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

II. COMMENTARY ON PROPOSED GUIDELINES

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 comment-guidelines@icann.org. All comments will be acknowledged. If you do not receive an acknowledgement of receipt, please contact Molly Shaffer Van Houweling, msvh@icann.org.

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:

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:
 
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 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 NSI's registry administrator/registrar interface and backend systems, to ensure equal access to all licensed accredited registrars.
 

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.

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.

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

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 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:

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.

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 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.

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 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.

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.

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.

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.)

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.

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 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.

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.

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.

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

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:
 
Proposed Term of Accreditation Agreement WIPO Recommendation(s) Subject
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.vii 53 Representation by domain name holder that use will not infringe third party's legal rights 
Section 9.g.viii
 		 119 Domain name holder's consent to jurisdiction
Section 9.g.ix 146, 158 Suspension, cancellation, or transfer of SLD assigned by mistake or where there is a dispute
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.

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.

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 considering entering the business, this proposal would stipulate that the variable component would not exceed US$1.00 per registration-year.

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.

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.

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.)

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.

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.

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).

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:

B. Ineligibility

An applicant would be ineligible for initial or renewed accreditation if:

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 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:

9. Business Dealings, Including with SLD Holders.

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.

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:

Additional criteria that ICANN is considering using in selecting the phase 1 participants are:

Footnotes:

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.

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.

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