Prince plc’s Response to the U.S. Green Paper and European Communiqué *

Introduction *

Summary of the Prince Perspective *

1. The New Non Profit Corporation *

A. Legal Standing *

B. Authority *

C. Board Composition *

D. Funding *

2. NSI *

3. New Registries, registrars and gTLDs *

4. Trademark Holder Protection *

5. Transition of the DNS *

The privatisation process *

Commentary on the Green Paper *

The role of the IANA in the transition *

Commentary on the Green Paper *

Prince plc is a small UK based information technology company specialising in desktop and network training, technical support, migration services and consulting. As a result of a dispute with U.S. sporting goods manufacturer Prince Sports Group over its domain name "prince.com" it found itself at the centre of the domain name debate.

On the 1^st of July 1997 the President of the United States of America as part of his Framework initiative on Electronic Commerce directed the U.S. Secretary of Commerce to privatise, increase competition in, and promote international participation in the Domain Name System (DNS). On the 2^nd of July 1997 the U.S. Department of Commerce issued a Notice of Inquiry (NOI) with regard to the nature and appropriate management of the DNS. The NOI received 430 responses from the public by its closing on the 16^th of August 1997. On the 20^th of February 1998 the U.S. Department of Commerce published in the Federal Register a Green Paper entitled the "Technical Management of Internet Names and Addresses." The U.S. Department of Commerce will be accepting responses to the Green Paper up to and including the 23^rd of March 1998. The U.S. government has expressed a desire to begin the transition period of the DNS from a government to private sector based management structure by April 1998. It states in the Green Paper that the new non-profit corporation will have "operational responsibility" for the DNS by the 30^th of September 1998. The Department of Commerce goes on to say that the U.S. government will participate in "policy oversight" until the new corporation is "established and stable", but will exit the process by no later than the 30^th of September 2000.

Prince plc welcomes the Green Paper and its establishing of a firm commercial foundation for the governance of the Internet. We ask that the U.S. administration act and act decisively, in order to remove any uncertainty about the future direction of the Internet.

The Internet is in transition. The Internet was the domain of the military, researchers and the education establishment, operated by volunteers, run on the basis of respect and consensus, serving computer users. The Internet of the future will be the medium for electronic commerce, operated by professionals, offering consumers a quality of service and choice within an effective global commercial and legal framework. This transitional process must be one of evolution not revolution. We can not however afford to put the new wine of electronic commerce into the old wine skin of the existing DNS management ethos and structure.

We believe that the governance of the Domain Name System must be international, commercial, representative and accountable. It must also represent both current and future users of the Internet within a private commercially self-governing framework. This is only made possible through a partnership between government and the private sector. Government needs to provide on the one hand oversight and legitimacy, and the private sector on the other hand needs to provide the infrastructure and money to run the DNS. Only by government oversight will individual rights, cultural and social diversity be protected. Only by private sector governance will consumers be able to benefit from competition within a framework that engenders their confidence and certainty in the value of participating in electronic commerce.

The management structure of the DNS must ensure that there is a single integrated Internet. The DNS must be operationally stable, scaleable, inter-operable and secure at both the root server level and within the BIND software. DNS administration must be predictable, non-discriminatory, and enable portability of domain names in order to ensure consumer confidence. The DNS must have effective legal safeguards in place so as to protect the rights of both domain name and trademark holders, and thereby avoid consumer confusion.

Prince believes it is essential that first and foremost we address the current problems with the DNS:

• The collision between domain names and trademarks;
• The need to legalise and make professional the DNS management structure;
• The need to make the DNS secure ;
• Before adding to them through the introduction of new gTLDs.

There are now more than 58 million adults using the Internet in the US and Canada. There are approximately 8.6 million users of the Internet in Japan, 6 million in the UK, 4 million in Germany and 400,000 in France. According to Simba Information, electronic commerce generated $7 billion in revenue in 1997. They expect that the revenue derived from electronic commerce will rise dramatically over the next couple of years reaching $24 billion by the year 2000. Simba estimated that of the revenue derived in 1997, $6.02 billion was business-to-business and $992 million was the result of individual consumer purchases. The number of individual online purchases according to CommerceNet/Nielsen Media Research reached 10 million by December of 1997. According to International Data Group, electronic commerce revenues in Western Europe are set to rise from $1 billion in 1997 to $30 billion in 2001.

There are approximately 1.4 million .com, .net and .org domain name registrations in the USA. In the UK there are approximately 32,000 .com, .net and .org registrations, and 73,000 country code registrations. In France there are approximately 22,000 .com, .net and .org registrations, and 13,000 country code registrations.

A recent OECD report found that only six of the countries it surveyed did not charge fees for domain name registrations. It is interesting to note that with regard to those countries that did levy a fee, the survey found that Network Solutions fees were lower than the fees charged by over half of the registries surveyed. By way of example, it observed that the total cost for the first three years of a domain name registration in Germany is $870, France $426, whereas with NSI it is only $150. It should also be noted that on average NSI processes a domain name application in seven minutes. However, on average a country code based application in France may take two to three months.

It is envisaged in the Green Paper that the new non-profit corporation will have operational responsibility for the DNS by the 30^th of September 1998. However, the Green Paper discussion period is not scheduled to end until March 23^rd. Then there will be a period of review of the comments received – perhaps a month? Normally thereafter a White Paper is published. One would presume that the U.S. Congress would wish to debate the issue. Until the consultative phase is completed and Congressional sign-off is obtained, it would be premature to embark on a process of incorporation. This in the normal manner of things would place the process at the earliest in May/June. If the organisation is constituted as a 501(c)(3) non-profit corporation, on average it takes three months to obtain recognition of status from the IRS, let alone complete the process. That would place us in August/September. Then the board would have to be selected and staff appointed. At the same time a building and equipment would have to be acquired. It therefore seems a little optimistic to believe that the corporation would be able to take operational responsibility by the end of September.

A number of key dates are missing from the Green Paper, in particular with regard to the devolution of NSI’s current role and the transition to legal and professional organisation of IANA within the DNS management structure . Perhaps, it would be better to lay down project milestones rather than raise expectations through furnishing specific dates. For example, NSI is asked to develop a shared registry "by a date certain to be agreed upon." It would be helpful therefore to know what will be required and/or how long the USG believes it will take to vision and scope, build, test, pilot, provide authentication and security, and roll-out the shared registry.

The Communiqué states that it believes that the comment period of one month is not long enough, this begs the question as to what is the appropriate period of time. The NSF contract with NSI ends in March 1998 and the DARPA contract with USC covering IANA ends in September 1998. Time is therefore of the essence. Thus, a two to three month comment period could have a significant impact on the successful transition of the DNS, particularly in light of the fact that a shared database for .COM may take 12 to 18 months to build, test and deploy.

The commission wishes to expand the scope of the discussion on governance to include monopolies, data protection, unfair competition, taxation, privacy and fraud. In short, they wish for a dialogue not merely on the technical management of the DNS, but the Charter. This approach makes an already complex and contentious issue potentially more difficult to resolve at the very time when there is a pressing need for a resolution.

The commission’s strategy for ensuring European private sector participation in the process and effective representation in the final product is via European diplomacy and the implementation of a euro-centric regulatory framework, i.e. the total opposite of the underlying vision of the Green Paper.

The desire by certain member states to see a role for the ITU is a step in the wrong direction. The ITU is a telecommunications standards setting body with no real expertise in setting Internet standards. Besides the IETF already carries out this task admirably. The involvement of the ITU would merely politicise the process at a time when the objective is to privatise and ensure the continued de-regulation of the Internet. On the other hand, WIPO could play an invaluable role in the international harmonisation of trademarks. Its expertise as a centre for arbitration and mediation is world renowned. Accordingly, we believe that WIPO should conduct the study on the Dispute Resolution Policy and play a major role in support of the eventual resolution policy put in place for the new registries.

The call for a treaty, will for all intents and purposes mean that privatisation of the DNS will not occur until the next century. While everyone accepts that in the long term we will need a treaty to address all of the issues associated with Internet governance, can we wait that long? It is estimated that by the year 2000 there will be 300 million people on the Internet and 5 million domain names.

A Non-profit corporation based in and incorporated under U.S. law.

Historically and contractually the management of the DNS vests with the United States. It is also true that the majority of the current Internet infrastructure and Internet usage is located in the U.S. Therefore, the U.S. does have every right and needs to be encouraged to take the lead on this issue. However, the trends with regard to future use of the Internet suggest that by the year 2005 there will be more users of the Internet in Europe and Asia than in the U.S. Accordingly, the headquarters of the new corporation should be located in the USA, but regional offices should be established in Europe and Asia.

We agree that the future management of the Internet needs to reflect the global and international nature of this communication medium.

To act like a "standard setting body" and to co-ordinate its legitimate objectives:

• IP Numbering allocation to regional IP registries – ARIN, APNIC and RIPE, and setting of relevant policy
• Establish policy under which and when new gTLDs are introduced to the root server system, based in part on the impact study of the introduction of new gTLDs conducted in the transition period
• Oversight of the root server system (including the "appropriate databases")
• Protocol assignment and maintenance of registry containing the assigned values

We believe that IP numbers are held in the Public Trust, therefore, there is an urgent need to create a public (transparent) system of accountability for the allocation of IP numbers. In that regard, there is a need to establish a non-discriminatory allocation policy. There is also a need to audit the past and current allocation of this finite resource in order to ensure its efficacious distribution.

It is essential that a full operational, administrative and legal evaluation or study be conducted with regard to the introduction of new gTLDs. We would suggest that initially no more than one or two new gTLDs should be introduced and only for the purposes of the evaluation. This study should be for a period of one year. After the study is complete, a policy for the introduction of new gTLDs should be established on the basis of the findings of the study. To the extent that it is practical legal safeguards should be put in place to alleviate/resolve trademark concerns (see section 4, Trademark Holder Protection). Only then, should new gTLDs be introduced, and only in accordance with the agreed upon criteria set out in the new policy.

We believe that gTLDs are held in the Public Trust. Consequently, there is a need to create a public system of accountability for the administration of gTLDs. To avoid consumer confusion over which gTLD it is appropriate for a consumer to use, comprehensive gTLD user guidelines need to be established.

There is a need for there to be a professional root server management system. It is essential that the operation of the root server system be open and accountable. Accordingly, mandatory policies and procedures need to be established for the operation of the root servers. This should include a certification and auditing procedure. An independent body should conduct the certification and monitoring process.

All root server mangers should be under contract with the new corporation. The contract should ensure that there is adequate back-up, security and fail safe measures in place to ensure continuity of service.

The new corporation should contract out the management of the alpha root server to an independent third party located initially in the U.S. The contractor should ensure that the highest levels of operational quality assurance and security are in place at all times. There should be a mirror alpha root server located outside of the U.S. It also should be operated to the same high standards as the U.S. root server. It is essential that sufficient fail safe measures are in place to deal with a catastrophic breakdown of the system. Accordingly, Prince Plc welcomes the call for a security study, and would recommend that the study include the use of private sector resources in order to ensure that its perspective on this very important issue is heard.

The new corporation will expose itself to allegations in Europe that it is a natural monopoly. However, whether the monopoly is being used to exploit consumers or distort the market for domain names is not clear.

• One each from ARIN, APNIC and RIPE – "As additional regional number registries are added, board members could be designated on a rotating basis or elected by a membership organization made up of regional registries."
• Two from the Internet Architecture Board

• Two from membership associations for the registries and registrars
• Seven "members designated by a membership association…representing Internet users"

• 1 for an individual or entity engaged in "non-commercial, not-for-profit use of the Internet"
• 1 "for individual end users"
• "The remaining seats [5] could be filled by commercial users, including trademark holders"
• "The new corporation’s charter should provide a mechanism whereby its governing body will evolve to reflect changes in the constituency of Internet stakeholders"

We agree with the communiqué call for a "balanced and equitable international private sector participation." We agree with the UK Department of Trade and Industry in its belief that there should be two boards. The technical functions of IP numbering, the root server system and protocols should be handled by the technical community. They have the expertise, aptitude and desire to continue management of these functions. Accordingly, there should be a technical board with authority over IP numbering, the root server system, protocols and ports.

The technical board must represent all the technical communities with regard to the Internet. It also must represent the different regions of the Internet in order to ensure cultural sensitivity. Accordingly, there should be one representative from APNIC, ARIN, RIPE, IETF/IAB, W3C, CIX, EuroISPA and APIA. The chairman of the board must have both a distinguished technical and business background. As and when other IP registries and ISP user organisations are created one representative from each should be added to cover Central and South America (including the Caribbean), Africa, the Middle East, Asia (outside of the Pacific rim), and the CIS.

gTLD policy by its very nature is not only commercial, it is also social and cultural. The board must reflect this reality. Historically, APNIC, RIPE and ARIN have not been involved in domain name administration and there would seem to be no good reason to involve them at this juncture. Accordingly, there should be:

Two representative from each of the trade association for registries and the trade association for registrars;

• One representative from INTA, MARQUES, an intellectual property association for Asia, WITSA, the Information Society, ETNO, Pacific Telecommunications Council, TABD, G7 Global Inventory Project;

• An end user/consumer representative from North America, South America, Asia, and Europe; and
• An education/research representative from North America, South America, Asia, and Europe.

The chairman of the board must have both a distinguished technical and business background. The representatives must in terms of nationality/region proportionally represent the current usage of the Internet in terms of the top ten users and thereafter by regions of the World. Thus, the board must also have built into it the facility to grow as the Internet community grows.

Domain name registries and regional IP registries will provide funding for the new corporation

How much and how regularly will these fees be collected? Will it be a flat fee or will it change dependent on the size of the registry? Is such a fee either subject to tax or can it be used for the purposes of tax relief? If it is subject to revenue law, whose law will apply?

• Co-operative agreement is to be ramped down by September 1998
• NSI will give up all data, software and IP rights arising out of the co-operative agreement
• "Effectively separate and maintain a division" between its registry and registrar business
• Continue to operate .com, .org and .net, but on a fully shared registry basis
• Develop and implement "by a date certain to be agreed upon" a shared registry for its TLDs (see Prince plc response under Timing, on page 3)
• Registry services will be priced on "an agreed upon formula for a period of time"
• NSI will turn over control of the alpha server "when instructed so to do" by the U.S. government (see footnote 7 on page 3, and Prince plc response under Root \server System on page 6)
• April 1, 1998 NSI will stop contributing to the Internet Infrastructure Fund

It is absolutely essential that there is a definitive legal and operational separation between NSI’s registry and registrar activities. It would be preferable if NSI divested itself of one of these activities, for example, its registry function, in order that it may avoid even the appearance of monopolistic behaviour.

The imposition of pricing controls on NSI but on none of the other registries is discriminatory. Further, it assumes that NSI will raise its prices and consumers need to be protected from such an outcome. However, it is more likely that as a result of competition and the need to no longer support the Internet Infrastructure Fund NSI’s prices will fall. If any price controls are needed, a proposition that we virulently oppose, it should be at the registrar level.

Another issue for the Commission is the apparent bias of the paper in favour of NSI. It points out that NSI’s registry houses three gTLDs (.com, .net and .org) and the other registries will only get to house one. At first instance this would appear to be a fair concern. However, the money is not being made at the registry end, but at the registrar. Further, the raw data shows little demand by consumers for or prospective competitors to house .net and .org. Besides, any registrar can offer, subject to availability, .com, .net and .org domain name spaces. The argument then continues: because NSI has an established name and customer base it has an unfair advantage over its prospective competition. Should we not let the market and consumers decide this issue? If like many monopolists its only advantage is its size or market presence, then the better and less expensive service of competitors should prevail if this is really the case.

There appears to be a desire on the part of the commission to have input into the distribution of the funds in the Internet Infrastructure fund. As the commission was neither a party to the contract under which the fund was set-up, a named beneficiary under that agreement, nor a party to the contract under which the underlying fee was collected, it would appear to lack sufficient legal standing to assert such a role.

• The creation of up to 5 new registries
• Each registry must have an independently tested and functioning database and communication system so as to ensure that it is robust and scaleable
• The registry must have at least T-1 connectivity via two different ISPs
• Each registry will be "initially permitted" to operate and host one new gTLD (see Prince plc response gTLD policy on page 6, and footnote 16)
• Registries will be permitted to provide and charge for additional value added services above and beyond those they offer to registrars
• The registry "at least at this time" must operate as a shared registry, on a first-come first-served non-discriminatory basis, and include encryption and authentication facilities
• Each TLD registry is to be equally available to all qualified registrars
• Each registry will modify its operations to ensure interoperability
• Registry must have "a plan to ensure that the registry’s obligations to its customers will be fulfilled in the event that the registry goes out of business"
• "Procedures for assuring and maintaining the expertise and experience of technical staff"
• Back-up multi-day power system; 24 hour security; remotely located, fully redundant and staffed facility with "hot switch over"
• Each registrar must meet the technical, managerial and site requirements laid out in appendix 1 of the Green Paper: secure access – authentication and encryption to the registry; connectivity to the Internet via at least two different ISPs; a plan to protect customers and registries in the event that the registrar fails
• Each registrar may register in any "top level domain"
• "Existing national registries will continue to administer country-code top level domains if these national governments seek to assert those rights"
• Registries to indemnify the new non-profit corporation against costs incurred by it with regard to trademark disputes
• Registries and registrars are to be separate, and at least operating through separate subsidiaries

No one organisation should be allowed to control more than one gTLD registry. This would preclude NSI or POC/CORE from creating "Russian Doll" registries, e.g. CORE1, CORE2, CORE3, CORE4 and CORE5. We need to make sure that we do not replace one monopoly with potentially another. Such an outcome would be equally anti-competitive as the present situation.

To avoid operational surges, a maximum of 2 new gTLD registries should be introduced each year through the year 2000. There should be a gTLD registry located in Europe, Asia and South America. Thereafter, registries should be introduced as and when required, and in a manner consistent with the policies for the introduction of new gTLDs.

As a matter of policy TLD country code registries should be promoted over gTLD registries. The purpose of a gTLD registration should be commercial, i.e. to promote your business within a region or globally. Arguably, this would also alleviate some of the demand by individuals on the .com domain name space.

The Green Paper states that each registry will be "initially permitted" to operate and host one new gTLD. Does the statement imply that registries will be allowed to offer in the future more than one gTLD, and if so, how many and which ones – new or pre-existing gTLDs? If pre-existing gTLDs are envisaged, how will portability and interoperability issues be dealt with?

The Green Paper states that the registry "at least at this time" must operate on a shared registry basis." This statement taken in conjunction with the statement that "at some point in the future, the new organisation may consider the desirability of allowing the introduction of non-shared registries" suggests that the U.S. administration is willing to accept the existence of monopolistic registries.

Registry staff must have in addition to at least three years networking experience, relevant and recognised technical network accreditation. Such accreditation must be kept current.

In order to secure continuity of service. Each registry should be required to take out an insurance policy to cover all of its customers in the unlikely event it should go out of business and no alternative registry is found to serve its existing customers.

Registries that serve domain name holders in Europe should ensure that their data processing procedures comply with European Data Protection laws. Accordingly, registry information about European domain name holders can not be distributed to a third party or made public without the permission of the individual domain name holder first of all.

Registrars that serve domain name holders in Europe should ensure that their data processing procedures comply with European Data Protection laws. Accordingly, registry/registrar information about European domain name holders can not be distributed to a third party or made public without the permission of the individual domain name holder first of all.

Before registrars can offer gTLDs they have to have not only the infrastructure in place, but also the authentication and security scheme. The accomplishment of the latter will be dependent not only on the registrar’s competency, but also the security standard it is allowed to operate and can interface with the respective registry. In short, encryption and security laws may complicate the registration administration process with the consumer.

The U.S. administration does not have the prerogative to call for a standardisation, professionalisation and operation of national registries according to at least an internationally agreed upon minimum set of standards, but such a call is needed. However, its statement with regard to national registries suggests that the practise of commercial organisations taking over a registry is permissible. Does this mean that the U.S. administration condones the management of the .tm country code domain name space by NetNames? Clearly, its appropriation was with the intention to commercially exploit the connotation attached to the abbreviation .tm, because outside of the gas industry this country code would seem to have for all practical purposes little application. For trademark holders the "commercial" use of .tm creates major policing and enforcement problems. For example, if there has been passing off, e.g. disney.tm, where does Disney seek relief? Turkmenistan (in the central asian region of the former USSR), UK. Or US? Currently, NetNames has on hold for the trademark holder such famous trademarks as nestle.tm, volvo.tm, viacom.tm, canon.tm, BA.tm, compaqcomputer.tm, samsung.tm, ubs.tm etc.

No new gTLDs should be introduced until 1. The new corporation is up and running, and 2. All of the appropriate legal and operational safeguards are in place.

It is asserted in the communiqué that according to the Green Paper "the registry licensing process will be undertaken by US industry." This is not true. The new registries will be chosen according to the criteria laid out in Appendix 1 of the Green Paper. This process initially will be carried out by an independent accounting firm and upon the advice of IANA (most probably Jon Postel). IANA to the extent it exists is part of the University of Southern California (checkout www.iana.org) and/or an entity established by the Internet Society and the Federal Networking Council, and as such could not be characterised as being part of US industry. Thereafter, the Green Paper provides that the new corporation may consider the introduction of non-shared registries. Arguably, the new corporation as envisaged under the Green Paper has a predominately "techie" feel to it. APNIC, ARIN, RIPE, IAB, the registrar association, the registry association, an individual end user and an individual non-commercial user, i.e. 8 out of a possible 15 members of the board will therefore not be derived from US industry.

The EC is correct to raise the issue of domain name portability. However, this problem is at the registry and not the registrar level. It is more one of the fact that each registry will only contain one TLD.

The EC’s raising of issues relating to the finite number of IP addresses and the uniqueness of domain names is important. There can be only one prince.com even though there are over 2,000 uses of the word "prince" in connection with trademarks, service marks and trade names in the real world. That is not to say you can not register as domain names variants of your principle domain name . However, unlike the telephone numbering system, you are not assured coverage against a wrong number/address having been entered. Accordingly, the need for directory structures seems to be overwhelming, however, we are two years a way from having an appropriate solution.

If there is a concern on the part of the commission over the incorporation of the new IANA in the U.S. it is interesting to note that no similar concern is raised with regard to the POC which has been incorporated in Delaware, USA. Nor the fact that the CORE gTLD database is housed at Best Internet in California, USA. Both of which are governed by U.S. law.

4. Trademark Holder Protection

• Contact details in the registration application. Which are also to be kept current by the registrant subsequent to the domain name registration
• Declaration certifying that the registration applicant "knows of no entity with superior rights in the domain name it seeks to register" and intends to use the domain name
• Creation of an effective domain name database with a common interface and search engine (which also returns similar names), to include: date of registration and any objections, current ownership and contact details (including mail address for service of process); current chain of title
• Dispute resolution policy (not to include the registrars), including:
• For example, in the 30 day period subsequent to registration an adversely affected trademark holder may lodge an objection that leads to a temporary suspension until the dispute is resolved
• Implementation of recommendations by the impact study as to the minimum requirements of a registry dispute resolution policy
• Each registry must establish "minimum dispute resolution [see appendix 2]and other procedures related to trademark considerations"
• Jurisdiction should be agreed as being where the registry is domiciled, the registry database is located or where the alpha server is located
• A mechanism to clear famous trademarks across a range of gTLDs
• Each registry is to operate an on-line searchable database of its domain name registrations

The collision between trademarks and domain names is having a profound effect on trademark law and practice. Trademarks provide a cornerstone of the legal framework for commerce. It enables consumers to identify goods and services, and have certainty as to their origin. Therefore, it ensures that consumers do not suffer confusion with regards to the goods and services that they have purchased. Accordingly, it is essential that if the Internet is to become the medium for electronic commerce that it has an effective legal framework that protects the rights of both trademark and domain name holders.

Although the number of court cases may be comparatively small, this belies a highly charged litigious environment that seems to get worse by the day. Increasing numbers of a corporation’s trademark legal resource is being dedicated to policing domain names. However, the real victims are the small to medium size organisations who can not afford to litigate over a domain name and are forced to give up a valuable resource. The need for certainty, speedy and inexpensive dispute resolution is imperative.

The contact details suggested by INTA seem wholly appropriate – Name, business or residential address, email address, phone and fax number; the state or country of incorporation or partnership; name, address and phone number of the designated agent for service of process. There should also be an affirmative duty on the domain name holder to inform the registry of changes to its contact details within 30 days of any such changes.

Prince would propose a system as follows:

The applicant must state, furnish evidence of and attest to an actual commercial use for or that it has an existing trademark or trade name corresponding to the gTLD domain name space applied for or that there is an intent to use (ITU) in a commercial manner the domain name space within 90 days. Within 90 days, an ITU applicant must furnish evidence of commercial use or its domain name will be put on hold by the registry. Upon the elapsing of the 90^th day subsequent to the filing of the domain name application the domain name will be suspended. Thereafter, the ITU domain name applicant shall have a further 30 days in which to furnish evidence of commercial use in order to redeem the domain name or it will be vacated and made available for re-distribution.

Prince would propose a system as follows:

Each domain name application should be reviewed to see if it is available or is confusingly similar (almost identical) to either an existing domain name and corresponding trademark registration or a well known trademark.

The application shall be filed electronically (and have a GMT date stamp) and within a week placed on a server that is accessible to registries and registrars, and viewable by the public. It shall remain on the server for one month. Within that period a domain name holder and or trademark holder may lodge an opposition to the application with the registrar filing the application on behalf of the prospective domain name applicant. Upon the lodging of the opposition the domain name will be deemed to be in dispute. It shall thereafter be placed on a fast track dispute resolution process, i.e. it shall be determined whether the application shall be upheld or rejected within 30 days of the opposition being filed. Thus, upon the lapsing of the opposition period without incident or an affirmative ruling by the dispute resolution administrator the domain name will be placed in the root zone file.

The contract between the registry and the domain name holder should specify that jurisdiction shall be either where the domain name holder or registry permanently resides. Although choice of law provisions are common in the U.S. in Europe, it is questionable as to whether they are even enforceable. For example, French courts have a very strong long arm statute that they are willing to exercise in order to protect French consumers. A further consideration is the fact that U.S. and UK. courts tend to adopt a trademark analysis in intellectual property cases. Whereas German and French courts tend to use unfair competition analysis to protect intellectual property rights.

Jurisdiction should be established on the basis that the domain name holder conducts an active commercial use of its Web site/email with regard to the forum state. Thus, if the Web site/email list solicits information for commercial use and with the intent to use it in the jurisdiction where infringement is being asserted that should be sufficient. In short, it is a matter of degree, a passive site would be insufficient. Whereas, where a domain name holder is doing business over the Internet or addressing advertising directly at the forum it should be sufficient. (see Zippo Manufacturing Co. V. Zippo Doc Com, 952 F. Supp. 1119 W. D. Oa 1997)

A domain name holder is bound to the dispute resolution policy accepted as being applicable by the registry at which the domain name is housed. Dispute resolution will be conducted by a third party organisation legally competent to conduct the resolution process. The lodging of a dispute electronically with the dispute resolution administration will not lead to an automatic suspension of the domain name unless there are substantial public interest reasons or the overwhelming preponderance of the evidence provided by the complainant supports such a conclusion. Its findings shall be final.

When a dispute arises both the complainant and the domain name holder must place a $3,000 bond with the dispute resolution administrator. If it is held that the registration was obtained by fraud or by a cyber squatter/pirate/jester then the registrant shall loose the bond as well as the registration. Similarly, if the complaint was brought for vexatious or frivolous reasons then the complainant shall loose its bond.

It is essential that all the registries apply a common set of principles within their respective dispute resolution policies in order to ensure certainty, and in order to avoid "forum" shopping and consumer chaos.

The assertion that "the current proposal could consolidate permanent US jurisdiction over the Internet as a whole, including dispute resolution and trademarks used on the Internet" is not correct. The green paper states that jurisdiction should be where the registry is located or the alpha server. The green paper does not preclude the location of either the registries or alpha server outside of the U.S. However, we believe that the EEC should propose that at least one registry should be located in Europe and one in Asia. Further, jurisdiction should be afforded for where the domain name holder is located.

With regard to the reference to WIPO’s efforts in 1997, it should be noted that it related to the ACPs being proposed under the gTLD MOU. It is therefore inaccurate to state that it was a "dispute resolution procedure for the Internet." This reference underscores the POC centric approach of the communiqué.

We note that there is no explicit recognition of trademark holders rights. The problems of policing the DNS against trademark infringement seems to have been ignored completely. The need for appropriate legal and operational safeguards prior to the introduction of new gTLDs in order to avoid consumer confusion and loss of confidence in the Internet seems to have also been ignored.

• Review of the security and management of the root server system in order to make it more professional.

• The review’s recommendations will be implemented in the transition.
• The new corporation will attain overall control of the alpha server once the new corporation has been constituted and is operationally stable
• An impact study (by an internationally recognised body on dispute resolution) of the introduction of new gTLDs on:
• competition, the functionality of the root server system and the shared registries
• Users;
• Trademark holders;
• Creating an effective dispute resolution policy upon the consideration of current dispute resolution policies;
• "The evolution of litigation"

It is essential that any study be independent of those who have a vested interest in its outcome. Accordingly, although private sector experts should be consulted by those conducting the studies, the private sector should not be running such studies. We also believe that a study should be done on the viability of directories as a long term solution to this problem.

The IANA will engage a neutral accounting and technical consultancy firm to evaluate and certify proposed registries based on the technical, managerial and site criterion outlined in appendix 1 of the Green Paper.

• IANA will define the requirements and procedures for tests and audits including where relevant evaluation of new gTLDs and existing TLDs - .com, .org and .net. However, such tests etc. will be done by an appropriate certifying organisation or test laboratory

• The new registry may "in order of their qualification…propose another gTLD to IANA"
• "Initially, current IANA staff will move to this new organization to provide continuity and expertise" during the establishment of the new corporation

IANA is to play an invaluable role within the DNS management transition process and therefore it is essential that it is fully accountable for its actions. Prince plc feels that in light of the "test" conducted by Dr. Postel that his role should be clearly defined and work supervised.

Senior Internet Consultant

Prince plc