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Username: cambler
Date/Time: Fri, November 10, 2000 at 10:11 PM GMT (Fri, November 10, 2000 at 2:11 PM PST)
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Subject: Image Online Design Response

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Image Online Design, Inc.'s Response to ICANN's "Report On New TLD Applications" November 10, 2000

ICANN's "Report on New TLD Applications" includes misinformed criticism of Image Online Design's application as well as several outright errors. While we are pleased that we have been recommended for further consideration, and look forward to the negotiation phase as a forum to further educate ICANN on the merits of our proposal, we feel it necessary to correct the record in an open and public manner.

We find it distressing that the five years of Image Online Design's history - including four years of operational experience in running a registry - is being ignored in this process. Particularly troubling is that ICANN should look unfavorably upon existing pioneers.  The report states that IOD's 20,000 registrants are "very modest," which contradicts ICANN's own criteria that list stability and experience among the most important issues in new TLD applications.  Clearly, no other applicant for .Web has our experience as a pioneer registry. In this case, even "modest" is more than "none." With diversity and competition being among the most important criteria ICANN has chosen to consider, the complete disregard for IOD's long history in promoting competition as well as the fact that Afilias (another applicant for .Web) is comprised of companies that represent 98% of the existing market suggests bias in the information the report chooses to highlight.

The report's technical criticisms of IOD are questionable in some cases and completely false in others. For instance, the report criticizes IOD's staffing requirement of 70 people, yet fail to criticize the other .web applicants for the same requirements.  The report criticizes IOD for currently having only one technical employee now, but don't fail to mention that the other two .web applicants list no technical employees. The report falsely states that IOD's registry will provide 28.6 TPS, which is completely incorrect.  Other technical misrepresentations are abundant.

In terms of finances, The ICANN report also criticizes the fee IOD stated in its application for registry services. That fee, $15 per name, was selected after much thought and research.  However, we feel that the market should decide. If, as some suggest, $15 is too high, the market will indicate that and we will lower the price.  It is also important to note that the $6 fee that Network Solutions currently charges is based due to the fact that, for the many years it enjoyed a monopoly, it charged $35 per name per year.  Only because NSI's infrastructure is bought and paid for is the lower cost possible. It should also be noted that Afilias , is charging $6 per name, but shows a loss on their application's financials for the first four years of operation. We fail to see how a registry that loses money year after year can be considered stable. The ICANN staff report also criticizes our assumptions with respect to market share, but fails to substantiate these disagreements, as the independent reports by ICANN's financial consultants has not been made public. In the absence of any evidence, we must respectfully disagree with ICANN's criticism. That said, however, IOD is fully prepared to work with ICANN on any financial disagreements with the goal of reaching a workable projection. This, in our mind, is a key item for the negotiation phase, which we understand from the staff report that we are to shortly enter. We look forward to resolving any problems or disagreements that may remain.

The report also inaccurately represents IOD's funding levels.  IOD's application shows financial commitments of $2 million immediately, $6 million when accepted, and a credit letter open to discussing any additional amount necessary. IOD has already spent approximately $1 million in creating its registry, and has existing infrastructure that the other applicants have yet to even purchase, much less install and test. The ICANN report presumed that the figure of $450,000, which represents cash-on-hand, was the sum and total of IOD's funding. This is, plainly, not the case. IOD has clearly shown that it is sufficiently funded to operate our registry over the past four years.

Finally, the question has been raised as to the six-month timeframe for accepting registrars other than ourselves. IOD had anticipated that it would take six months to finish development and testing of its registrar protocol system, but in the light of clear consensus that this time frame is too long (as expressed directly to IOD as well as the numerous comments on the ICANN public comment forum), we are now committed to 30 to 60 day time frame. NeuStar, another applicant, has listed six to nine months as their timeframe.  Afilias, initially against outside registrars who were not "bought-in" members, has said that they would accept new registrars, but has failed to provide a timetable. While ICANN acknowledges this commitment, it chooses to not consider it, calling it a significant change to the application. It is disturbing that this is how constructive responses to valid criticism are treated. Of course, there was no criticism of either Afilias or NeuStar on their plans or timetables.

ICANN's report seriously misrepresents the technical and financial merits of IOD's application, and shows that there is no technical or financial criticism that stands up to scrutiny. It is our sincere hope that ICANN is not merely laying down the groundwork to refuse IOD's application.

Christopher Ambler
CTO, Image Online Design, Inc.
The .Web Internet Domain Registry
http://webtld.com


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