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SRS - Framework and Business Rules 20/11/01

20 November 2001

InternetNZ Council

SRS - Framework and Business Rules for the Domain Name Shared Registry for .nz

1. At your October meeting, you were presented with an overview of the proposed framework and business rules for the SRS. This presentation supplemented the document you received prior to the meeting, The Framework and Business Rules for the Domain Name Shared Registry for .nz, SRS Implementation, October 2001.

2. Following the Council meeting, the SRS Implementation Team traveled around the main centres with an extended version of the presentation for .nz providers. A copy of the presentation and the Framework and Business Rules document was provided to each attendee at these. The same presentation was given to Wellington-based InternetNZ members.

3. The concepts and ideas in the Framework and Business Rules for the SRS have been derived from a number of sources including:

  • The Hine Working Group report
  • Material from other registries and ccTLDs
  • Feedback from members on the various lists to earlier discussion documents
  • One-on-one discussions with fifteen of the top .nz providers including Domainz (and input from some smaller providers)
  • Feedback from six presentations to .nz providers and one presentation to members.

4. The registry business model and rules have been refined during these processes and it is now time for the key requirements to be signed off so that design and development of the registry software can commence.

5. Throughout the process there has been a need to maintain a balance between the often conflicting requirements to establish a competitive registrar market with low entry requirements, while safeguarding registrants' rights. The Hine Report has been used to establish the high level requirements with our own research plus feedback from providers and members assisting with filling in the detail underneath the high level requirements.

Registration and Billing

6. There is only one area where the SRS Implementation Team has extended the thinking set out in the Hine Report. This is in the area of the registration period and billing. The Hine Report recommended that:

"ISOCNZ should revise its charging policy to encourage registry charging to:

- Be focused on the registrar as a customer

- Reflect a registrar's use of the register

- Be independent of any contract or agreement between registrar and registrant" [1]

7. The Hine Working Group proposed a billing model that consisted of two monthly components:

  • A fixed monthly component representing not less than the cost of maintaining the registrar's accreditation including billing, technical support etc;
  • A variable component based on the cost of the number of registered names stored by a registrar and/or the number of transactions completed by the registrar.

In effect, this means that a domain name is current while a registrar continues to maintain the name in the register. The concept of an annual (or longer) registration term would no longer be available. The intention was to create a very simple billing model that minimised management costs for both the registry and registrar.

8. The concept of monthly billing appears to be unique to New Zealand. It provides total administrative simplicity for both registrars and the registry but does not necessarily meet the needs of registrants. Registrants, particularly business users, do not see domain name registration charges as a significant cost. Their domain name is often tied up with other intellectual property rights associated with their branding and marketing. Securing this on a month by month basis only is inadequate and could result in a move away from .co.nz domain names for corporates. It is proposed therefore that the following principles for registry domain name charges are adopted:

  • Domain name registrations will be charged on a monthly basis
  • All registrars will be charged on the same basis regardless of the number of registrations for which they are the designated registrar
  • Registrants can, at their discretion, choose to purchase multiples of months (up to a maximum of 120 months) for their domain name registration(s)
  • Where a registrant wishes to purchase multiple months, their registrar is obliged to make this entry/transaction in the register.

9. While this adds some complexity in terms of billing, the separation of the domain name register and registrar billing seeks to minimise this. Details of the interface between the billing and register software were presented to you during the October Council meeting. Independent advice from the Hunter Group has been sought on this specific issue.

10. The benefits of the approach proposed by the SRS Implementation Team include:

  • Better safeguarding of registrants' rights from registrar failure and unscrupulous registrars
  • Opportunities for enhancing competition between registrars as they bundle service packages and registration terms.

Billing/Registration Term

11. The SRS Implementation Team has proposed a maximum term of 120 months - 10 years. Concerns have been raised about any potential fiscal risk arising from such a long term, and any obligations the term might impose on InternetNZ to maintain domain name registrations into the future (given the pace of Internet and technology development). [2]

12. There would be fiscal risk if .nz is mismanaged by :

  • the registry fees never being reviewed, and
  • there is no growth in .nz domain name registrations, and
  • .registry costs rise, and
  • .the unearned income portion of the fee is spent on other activities and/or not managed carefully.

13. The availability of longer periods for registration will also not be adopted by all registrants. There will be registrants who will find a monthly arrangement acceptable, others who wish to retain an annual term, and others who want to secure a name for a specific fixed term related to an event. There will also continue to be new registrations. This, combined with regular reviews of the registry fee model inputs (on an annual basis) will provide adequate safeguards against financial disaster. The annual fees model review will involve an analysis of costs, revenue, and domain name registrations (and projections) so that adjustments to the domain name/month fee can take be made.

14. The unearned income portion of the fee (i.e. the payment for out-years) will need to be carefully managed. A conservative investment strategy for these payments must be adopted (e.g.- investment in New Zealand Government Bonds or similar bonds/stock). The investment strategy and reporting of results should be open and transparent.

Conclusion

15. The Hine Report has provided the basis for the development of the framework and business rules for .nz. The detail has been developed through input from .nz providers, InternetNZ members and overseas registries. The requirements needs to be signed off so that the process for selecting the design and development can continue. A Request for Proposal has been issued and the participants need to have certainty around what they are formulating their proposals around. The current version of the Framework and Business Rules document (attached) has been given to them and this will form the basis for their estimates.

Recommendations

 16. It is recommended that the InternetNZ Council:

 (a) note the process used for developing the business processes and rules for the SRS;

 (b) note the comments above in relation to the billing/registration term; and

 (c) approve The Framework and Business Rules for the Domain Name Shared Registry for .nz (v1.0, 20 November) as the basis for the SRS development.

  Rose Percival

SRS Implementation

 

 [1] Review of Registry Structure of the.nz ccTLD, Final Report, 20 October 2000, Recommendation 8

[2] CIRA (.ca) offers registration periods of between 1 and 10 years.

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