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Username: PhilBerent
Date/Time: Sun, November 5, 2000 at 11:50 PM GMT
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Subject: Further Statement in Support of our Application


Further Statement in Support of our Application

We have thoroughly reviewed the public responses to our application as well as other applications that have been submitted and in particular those which intend to specifically address the needs of the business community.

Our central objective is to create a TLD which will not be plagued by the cyberhoarding and cybersquatting which have proved such a problem in .com. Most of the names in the .com space which are a single word or a well known English phrase have been taken. However, a relatively small proportion of these names of these names point to an active web site. 

We note that our approach is very different from those submitted by the other applicants. In fact we are the only application which proposes to do any significant front end screening of applications.

Our Approach

We very strongly believe in the benefits of our proposed methodology. In summary we will:
Review registrants bank and financial statements,
Run a trade mark check for each registration,
Require evidence of separate product line, or business, for each registration,
Forbid transfer of names unless a significant active business is also transferred,
Only allow renewal of a name if the associated web site is kept active,
Provide “prior rights” for “Major Marks”  meeting specific financial and business criteria and for trade mark owners during the start up period.

By using these relatively strict mechanisms we will ensure that any entity that registers a domain under the new TLD will have a clear intention to use the site for a business purpose. (Note that we also propose a reservation procedure which we will allow those in the start-up phase of a business to reserve a name but we believe will successfully deter cybersquatters and domain name speculators.)

We believe that the only way to successfully to carry out these relatively extensive pre-screening and ongoing monitoring procedures is manually. Every case is different and in many cases electronic information is not available. In many cases mail, e-mail, or telephone contact with the registrant or with their suppliers or customers may be necessary to verify submitted information (which will of course only be carried out with the registrant’s approval). We therefore believe that the only way to effectively maintain the registration standards we propose is through manual screening.

Why “Chartered”  Approach won’t work

Others applicants have suggested “chartered” TLDs which in some sense require the applicant to be a real business and allow a complainant to institute arbitration proceedings if a given registration does not conform to the charter. The UDRP has worked very well for resolving trademark disputes (and we support a slightly extended version of the UDRP as part of our proposal). However, we believe that this method would simply not work as a method of maintaining a TLD purely for those actually doing business. This is because it would be very difficult for a potential complainant to know whether a given site did or did not infringe the Charter. Therefore many registrations violating the Charter would remain unchallenged.

It is relatively easy to determine whether someone has infringed my trademark or is using a site in bad faith to try to capture some for my business. However, it is close to impossible in many cases to determine (without hiring a private investigator) whether a given SLD represents a real business in a sense defined by the charter. After all, there is no way to tell whether a 3 page web site is a shop window for a multi-million dollar business or is just a front for a domain name speculator. In other words it would be impossible for a complainant to know, without considerable investigation, whether the registrant of a given site did or did note meet the specified criteria at the time of registration.

Further, we believe it is impractical to specify a charter which would be tight enough to limit a TLD to real businesses and yet flexible enough to allow a reservation procedure for start-ups – unless manual pre-screening is used. In fact, none of the applicants suggesting a chartered approach give details of what their charter would contain.

For these reasons in many cases a potential complainant would chose to avoid the costs of investigation and arbitration and many (if not most) registrations violating the charter would be likely to go unchallenged. A TLD trying to use this approach would therefore effectively end up as just another unrestricted “.com” with all of the cybersquatting and domain name speculation problems that this implies.

We provide a more detailed criticism of this “chartered” approach in the posting “Critique of JVTeam Application” posted on this notice board in response to the JVTeam application for “.biz”.

Explanation of Our Price Policy

It is clear that the price which we intend to charge $2,000 for initial registration and $150 for annual renewal is considerably greater than that of other registry proposals. We believe that this is the correct approach for this TLD for a number for a number of reasons.

(a) It is our intention to deter frivolous registrations. Many registrations that are not subsequently actively used are made by professional speculators. Others are made by individuals either speculating on a name or with a vague intention to use the name for a business purpose. When taken on mass these practices make it very difficult for those actually establishing or running businesses to find a name to establish a powerful presence on the net.
(b) By preventing frivolous registrations we will ensure that there is always a powerful name available for those actually wishing to do business. The price will always be $2,000.
(c) The price is considerably less than that which is generally required to pay off cybersquatters to buy quality names in the secondary market. In many cases good names in the .com space sell for tens of thousands of dollars. In .com this is becoming a greater and greater problem as more and more names are sold (5 million in the first quarter of this year) leaving less and less names available. Our policy therefore will certainly be costly to cyberhoarders but in most cases will allow the “genuine” registrants to save a considerable amount of money.
(d) As someone wishing to do business will always be able to obtain a high quality name in the “.biz” TLD for $2,000 there will be no incentive to go to the secondary market to purchase a name at a highly inflated price. We therefore expect, that, if implemented, our proposal will considerably reduce cyberhoarding and domain name speculation throughout the .com and other TLDs as well.
(e) Statistics provided by the US Census Bureau show that in 1998 the average business in the US has annual revenues of approx. 3million USD. The average business with under 20 employees has revenues of approx. $571,000. We maintain that a $2,000 one time fee is not onerous to those who genuinely intend to use the SLD to establish a web presence for their business.
(f) There are considerable costs associated with the manual procedures involved in each registration. In addition, as our expected number of registrations is far lower than for other proposed TLDs we need to generate a larger margin from each registration to cover fixed administrative, marketing and technical costs
(g) As stated in our description of TLD policies we intend to establish different “hurdle levels” for businesses not domiciled in the U.S. or European Union. We have also decided that in order to assist those in developing to participate in the proposed .biz registry we should lower registration prices to those domiciled in these locations. An exact price structure is as yet to be determined but in all cases prices will have to at least cover the direct costs incurred in processing registration materials. We should emphasize, however, that our proposal  would considerably reduce the prices of names in the secondary market across all TLDs and would therefore significantly benefit all members of the Internet community in all countries.

Explanation of Numbers of Expected Registrations

We are forecasting a significantly lower number of registrations than that of the competing “.biz” applications. The JVTeam application forecasts, over 700,000 in the first year. The iDomains application forecasts over 700,000 in the first quarter.

At the end of 1999 there were only approximately 4,000,000 active web sites across all designations. Although the Internet is growing rapidly, given these figure, and the other TLDs that are and will become available, it would seem that the statistics of either of the above competitors reflect the implicit expectation that their new TLDs would be extensively used for speculation and hoarding purposes.

We should note however that we have revised our expectations upwards somewhat. We base our upward revision on the extraordinary performance of the “.tv” registry which has apparently succeeded in registering over 100,000 names since their start of business in March. We now expect that our actual number of registrations in the first year will fall somewhere between the “expected” 50% scenario and the “optimistic” 10% scenario given in our projections.

We should emphasize however that even if the number of names registered is as small as our initial projections that, if approved, our proposed TLD will create benefits throughout the Internet. This is because, as explained above, our restricted TLD will mean that there is always a powerful name available to those wishing to do business on the net for $2,000, and that there will be little incentive for anyone to buy names for inflated prices in the secondary market. As are result we expect our TLD to considerably reduce the attractiveness of domain name hoarding and speculation and to reduce the prices of names in the secondary market as well as reducing these harmful practices overall.

Further, a business TLD operated along the lines of our proposal would provide a truly segregated business location, which we believe, will be beneficial to the long term growth and usefulness of the Internet.



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