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Username: PhilBerent
Date/Time: Sun, November 5, 2000 at 6:50 PM GMT
Browser: Microsoft Internet Explorer V5.0 using Windows 98
Score: 5
Subject: Critique of iDomains' Application



This Critique of the iDomains’ proposal is a statement on behalf of the competing Affinity Internet, Inc/ bizTRAC team.

We maintain that, if granted, the iDomains application for the .biz would result in a new
TLD which, for the reasons stated below, would not be significantly different from the “.com” TLD with all the cyberhoarding, cybersquatting and domain name speculation problems which that implies. 

iDomains' Approach

iDomains' approach is very little modified from the unrestricted “.com” TLD. The most significant changes are the addition of sub-domains for each country and a requirement that a registrant should submit a valid tax identification number before their web site becomes active.

The addition of country code sub domains we see as useful and  this proposal is also described is our own Description of TLD Policies and Sponsoring Organization Proposal.

We believe, however, that the “tax ID” proposal is unenforceable and provides no significant benefits. Specifically:
(1) The iDomains approach is not fully explained – nor is it clear how it could be achieved.
(2) It is not clear what iDomains hopes to achieve by requiring the entry of tax ID information. We believe that this requirement creates no positive benefits for the management of the proposed TLD.
(3) We note that iDomains pro-forma financial statement have not been publicly posted and that were therefore unable to assess the viability of their business plan.

These points are explained in detail below.

(1) The iDomains approach is not fully explained – nor is it clear how it could be achieved.

(1.a) Incomplete explanation of how to deal with countries not providing or requiring Tax IDs

iDomains states that it is their objective to:

“…develop strict compliance mechanisms both on the front end and back end of the registration process.”
so that their proposal should not be perceived

“ simply an attempt to mimic the .COM phenomenon.”
In furtherance of this objective, however, they propose only that

“...the domain name registrant to provide a governmental taxing ID (i.e. EIN, VAT number, etc.) prior to the domain name being added to the active zone files.”
They also state:

“iDomains is aware that there are certain countries or territories where companies will not have taxing ID numbers. In those situations, iDomains will work to tag these entries in the database to allow for the activation of the domain names into the zone files. In these situations, iDomains will closely follow the registrant practices in those countries to prevent it from becoming a haven for abusive domain name registrants.”
iDomains does not explain the procedures they will use to “tag” entries – or even quite what this means, or the procedures that they will use to prevent countries from “becoming a haven…”. It seems to us that it would be an extremely difficult matter to effectively police “abusive registrations” from those claiming to be domiciled in country’s where companies do not  have Tax ID numbers, or are not required to obtain them. How would it be possible, in this case, to establish that registrants are who they claim to be?  In point of fact a rather large number of countries actively advertise themselves as tax havens and take pride in non-co-operation with foreign tax authorities. If large numbers of registrations from a particular country were found to be “abusive”, what policies would they pursue? Would all registration applications from that country then be denied? If not, what measures would be put in place to prevent further “abusive” registrations? None of this is explained..
In fact if, as they claim, it is possible to deal effectively with countries which do not provide tax IDs, why require the provision of a tax ID information at all?
1.b Incomplete explanation of “Back-end” “creative algorithms”.
iDomains also states :
“Additionally, iDomains intends to use a creative array of algorithms to scan the centralized Whois database for erroneous or fraudulent data.”
It is not clear, nor is it explained, how this would be possible. There are more than 250 sovereign countries or jurisdictions in the world most of which do not provide on-line databases of corporate information. In many cases the information is not available to the public at all, or if it is, it is difficult to obtain. Further, it is clear that in order to implement their proposal, iDomains would require this data to be updated at least on a weekly, or possibly on a daily basis, as in many cases a company will wish to register a domain name shortly after registering their corporate name and obtaining a valid tax ID.  Given these problems, it is not explained how it would be possible to determine whether a given tax ID is, or is not, fraudulent.

It is possible that iDomains intends to use their “creative array of algorithms” to verify name or address data. There are algorithm techniques in use in the US and parts of Europe that can flag questionable addresses. However even using these techniques it is not possible, without manual intervention, to effectively determine the occupant of any given address. In addition there are no databases available that allow worldwide address checking. If it is their intent to provide this service, once again it is not explained how this would, or could, be achieved.

In general, in section E19 of their proposal they describe their  “enforcement mechanisms” as consisting of:

“algorithms to identify questionable data, i.e. checksum values, address verification, etc.”
They do not, however, go on to explain anywhere the details of how algorithms could be used to determine whether someone has entered a false name, address or, tax ID number in their registration.

1.c Incomplete explanation of charter or of what will be perceived as “abusive registrations”

The iDomains states their objective as “the development of chartered top-level domain devoted toward e-commerce”. The proposal also discusses “abusive registrations” on several occasions. Although this is not clearly stated, we presume that “abusive registrations” refers to those which are made contravening the terms of the charter. However, nowhere do they give details of what this charter would actually contain.

The charter *is* effectively the rules of management of the TLD and should therefore be the heart of a proposal for a chartered TLD . Differences in the charter would very markedly affect the workings and the value of the proposed TLD. Without knowing what this charter would contain, it is impossible to judge whether or not the proposed TLD would be significantly different from “.com” or how iDomains would actually manage the .biz TLD if it were assigned to them.

In summary of this first section, we maintain that the iDomains application is incomplete because:

The application does not  explain what methods would be used to police registrations from those claiming to be domiciled in countries which don’t provide tax ID data, or what policies would be adopted if a high number of abusive registrations were recorded in such a country;
The application does not explain what methods would be used to verify tax ID data from countries not providing public access to this data;
In general the application does not explain how their “creative algorithms” could be used to identify fraudulent entries on a worldwide basis;
The application does not specify what their charter will contain, or explain exactly what will be classified as an “abusive registration” or how this determination will be made.

(2) It is not clear what iDomains hopes to achieve by requiring the entry of tax ID information. We believe that this requirement creates no positive benefits for the management of the proposed TLD.

We believe as stated above that it would be impossible for iDomains to effectively police against fraudulent registrations. Even if, however, this were possible it is unclear what their “loose” requirement for the entry of a tax ID number is intended to achieve. iDomains states:

“iDomains decided after careful consideration to allow domain name registrants to register a domain name without the appropriate taxing ID information. Prior to the domain name being activated to the zone files, however, the domain name registrant will be required to provide the required taxing ID information.”
In other words, a name can be registered but the web site can not be made active until tax ID information is provided. This is a restriction which we believe has no positive benefits – and is in fact almost tailor made to support the activities of domain name speculators and hoarders. Under these provisions there would be nothing to prevent a speculator from registering 5,000 names using one or more false identities, with the intent to sell the names rather than to use them actively. In fact, the domain name speculator has no need at all to create an active web site.

However, under the provisions specified, it is not clear why a domain name speculator should not be completely up-front about their activities. IDomains explicitly states:

“iDomains does not intend to limit the number of registrations per registrant and per registrar at any time, including during the start-up period.”
A domain name speculator under the stated provisions is free to purchase as many names as they like and sell them to the highest bidder. It is possible that iDomains wishes to prevent some other practices that they consider abusive by requiring the provision of a tax ID. However without knowing what their charter would contain (as it is not provided), it is impossible to know what types of  “abuses” they are trying to prevent.

In summary of this section 2, iDomain’s application does not clearly state what they are trying to achieve by requiring the entry of tax ID data, and we believe that this requirement provides no benefits for the management of the proposed TLD.

(3) Pro-forma financial statements have not been publicly posted for the iDomains proposal.

We do not know whether or not this omission is the responsibility of iDomains. However, the lack of this information means that we are unable to comment on the viability of their business model.

In summary,  iDomains proposes to run the .biz TLD  as a restricted TLD However, although iDomains mentions a charter many times in the course of the application, the charter is not provided. It is therefore unclear exactly what restrictions they intend. The only restriction that is explicitly specified is that businesses must provide a valid tax ID before their web site becomes active. For the reasons given above, we believe that it would be impossible to effectively prevent fraudulent registrations under this scheme, and iDomains gives little more than sketchy details of how they believe that this might be achieved. Even more importantly, even if such a restriction could be effectively imposed, it would do nothing to prevent domain name hoarding and speculation, or other frivolous registrations. In effect therefore, under this proposal, we see the proposed TLD as having no significant differences from the .com TLD, and we would expect it to experience the same problems.

Finally we note that iDomain’s pro-forma financial statements have not been posted and it is therefore impossible to assess the viability of their business model.


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