Further Statement in Support of our ApplicationWe 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.