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U.S. House of Representatives

House Committee on Commerce

Subcommittee on Telecommunications

Hearing on "Is ICANN's Next Generation of Internet Domain name Selection Process Thwarting Competition?"

February 8, 2001

Testimony of Elana Broitman

Director, Policy and Public Affairs

register.com, inc.

Introduction

Mr. Chairman, Members of the Committee,

Thank you for inviting me to appear before you today. I commend the Committee for holding this hearing. Your role is important to continuing the stability and innovative growth of the Internet.

I am here representing register.com, an equity partner in RegistryPro. RegistryPro, as you know, is one of the new registries that was selected by the Internet Corporation for Assigned Names and Numbers (ICANN) to operate a new global Top Level Domain (TLD)(1). RegistryPro is a new company formed by register.com, one of the leading registrars on the Internet today, and Virtual Internet Ltd, a top European registrar.

I am here to provide the perspective of a company that was awarded a new TLD, .pro. Building on the restricted model of .gov, .edu, and .mil, the .pro TLD focuses on professional registrants - such as doctors, lawyers, and accountants. I can also offer the perspective of a registrar. Based on our two years' experience, register.com believes consumers will benefit significantly from the introduction of new TLDs.



Industry Overview

To fully answer the question about the new TLDs, please allow me to briefly review the structure and growth of the domain name market.

Securing a domain name, or Internet address, is the first and fundamental step for businesses, individuals, and organizations that are building a presence on the web. Before setting up a website or launching e-commerce, a consumer contacts a registrar, such as register.com, to secure a domain name, such as www.house.gov. Registrars maintain contact with the consumer, invoice the customer, handle all customer services, and act as the technical interface to the registry on behalf of the customer.

A registry, such as Verisign Global Registry Services for .com, .net and .org, maintains the list of available domain names within its TLD and allocates those names on a first come, first served basis. Registrars get the domain names for the consumer by purchasing them from the registry that manages that TLD.

As this Committee knows, the Internet, and the domain name market in particular, has grown and expanded at a rapid pace. From 1993 to as recently as two years ago, a single company, Network Solutions ("NSI"), today owned by Verisign, was both the only registry and the sole registrar for .com, .net, and .org TLDs. Presently, these TLDs are the only globally available generic domain addresses.

In determining the best manner to introduce competition and oversee the domain name system, the Department of Commerce called for the creation of a not-for-profit corporation. ICANN was recognized to fill that role.

To introduce competition, ICANN has taken two major steps. First in April 1999, ICANN launched a test bed of five registrars. Register.com was the first registrar to go "live" and register .com, .net, and .org names. Although NSI remained the sole registry for the com, .net, and .org TLDs, today there are over 140 accredited registrars. Consumers have benefited from the competition in prices and services.

In November 2000, ICANN took the second step toward competition by approving the introduction of seven new global TLDs to generate competition in the registry business. RegistryPro was selected to manage the .pro TLD, which is restricted to the professional business sector. Other new TLDs include unrestricted, personal, and non-profit domain name sectors.

The domain name market has grown to about 29 million .com, .net, and .org domain names, and growth has increased dramatically since the days of the registrar monopoly, from 8-9 million in 1999, to more than 20 million in 2000, the first full year of competition. This market is projected to grow to over 140 million registrations over the next four years. This growth is fundamental not only to the health and competitiveness of the registrar business community, but the introduction of new TLDs will also expand the opportunity for other Internet-related businesses



Competition among Registries

This Committee has endorsed competition in this sector, knowing that it would deliver value to consumers. It has been proven right. Competition among registrars has improved technology and customer support, introduced price competition, and fostered innovative new products to better serve the needs of domain name holders and Internet businesses.

Competition among registries will similarly deliver value. First, consumers will have a choice among competitive TLDs and registries, leading to improved services. For example, alternative registries may accelerate the launch of websites and make them more secure. Second, consumers can register for the web address of their choice, as the best addresses, in many cases, are already taken in the .com, .net and .org TLDs. Third, consumers will be able to distinguish their web address based on the TLD they chose - we believe, for example, lawyers would prefer .law.pro and accountants, .cpa.pro.

Conversely, delay in launching new TLDs serves to protect the sole global TLD registry and deny consumer choice.

Do not delay launch of new TLDs

While registry competition will not exist until these new TLDs are operational, this will take months of preparation and significant resources. Substantial technological facilities must be built, engineering protocols and software applications written and tested, and highly skilled personnel located and retained. In fact, substantial resources have already been spent and committed - both during the application process and since then.

Not only is competition going to improve the registry sector, it is fundamental to future innovation. New technology is on its way -if new registries are not introduced rapidly, there will be only one company in a position to operate the new technologies and determine the course of their evolution. For example, Verisign launched the worldwide test beds with respect to two recent developments - multilingual domain names, and eNUM, a convergence of telephony and domain names. There were no other competitive registries in place to create an alternative environment.

Moving expeditiously to add these new TLDs to the domain name system is critical.

RegistryPro's experience with the process

As for the process, we believe it achieved the fundamental goals of determining whether an applicant had what it takes to run a successful TLD, and balancing the interest in new TLDs with the imperative to preserve the stability of the Internet.

While notice of its plans to authorize competitor registries has been publicly available for about two years, ICANN posted a set of criteria for assessing new TLD proposals on August 15, 2000:

1. The need to maintain the Internet's stability. ICANN analyzed:

a. the prospects for the continued and unimpaired operation of the TLD,

b. provisions to minimize unscheduled outages due to technical failures or malicious activity of others,

c. provisions to ensure consistent compliance with technical requirements,

d. the effect of the new TLD on the operation of the DNS and the root-server system,

e. measures to promote rapid correction of potential technical difficulties,

f. the protection of domain name holders from the effects of registry or registration system failure, and

g. provisions for orderly and reliable assignment of domain names during the initial period of TLD operation.

1. The extent to which selection of the proposal would lead to an effective "proof of concept" concerning the introduction of top-level domains in the future. Proposals were to be examined for their ability to promote effective evaluation of

a. the feasibility and utility of different types of new TLDs,

b. the effectiveness of different procedures for launching new TLDs,

c. different policies under which the TLDs can be administered in the longer term,

d. different operational models for the registry and registrar functions,

e. different business and economic models under which TLDs can be operated;

f. the market demand for different types of TLDs and DNS services; and

g. different institutional structures for the formulation of registration and operation policies within the TLD.

1. The enhancement of competition for registration services. ICANN noted that though the market will be the ultimate arbiter of competitive merit, the proposals were to be evaluated with regard to whether they enhanced the general goal of competition at both the registry and registrar levels.

2. The enhancement of the utility of DNS. Under this factor, TLDs were to be evaluated as to whether they added to the existing DNS hierarchy without adding confusion. For example does the TLD's name suggest its purpose, or in the case of a restricted TLD, would the restriction assist users in remembering or locating domain names within the TLD?

3. The extent to which the proposal would meet previously unmet needs. Close examination was to be given to whether submitted proposals exhibit a well-conceived plan, backed by sufficient resources, to meet presently unmet needs of the Internet community.

4. The extent to which the proposal would enhance the diversity of the DNS and of registration services generally.

5. The evaluation of delegation of policy-formulation functions for special-purpose TLDs to appropriate organizations.

6. Appropriate protections of rights of others in connection with the operation of the TLD. The types of protections that an application was to address included:

a. a plan for allocation of names during the start-up phase of the TLD,

b. a reasonably accessible and efficient mechanism for resolving domain-name disputes,

c. intellectual property or other protections for third-party interests,

d. adequate provision for Whois service that balances personal privacy and public access to information regarding domain-name registrations, and

e. policies to discourage abusive registration practices.







RegistryPro met ICANN Requirements

We worked hard to meet these requirements. We prepared a detailed description of innovative state-of-the-art technology, which would enhance the usefulness and dependability of the .pro websites. The RegistryPro technology would:

Allow for near real time posting of websites (as opposed to today's 48-hour waiting period),

Diminish the potential for system crashes,

Protect consumers against potential registrar failures, and

Provide better tools to protect against potential cyber squatters or professional imposters.

We proposed an innovative TLD that would add diversity to the current domain name space and address the needs of the marketplace. Based on our surveys of consumers and professionals, we determined that consumers were looking for a trusted way to identify professionals on the Internet, and professionals would be more inclined to register domain names if they had a designated address.

In devising that trusted addressing system, we have reached out to professional associations, to work out the mechanisms for verifying professional credentials.

We also outlined a set of policies to address the needs of various constituencies. We balanced intellectual property protections, which earned us one of the highest ratings by the intellectual property constituency, with personal privacy concerns. We also guaranteed a level playing field for all accredited registrars.

We invested hundreds of thousands of dollars - including in market research, legal drafting, and financial analysis - to prepare the application. The build out and operation of a stable and secure registry requires a commitment of millions more.

We believe that our application, like others, received substantial scrutiny - by the independent panels of international experts in technology, law and finance; by ICANN staff, by the public during several public comment periods; and ultimately by significant independent deliberation by the ICANN Board. There was an opportunity for applicants to clarify their documents, on the public record. While no process is perfect, we believe a genuine effort was made by ICANN to provide notice, transparency and due process.

Ultimate Goal Accomplished

ICANN accomplished the ultimate goal of launching new global TLDs while protecting the security of the Internet. These new TLDs offer a variety of business models and domain name addresses - from generic to non-profit. Incremental growth will protect stability and pave the way for future development.

As the Chairman had noted in the last hearing on this topic, ICANN is responsible for introducing competition into the registration of domain names. We hope that the Committee's conclusion today is an endorsement of an expeditious launch of these new TLDs, so that consumers can benefit from the resulting innovation and the availability of new domain names.

Mr. Chairman, Members of the Committee - it has been my pleasure to testify today. Thank you for the opportunity.

1.

1 A TLD is the domain name address, such as .com, .net, and .org. The new TLDs would be .pro, .info, .biz, .name, .aero, .museum, and .coop.