registration activities by CORE, only registrars may remain members of CORE. Registrars, and only Registrars, shall participate in the on-going activities of CORE.

This is a fascinating passage, since on the application to sign the CORE agreement, interested parties must pay $10,000 each to join the organization. This passage guarantees that everyone who showed their support for CORE, but who is not selected as a registrar will lose that money and furthermore have no further say in the domain name system.

(b) CORE shall be incorporated under the laws of Switzerland as a Swiss Association governed by Articles 60 - 79 of the Swiss Civil Code.

Indeed, not a particularly international approach. The whole of the world-wide domain name system will be administered from Switzerland? That's great... it reminds me of a claim a few months ago that the domain debating process was totally open, and that anyone who went to the meeting in Geneva was welcome to take part in the debate!

(f) CORE shall establish such policies and technical protocols as are necessary to insure that SLDs are assigned on a first come first served basis with respect to registrar interaction with the CORE repository database for the gTLD under which the SLD is being registered. However, CORE may establish policies and technical protocols such that something similar to a "round robin" order of processing applications by Registrars for SLDs is used by the repositories. No duplicate SLDs shall be assigned in the same gTLD.

What this means is that all the registries are competing to register names first. I foresee the mother of all battles when the central registry opens and all the registries go for the thousands of "premium" names that are available. Plus what happens to the average consumer, if one registrar is a little slower than others at processing purchase requests? All registrars should be created equal, or consumer confusion will reign supreme. It would be like offering a franchise, but with no plans for any kind of consistency check or quality control. One place you eat the best burger of your life -- the next place, with the same sign outside, you have a suspicious the "chef" threw together the burger from ingredients discarded by the local butcher.

(g) CORE shall maintain Repositories of all SLDs registered by the Registrars, and shall adopt the most expeditious procedures which implement correct and reliable repository services. There shall be a separate repository for each gTLD. CORE shall establish and enforce a requirement that each Registrar provide the data set forth in Appendix B to this CORE-MoU for each SLD registered by such Registrar. CORE shall make the data in each Repository available and updated on a daily basis so that it can be searched (e.g., by whois) or downloaded as a complete file on the Internet (e.g., by ftp). In order to establish the Repositories, CORE shall proceed as set forth in Appendix E. CORE shall generate DNS zone files for use by DNS servers.

So apart from the order entry and forwarding process, CORE will have the same "monopolistic" role as Network Solutions is currently. CORE, and only CORE, will have control of ALL the repositories. Makes one wonder. Plus, divide up the repositories and there are that many more chances of a bug fouling up the system, databases getting updated out of synch and so on.

(h) CORE shall provide financial support to the POC (and to its predecessors, IAHC and iPOC) for the reimbursement of reasonable expenses actually incurred in carrying out the responsibilities of those organizations. POC shall retain such amounts of application fees paid by Registrars as are needed to reimburse such expenses, and CORE and POC shall agree from time to time on a budget for POC to be financed by funds received by CORE.

What is the difference between Network Solutions taking a slice out of each registration fee, or CORE taking a cut of every registrar's take?

(j) CORE shall establish and enforce requirements that Registrars shall not register SLDs for their own account or for accounts of an Affiliate for the purpose of trafficking in SLDs for sale, resale or transfer to applicants.

CORE will just lead to the formation of a lot of dummy companies! Virtually all registrars, and indeed anyone involved in the industry, have purchased domain names for their own accounts already. How can this statement be consistent with the idea of protecting the right of existing domain owners?

(a) Each Registrar may accept applications for the assignment of SLDs in any CORE-gTLD.

What is implicit here is that the Registrars will be the only registrars; i.e. the literally hundreds of companies that are making a living out of domain name registrations will not get a look in, and only the new elite Registrars [with a capital "R"] will have a chance to sell the new domain names. Not the best way to open up the market to competition. Can anyone say "OPEC"?

(b) Each Registrar may charge such fees, if any, as it determines, in its reasonable discretion, for the services it performs.

So, in other words, instead of knowing that a domain name will cost me $100 plus a small registration fee, I will have to visit all the registrars to find out what the going rate for each domain is. Domain names will only be sold via the registrars, so there will be no equivalent of InterNIC for direct sales.

[There follows a LOT of administrative fluff and gobbledigook about exactly how to become a Registrar -- join CORE, hand over lots of money etc. Then the following interesting passages:-]

II. Each application must be accompanied by a US$10,000 fee, and the instrument by which the fee is submitted must result in actual payment to CORE. This fee will be refunded in the event an applicant is found to be not qualified.

III. Each applicant will be responsible for payment of an appropriate fee for a report by an independent auditor, designated by the iPOC, which will examine whether the application is complete and in proper order; this fee is non-refundable, and may be deducted from the application fee.

Note that ALL this money is lost if the applicant does not become a registrar. That's a lot of money changing hands, flowing to the new entity that is to replace Network Solutions because the latter is too greedy!

[How the changes will affect domain name owners]