Draft Report 19/06/00

Review of Registry Structure of the .nz ccTLDReview of the Registry/Registrar Framework for the .nz ccTLD

Document Status

Published 19 June 2000.

This Draft Report continues the process of reviewing the framework for the .nz domain name space. The report has been published today to allow for discussion leading up to and at the ISOCNZ AGM on 23 June. The drafters have not been able to incorporate all the responses to and discussion of its first draft within this draft. There remain issues to be resolved as indicated by the revised recommendations found in the report.

Executive Summary

In response to its first draft the working group has received significant input which has helped it to develop a deeper definition of the issues and to refine its direction and recommendations. The working group has not yet formed an opinion on the relative advantages and disadvantages of the thick and thin shared registry models.

Recommendation 1. The working group is of the firm opinion that ISOCNZ should alter its policy to remove the registration function from the registry. The registry should focus on registrars as its customers.

Recommendation 2. 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.
• Include either a fixed or minimum monthly charge set at a level to discourage registrars managing less than 100 names.
• Be independent of any contract or agreement between registrar and registrant.

Recommendation 3. ISOCNZ establish policy setting standards for the proper governance of the relationship between registry, registrar and registrant.

Recommendation 4. ISOCNZ adopt, possibly with modification, one of the above statements of best practice; or, if necessary, draft their own statement of best practice. This statement should be instrumental in the governance of the registry and in the development of working relationships with registrars.

Recommendation 5. A standing committee be established to maintain communication between the registry and registrars. The standing committee should be chaired by a member of the ISOCNZ Council and should include technical representatives from the registry and a minimum of two different registrars. (This committee might replace the current ISOCNZ Technical Committee.)

Recommendation 6. Additional discussion and study should be undertaken to better understand the advantages and disadvantages of a structural versus a contractual solution to the question of protecting the registrant's rights to their name. Within a structural solution it will be necessary to accurately assess the level of authentication that would be appropriate.

Recommendation 7. The criteria for accreditation should be reviewed once the structure of the registry is determined.

Recommendation 8. Moderated domains should continue to be handled by the registry.

Recommendation 9. The working group should continue to resolve the develop the relative advantages and disadvantages of the structural and contractual approaches to a registry model.

Mandate

Within New Zealand responsibility for the .nz domain name space rests with the Internet Society of New Zealand. The Objects of the Society include:

• To promote the competitive provision of Internet access, services and facilities in an open and uncapturable environment;
• To develop, maintain, evolve, and disseminate standards for the Internet and its inter-networking technologies and applications; and
• To coordinate activities at a national level pertaining to good management of centralised systems and resources which facilitate the development of the Internet, including but not limited to the Domain Name System;

At the Society's AGM held in December 1999 a motion was carried:

• That ISOCNZ Council set up an open working group to investigate a full proposal on possible shared registration systems and other registry models after consultation with Domainz.

The working group was established at the Council meeting of 31 March 2000. The membership of the working group was:

• John H. Hine, Victoria University of Wellington (Chair)
• David Farrar, Office of the Leader of the Opposition
• Steven Heath, SeraNova
• Rick Shera, Lowndes Jordan Barristers & Solicitors
• Don Stokes, Independent Consultant
• Peter Dengate-Thrush (ex-officio) Chair of ISOCNZ
• Sue Leader (ex-officio) Executive Director of ISOCNZ

David Farrar resigned from the Working Group on 18 April and Peter Dengate-Thrush withdrew on 19 April 2000.

Definitions

The Domain Name System (DNS) is the system used by the Internet to translate domain names such as isocnz.org.nz into network addresses that allow one computer to connect to another. There are approximately 250 top-level domains. The majority of these are country code top level domains, ccTLDs . These names all use the two letter ISO-3166 standard abbreviations for country names. There are also seven generic top level domains, gTLDs . Ideally these would all be international in nature. For historic reasons some such as .org and .com are and others are focused on the United States.

Within the .nz ccTLD there are currently ten second level domains (2LDs), each representing a separate community of interest.

In discussing the roles that are found in the management and operation of the DNS the working group has chosen to adopt terminology already broadly accepted in the Internet community.

Registrant An entity with rights to the use of a domain name within the .nz name space. (Current practice within New Zealand also often refers to the registrant as the name holder .)

Register The central database holding all information required by the Domain Name System, and possibly additional data, for .nz. The register is the authoritative source for the creation of the primary zone files for .nz.

Registry The organisation holding and operating the register. The nature of the Domain Name System requires that there is one register. It's operation is a natural monopoly.

Registrar An entity that registers names with the registry on behalf of registrants. Registration of domain names is seldom the core business of a registrar. Agent An entity that registers names through a registrar on behalf of registrants. An agent is usually differentiated from a registrar on the basis of indirect access to the register compared with a registrar's direct access.

Terms of Reference

The terms of reference of the working group as resolved by the Council of ISOCNZ on 31 March 2000 are:

1. Ascertain the requirements and views of the New Zealand Internet community with respect to the appropriate framework for a shared registration system including the rights, responsibilities and relationships among the registry, registrars and registrants.
2. Determine any constraints placed on a shared registry system by any RFC or other national or international convention applicable to the .nz name space.
3. Recommend to the ISOCNZ membership new and/or revised policy on a shared registration system including:
   1. Rights, responsibilities, obligations and duties of registrants, registrars and the registry.
   2. Any limitations that should be placed on the business or technical relationships between registrant/registry, registrant/registrar and registrar/registry.
   3. Any quality of service performance requirements that should be placed on the registrars, registry and/or registrants.

Background

ISOCNZ was established in 1995 to maintain a degree of "public good" control over the development of the Internet in New Zealand. This included the operation of the Domain Name System (DNS). At the time the University of Waikato managed and operated the register. Both the University of Waikato and Victoria University of Wellington accepted new registrations, each looking after a different set of second level domains within .nz.

ISOCNZ established a number of working groups and committees throughout 1996 and 1997 to establish policy governing the .nz ccTLD and to take over the management and operation of the DNS for .nz. The following summarizes the outputs of these efforts and the current situation.

• A company, the New Zealand Internet Registry Ltd., was established to take responsibility for the day-to-day management of the DNS. NZIRL trades as Domainz. ISOCNZ retained the policy making role for .nz including the DNS.
• Domainz has progressively migrated the various components of the operation of the DNS from the Universities to itself. This migration was completed in May 2000 when Domainz took responsibility for the operation of the register from the University of Waikato.
• In August 1997 the Council of ISOCNZ approved as policy the document Future Development of the .nz Domain Name Space [ 1 ]. This document is principally concerned with names within .nz.
• A second policy document, DNS Administration within New Zealand [ 2 ], was also approved by Council in August 1997. This document envisioned NZIRL acting in the role of contract manager with much of the operational components of the DNS tendered to different companies. Tendering has not proceeded. Comment on the lack of progress with tendering can be found in [ 3 ].

A further policy document is The New Zealand Domain Name Structure [ 4 ]. This document clearly states the "first come, first served" principal upon which names are allocated within all unmoderated 2LDs within .nz. The working group is unsure of the authorship and authority of this document which combines various ISOCNZ and Domainz policies.

The paper DNS Administration within New Zealand is current ISOCNZ policy and has provided the framework within which Domainz and ISOCNZ have developed DNS management and services. It states a set of values:

• ISOCNZ views the following items as important when discussing the future provision of DNS services:
• Of paramount importance is the continued reliability of the Internet.
• We wish to ensure that the New Zealand Internet remains "open and uncapturable".
• Consequently we wish to allow and promote competition in service provision as far as possible.
• Areas where competition is not possible should be strictly delineated and put up for tender.

The document envisions Domainz operating a registry function with registrants having the choice of registering names directly with the registry or through a value added agent such as an ISP. The analogy is with the insurance industry. This document predated the distinction drawn today between a registrar and an agent.

Concurrent with developments in New Zealand the international situation has also changed dramatically. Control of the generic top level domains that are not United States centric has been passed from the United States Government to the Internet Corporation for Assigned Names and Numbers (ICANN).

The World Intellectual Property Organisation (WIPO) has also increased its interest in the Internet and in domain names in recent years. While the organisation's focus is on intellectual property rights the The Final Report of the WIPO Internet Domain Name Process [ 5 ] contains considerable input on the operations of registrars and to a lesser extent registries.

In his paper, Governance in the .NZ DNS - A Position Paper [ 6 ] presented to ISOCNZ's April 1999 Summit on DNS developments, Patrick O'Brien, CEO of Domainz, cited a number of possible impacts of the ICANN process on the .nz domain name space.

1. ICANN addressed the issue of the monopoly operation of the registry for the gTLDs by developing a model of a shared registry system (SRS). O'Brien suggested that this model or some variant may be appropriate for use in ccTLDs such as .nz.
2. ICANN has required gTLD registrars to make use of a dispute resolution procedure in situations where disagreements arise over the rights to the use of a name. To date the requirement to use this procedure is restricted to the gTLDs, however the intellectual property lobby would like to see that requirement extended to the ccTLDs.
3. ICANN imposes strict accreditation guidelines on registrars in gTLD name spaces. It is possible that it may seek to impose similar guidelines on registrars in lightly regulated ccTLDs.
4. ICANN requires gTLD registrars to submit a daily escrow of their registers. It is possible that it may seek to extend this requirement to ccTLDs as well as gTLDs.

Since O'Brien's paper was written ICANN has developed one SRS model to include a registry that offers no services to registrants, holds minimal information in the register and deals solely with accredited registrars. ICANN has not progressed the remaining issues having higher priority concerns. One reasonable certainty is that ICANN will be seeking contractual arrangements with all ccTLDs as a method for securing funding. This will provide an opportunity for ICANN and the ccTLD to negotiate on other issues.

Domainz and the .nz Name Space

The statistics included in the following description of the services currently provided by Domainz have been supplied by Domainz.

As of the end of May there are approximately 64,000 domain names registered within .nz. The vase majority of these are in the .co second level domain.

Domainz is the authoritative source for contact information for 100% of names within the .nz name space.

Consistent with the policy expressed in [ 2 ] Domainz accepts new registrations directly from registrants and also through intermediaries. Approximately 95% of the names currently registered have been registered through an intermediary and 5% have been registered directly with Domainz. Approximately 185 intermediaries have registered 30 or more names.

In April 2000 the top 10 intermediaries had registered the the following numbers of names:

These top ten account for half of all names registered within .nz. The 5% of names registered directly with Domainz places it at about the same level as Register.com.

Of the names registered about 50% have had contact information changed by an intermediary, 30% have been changed by the registrant and 20% have had no changes. Thus a higher percentage of registrants have been willing to effect changes of information than to establish a new name. The working group believe that this reflects the technical expertise required to initially establish a name as opposed to the ease with which a field can be changed using a web-based form.

Maintaining the accuracy of contact details has been a problem. In 1998 40% of registrant contact details were invalid. This was measured by the percentage of invoices that were initially returned because the address was invalid. Today that figure is down to 10-15%.

Domainz charges registrants on an annual basis. Today Domainz invoices 80% of registrants directly and the remaining 20% through about 200 intermediaries. Domainz's stated goal is to reverse these figures reducing direct invoices to 25% of registrants.

While the focus of this review is on the relationships between registry, registrar and registrant we should not forget that the end goal is the functioning of the DNS. Domainz currently builds new zone files twice daily, seven days a week.

ISOCNZ policy clearly makes a registrant's control of its name(s) paramount. Currently, a registrant always has recourse to Domainz to rectify problems. Domainz achieves authentication with a password system, issuing a password to each registrant. The password may be used by the registrant to gain direct access to their record in the register.

A portion of second level domains within .nz are moderated. The names registered within these domains are less than 1% of all registrations. Registration of a new name within a moderated domain used to require manual intervention, but is now handled by automatically forwarding an e-mail request to the moderator.

Customer enquiries are an important aspect of Domainz's day to day operations. Currently 50% of enquiries are billing related, less than 5% are technical and about 10% relate to lost passwords.

Domainz does not provide additional services to registrants. In particular, Domainz does not host domain names.

Consultations and Submissions

Input was solicited in a variety of ways.

The working group established a project web site at http://www.isocnz.org.nz/dns/dns-dmr00-index2.html and a discussion mailing list, model-review@isocnz.org.nz, for the project.

The working group sent announcements to the relevant on-line mailing lists indicating that the terms of reference and background information were available on the web site. These lists included ISOCNZ's public and members lists and the New Zealand network operators group list.

The working group mailed an announcement of the review and the terms of reference to:

• ISOCNZ's list of Internet industry businesses,
• relevant professional groups such as TUANZ and ITANZ,
• relevant government departments, and
• miscellaneous organisations such as the Consumers Institute.

A total of 122 organisations were contacted directly and asked to contribute.

All announcements welcomed submissions and these have been posted on the project web site to promote further discussion.

The working group held open forums in Auckland and Wellington.

The working group visited four of the top ten users of the current system and has made two visits to Domainz. One of those was specifically targeted at learning about the new Domainz Registration System.

The working group sought information from the web sites of ICANN, CENTER, and a number of ccTLDs. Additional input was sought and obtained from the Swedish NIC and Canada's CirA

Members of the working group have participated in the discussion on the model-review mailing list.

Appendix A lists the input the working group received. The working group appreciates the time individuals have taken to assist it with its work.

The working group is disappointed that there has not been input from a broader portion of the community. Name holders have shown little interest, which may indicate that the issue is too arcane to motivate the typical internet user. In many cases input was received from employees of organisations rather than from the organisations themselves. This may reflect that name registration is seldom a significant part of an organisation's business but a key responsibility for technical staff.

While input has been limited the working group has heard from and/or met with a number of the larger users of the current system. The lack of additional input, especially reaction to the first draft report, can only encourage the conclusion that the community is satisfied that input received to date is consistent with their own views. The following paragraphs present the key issues that have been raised through the consultation process.

Ownership of Names . The community is united in support for the current policy that a registrant's rights over their domain name(s) is paramount. A registrant's instructions should always be followed in full whether issued to an agent, a registrar or the registry. No instructions should be actioned without the registrant's authority.

Registrant Benefits . The system should be run for the benefit of the registrants. The current system successfully and rapidly registers names. From May 2000 the cost of registration, which is currently not seen as an issue, will reduce.

Business Relationships . Registering a domain name is simple and the consequences should also be simple. Registrants do not want multiple contracts or invoices and other communication from a registry they are unaware of. Registrants are confused about who to contact with problems, they contact their ISP about domain name problems and Domainz about network problems. These multiple relationships also cause problems for registrars/agents.

The Domain Name Market . There is a developing market which is seeing a requirement for varied needs: permanent registration, short-term registration, parking, trustee registration (e.g. company start up situation). Potential registrars include law firms acting on behalf of clients to register names in the same way that they incorporate companies online at the Companies Office on behalf of clients. The current "one model fits all" approach is inadequate; there is no single registrar that is right for all registrants.

Ownership of Register Data . The community asserts that the data held in the register is not owned or controlled whether structurally or by contract) by any registrar or the registry. The data is held on behalf of the registrants. The ownership of the register itself (schema, software, etc.) is less an issue as long as the registry is owned or controlled by ISOCNZ.

Monopoly and Competition . The role of the registry in managing the register for the .nz domain name space is a natural monopoly. The management of the monopoly operation should not have the potential to use its position to (1) artificially increase the price of a domain name; (2) reduce the range of services available to registrants; or (3) hinder the development of registrars or agents making use of its services.

Best Practice . A registry owned by ISOCNZ should operate in a manner consistent with ISOCNZ's stated objects. It is also a monopoly and as such should not fear competition or the risk of disclosure of corporate information. Rather it should operate in a cooperative manner to foster the broadest development of the Internet within New Zealand.

Combined Registry/Registrar . It is unfair to make other registrars compete against a registrar that controls the registry. A single business performing as both a registrar and a registry has an obvious conflict of interest and is likely to focus on the registrar business at the expense of the registry business. The current situation is given as evidence of this.

An SRS Architecture . Several submissions proposed specific alternative frameworks for the DNS within New Zealand. While differing in some detail they were generally consistent in the major aspects of the architecture.

• The registry is the necessary monopoly. As such it should be minimal and should not constrain competition amongst multiple registrars.
• Registrars would directly update the register through an interface provided by the registry.
• Registrars would be free to set fees and design services as they see fit.
• The registry should be run independently of any registrar and on a cost recovery basis.
• A "special case" must be made for moderated domains. Suggestions included a registry function that would make moderation transparent to registrars and registrars dedicated to specific moderated domains.
• The register should contain relatively minimal information. The double storage of identical information in two databases should be minimised.
• Any barrier to becoming a registrar should be minimal.
• The registry should have a "technical" focus with an emphasis on providing robust and highly available services. There should be regular (e.g. weekly) liaison between the registry and the registrars to ensure a seamless operational interface.
• The "customer" focus should be the responsibility of the registrar. Registrants deal only with registrars and/or agents.

Registrant Rights . Both forums spent considerable time discussing how the rights of a Registrant might be upheld in a SRS model as described above. There were two key conclusions:

• The registrant should always be able to confirm the information held in the register about their name and themselves.
• The registry must be able to initiate contact with the registrant if for any reason the linkage through a registrar becomes broken; for example, if the registrar were to fail.

Policy . ISOCNZ policy making is valuable and should be paid for by those that benefit. With respect to the DNS the beneficiaries are registrants and registrars.

Change . Change always incurs a cost, however change to an interface used by several hundred organisations can incur considerable cost. If possible, the current interface should be preserved for a reasonable period.

Findings

The working group considers it appropriate to consider both the performance of the current model and the performance of ISOCNZ and Domainz within the current model against both the objects of the Society and the values set out in DNS Administration with New Zealand [ 2] and paragraph 12.

Domainz has been very successful in migrating domain name registration from a volunteer project at Waikato and Victoria Universities to a business.

• It has supports approximately 64,000 registered domain names within the .nz namespace as of May 2000.
• Its performance with respect to registration has been outstanding, indeed in terms of the efficiency of its registration system it justifiably claims to be a world leader.
• The DNS itself, i.e. the translation of names to addresses has functioned without problem under Domainz's control.
• It has successfully resolved issues such as the validity of the first come first served policy.

Through April 2000 Waikato physically managed the register under contract to Domainz, while Domainz developed the business of registering names, invoicing etc. Within the strict definitions of registrar and registry Domainz served as a registrar and Waikato University was the registry. This has confused the role of Domainz in the eyes of the community. From May 2000, with the introduction of its new registration system, Domainz has clearly assumed the role of registry, looking after the register directly as well as continuing with the registration of names. Domainz also continues to offer direct registration to registrants and thus also plays the role of a registrar. In April 2000 it was the registry's fifth or sixth largest customer.

In other areas Domainz's operations may be viewed as confusing the roles of registry and registrar, but this largely depends on the functions one assigns to each role. The set of functions that should be assigned to a registry and registrar are not clearly defined. Domainz currently maintains a billing relationship with 80% of its registrants and a password for 100%. Other ccTLD registries have similar relationships with registrants.

• The United Kingdom's Nominet has a contractual relationship between the registry and the registrant. Registrants may be billed directly and are issued identifying certificates to handle authentication.
• The Swedish NIC requires all registrations to be done through a registrar, but that is the end of the relationship between registrar and registrant. The registry issues certificates to registrants to be used as authentication if needed and bills them directly. DNS operators such as ISPs handle initial and subsequent delegations.
• Internet Names Australia is responsible for the com.au second level domain. It maintains a contractual relationship with each registrant, carries out billing and issues passwords.

Canada's new registry, CirA, is developing a model similar to Nominet. CirA plans to involve the registrant directly in all transactions, receiving notifications for non-critical changes and being required to acknowledge critical changes as part of the process. Billing is done through registrars. Thus, while CirA will not deal directly with registrants they will need to issues authentication keys to all registrants.

Domainz is also acting consistently with Nominet in attempting to reduce direct billing to a minimum by introducing significant price differentials favouring the use of a registrar. CirA, while borrowing heavily from Nominet's design has anticipated this trend and will do all billing through registrars.

In its own submission Domainz acknowledges that it views its business as being more than looking after the register. It states "We also recognise that certain categories of customer such as patent lawyers take an active interest, and in future, special facilities may need to be provided for such users ...". Elsewhere it states "... we believe that the country code registries may need to be even more competitive (price and service) given the opening up of the gTLD space." Both of these statements envision enhancing services above and beyond the minimal monopoly that ISOCNZ has mandated and confuse the issue of whether or not Domainz acts as a registrar.

Domainz's position as both a registry and a registrar creates a conflict of interest with respect to the operations of the registry for the benefit of other registrars.

Ideally Domainz would present the same registry interface to all registrars including itself. This interface would be designed to have minimal impact on the nature of services that registrars might offer to registrants. Instead we find that Domainz uses a single business model for both registrant and registrar.

• The annual billing cycle does not fit well with some registrar's business systems. Consequently these registrars have chosen not to re-bill and Domainz has billed directly. Customers are often confused by the bills received from Domainz.
• Customers lose their password, or may never have been given it, and expect their registrar to help them re-establish authentication. Registrar's cannot do this.
• Customers are often confused by unsolicited messages from Domainz.

Domainz has provided an excellent service to registrants who are happy to register a name on a long term basis and make annual payments to Domainz for that registration. This reflects a customer focus on registrants which is wholly appropriate for those registrants who register directly with Domainz. This model has also been the only one available to registrars. The working group has been told that this has inhibited the development of alternative services that some registrars would like to offer and confused registrants as to whether the registrar or Domainz is responsible for resolution of a particular problem.

Domainz accredits other registrars to use the registry. While there is no evidence that this has been abused there is a clear conflict of interest.

The working group interprets the objects of ISOCNZ and the values given in [ 2 ] to mean that the registry should operate in a cooperative fashion to facilitate the operation and development of the Internet in New Zealand and should not abuse its monopoly status. There has been broad based comment and complaint about Domainz's lack of consultation, particularly on technical interfaces. The working group notes that Domainz is not perceived as operating in the fashion just described.

At the time original policy for the .nz namespace was being developed there was deep concern for the rights of name holders (registrants). With respect to the DNS the phrase "open and uncapturable" was interpreted to mean that no rightful registrant of a name could have that name taken away or constrained in a manner that prevented the registrant from having a free choice of service provider.

• A Registrant has the use of any name for which it holds intellectual property rights, e.g. trade marks.
• A Registrant's instructions with respect to its domain name(s) will be followed promptly and accurately.
• No instructions with respect to a Registrant's domain name(s) will be followed unless they are issued with the authority of the Registrant (either directly or indirectly).
• The cost of domain name registration within .nz will be internationally competitive with due consideration for the scale of the name space.
• The market for services related to domain names will be open and competitive with no significant barriers to the entry of new services.

The preceding list reveals conflicting pressures in current ISOCNZ policy. Domainz's current position as both registry and registrar is at odds with the intent of ISOCNZ in [ 2 ] to establish a minimal service representing only the monopoly component of the DNS operation. However this position arose because ISOCNZ required registrants to have direct access to the registry as a way of protecting their rights to their domain name(s). Domainz has chosen to provide this protection by issuing an id and password to all registrants.

The requirement for annual and direct billing of registrants will also be found in [ 2 ]. Thus it is ISOCNZ policy that has established the relationships that Domainz now holds with registrants. It is also ISOCNZ policy that has led to significant customer support efforts which lift the cost of a domain name.

It has become evident to the working group that the range of relationships that may exist among a registrant, a registrar and the registry is a source of considerable confusion and may be a principal problem.

• A registrant may deal directly with the registry assuming all responsibility for registration, maintenance of information and payment.
• A registrant may have its name initially registered by a registrar, but may then be asked to assume subsequent maintenance and payment.
• A registrant may have a registrar do initial registration and provide ongoing maintenance but expect the registrant to handle payment.
• A registrar may handle initial registration, ongoing maintenance and payment but provide the registrant with the registry user id and password.
• A registrant may have the registry hidden by a registrar that does the initial registration, rolls payment into its other charges and provides ongoing maintenance. Such a registrant may be surprised when it receives a communication from the registry.

Key Issues

As the working group has come to fully understand the issues involved it has become clear that the question is not so much "Should ISOCNZ adopt a shared registry?" but "What form of shared registry should ISOCNZ policy specify?" It has always been the intent of ISOCNZ that what is now called the registry should be shared amongst competing users, today identified as registrars. The key questions are:

• What are the appropriate interfaces between registry, registrar and registrant?
• Should the organisation that is the registry be able to also act as a registrar?

The working group believes that these questions must be satisfactorily answered before other issues of detail can be addressed. To do this the working group suggests three possible models composed of different responses to the preceding questions. While other models are possible the working group has restricted itself to those that can be achieved with modifications to current ISOCNZ policy that are consistent with the objects of ISOCNZ and the values listed in [ 2 ]. We have also considered the current level of investment in Domainz's systems; the likely impact and cost of a change to the Domainz interface currently used by agents; and the range of input received from the community.

• A thick registry model. This is essentially the model currently used in many ccTLDs that do not allow direct registration by registrants. All registration and billing is through registrars. The registry maintains a relationship with all registrants which may be viewed as a structural solution to giving registrants control. Generally the registry will issue a certificate, password or authentication key to all registrants and undertake to support this.
• A thin registry model. This is similar to the ICANN model for gTLDs. The registry holds a bare minimum of information other than that needed for the zone files and has no dealings what so ever with registrants. In this case we rely on contracts between ISOCNZ or the registry and registrars to enforce registrants control over their names.
• A combined thick registry and registrar. This is the thick registry model that also supports direct registration. This is close to the current Domainz model and could be achieved by modifications to Domainz's current practices. ISOCNZ governance would be required to ensure that Domainz did not take advantage of its control of the register to either assist its registrar business or hinder other registrars.

We have chosen not to include the combination of a thin registry with a registrar. To the working group these two businesses seem so far apart that they may as well be considered as the thin registry option.

In the following table we have attempted to summarise the advantages to different stake holders of each of the above architectures. During our consultations it became clear that some organisations wished to become registrars for the purpose of dealing in domain names while others would only become registrars because of the likely efficiencies of registration. For this reason we have divided registrars into two groups. The advantages for each stake holder are identified in the table by a characteristic identifier. Expanded explanations of each characteristic follow the table.

• Transfer . A registrant's ability to easily transfer names from one registrar to another must be supported by contract in a thin registry model. This is untested. A thick registry model uses structure to enforce this and has been shown to work well in several ccTLDs.
• Choice . The working group is of the view that competition will inevitably lead to new and innovative ways to provide services to registrants. This can only assist growth and development of the Internet in New Zealand. This is best facilitated by continuing the policy of delineating the monopoly function of the registry from all registrars.
• Privacy . Where a registrant's information is the responsibility of the organisation that they have a contract with the registrant has greater control over privacy and use of information and knowledge of where that information is held.
• Single Contract . A thin registry model is designed to hide the registry from registrants. Registrants have a business relationship with a single registrar. (The role of agents is ignored in all options.)
• Stability . The current Domainz registration interface is preserved meaning that no business is required to change interfaces until such time as it feels that a change is the proper business decision. In both the thin registry and the thick registry with registrar the current DRS would be preserved. In the thick registry model some registrants would be required to move to a registrar.
• Transparency . The separate costs of the registry and registrar functions are transparent. This is true when the registry is fully separated from the registrar.
• Fairness . All agents or registrars are on an equal footing. No single organisation has an advantage over its "equals" as a result of control of the registry.
• Continuity . Domainz's current business model will be able to continue with minimum disruption.
• Independence . In a competitive registrar market there would be no need for external governance of Domainz's actions.
• Focus . Without the need to balance competing requirements of the registry and registrar businesses Domainz would have a single, simpler focus and a better defined relationship with the rest of the industry.
• Efficiency . Competition should lead to efficiencies in the registrar business. In a wider sense, there is an efficiency gain in reducing duplication of databases and the need for multiple databases to be updated.
• Search . With a thick registry the user community would only need to search a single site to obtain information about a domain name.
• Reliability . The separate registry would have a narrower focus on the availability and reliability of the DNS service to the community.
• Transition . Leaving the registry with Domainz, in one form or another, will reduce the effort and cost of moving to a new system.
• Freedom . With a simpler organisation to manage ISOCNZ will be free from managing a business enabling it to focus on a broader range of Internet issues. The boundary between policy and operations will be more clearly defined.

A number of the judgments in listing these advantages are subjective. They assume that a range of benefits will come from increased competition. Some may argue that competition already exists between agents and between domains, e.g. .com and .co.nz. The working group does not accept this argument. We have received sufficient evidence to indicate that current Domainz policies limit agents' options. We have also been told several times that many registrants are seeking a New Zealand identity such as a name in .co.nz. Finally, it must also be recognised that the aim of competition is of itself one which is mandated by ISOCNZ objects.

The working group believes that the previous analysis shows the advantages of a separate registry, but does not indicate a clear benefit for the thick registry model or the thin registry model. Add to this the aim of fostering competition and we believe the model combining a thick registry and registrar can be eliminated from further consideration.

Recommendation 1: The working group is of the firm opinion that ISOCNZ should alter its policy to remove the registration function from the registry. The registry should focus on registrars as its customers.

The principal advantages are seen to be:

• This change should create a level playing field that will foster competition in the registrar market and lead to a greater range of services and options for registrants.
• The registry will be an entity independent of any registrar and will have as its sole focus the efficient operation of the register and the DNS.
• The sum of the expectations of registrants ( para 49 ) will best be maximised by a separate registry and all of the rights can be preserved without direct access to the registry.
• ISOCNZ will, in due course, have a much simpler business to govern allowing it to focus on all of its objects.

The working group has not yet formed a clear opinion on the question of the thin versus thick registry model. Our first draft report generated considerable discussion, much of it focused on the pros and cons of the differences between these two models and possible intermediate models. That discussion continues and it would be premature for the working group to make a choice at this time. The following section discusses the impact of the choice between thick and thin on a number of consequential issues.

Consequential Issues

Choosing a "shared registry" model is but the first step in setting out a complete policy framework for the .nz domain name space. The ccTLD registries that the working group has referenced have unanimously selected thick registry models. ICANN has specified a thin registry model for the gTLD names spaces. The reasons behind these choices are seldom available but one suspects they involve a mixture of politics, business and technical factors.

There remain a number of issues that must be addressed within a SRS framework. In the following the working group has tried to develop its framework elucidating its view on a range of issues. In some cases it is confident enough to make recommendations, in others it believes further work is required.

The Charging Regime. A goal of the working group is to establish a registry which provides a flexible platform allowing registrars to offer a variety of services and does this at minimum cost. It is not clear to the working group why ISOCNZ policy should specify an annual billing cycle when it does not specify any other attribute of the billing process, e.g. bulk discounting, etc. Further Domainz has indicated that it is not worth sending an invoice for less than $30. This suggests that a billing focus on registrars as customers rather than on individual name holders may not only be neutral of the relationship between registrar and registrant but may generate significant savings.

Recommendation 2. 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.
• Include either a fixed or minimum monthly charge set at a level to discourage registrars managing less than 100 names.
• Be independent of any contract or agreement between registrar and registrant.

As an example, the registry might invoice on a monthly basis based on an accumulation of easily identified items such as storage, creation and deletion of records.

Governance. The following three recommendations deal with the development of new ISOCNZ policy to better govern the parties working within the .nz domain name space. The working group believes this policy is needed regardless of the structure of the registry.

A key issue is the argument that a model which enforces the presence of a registrar between the registry and the registrant introduces the possibility that a registrar may abuse their control over a registrant's domain name. For example, one registrar may refuse to transfer a name to a second registrar during a period of dispute with the registrant holding the name. The thick and thin registry models may be seen as structural and contractual solutions to this problem.

The working group believes that in the first instance such concerns should be addressed through a clear ISOCNZ policy stating the rights and responsibilities of all parties. We offer the following as a list of the rights and responsibilities of the key roles we have defined.

Recommendation 3. ISOCNZ establish policy setting standards for the proper governance of the relationship between registry, registrar and registrant.

The registry is a monopoly owned by a public, not-for-profit society. The working group believes the registry should observe the objects of the Society and the principles of RFC 1591 in its operation. In particular, the registry should be concerned with "responsibilities and service to the community." The working group knows of two efforts to develop a statement of best practice for ccTLD administration: the CENTR: Best Practice Guideline for ccTLD Managers and the Alternate ccTLD Best Practices Draft . (Both are available on the ICANN web site.)

Recommendation 4. ISOCNZ adopt, possibly with modification, one of the above statements of best practice; or, if necessary, draft their own statement of best practice. This statement should be instrumental in the governance of the registry and in the development of working relationships with registrars.

Recommendation 5. A standing committee be established to maintain communication between the registry and registrars. The standing committee should be chaired by a member of the ISOCNZ Council and should include technical representatives from the registry and a minimum of two different registrars. (This committee might replace the current ISOCNZ Technical Committee.)

Information in the Register. The question of what information related to a domain name, its registrant and registrar should be held in the register is the essential difference between the thick and thin registry models.

The thin registry model is epitomized by ICANN which absolutely minimizes the information to the extent that the registry must use the registrar to contact the registrant. By contrast the ccTLD registries that we have studied have included significant registrant information in the register, possibly including authentication information.

Submissions and discussions have also varied. The SRS model in the Abley/Mott paper submitted by Robert Gray is a thin model. The SRS model submitted by Ewen McNeill is a thicker model with more registrant contact information. Discussion at both forums and on the model-review mailing list has argued the advantages and disadvantages of these models.

The working group sees three alternatives.

The thin model. Information held in the registry is minimal. For example, Abley/Mott suggest the essential domain name and name server address information plus the name of both the registrant and registrar. The registrar takes responsibility for maintaining all contact information. There is no relationship between registry and registrant. Enforcement of ISOCNZ governance by contract would be required.

The thick model with authentication. The registry holds the same information as above plus contact information and an authentication key for the registrant. The authentication key is used to resolve disputes or may even be involved in approving significant changes such as change of registrar. The holding of contact information is duplicated an effort must be made to keep this consistent. The authentication key provides a structural solution to ensuring the registrant's control over their domain name(s).

The thick model without authentication. The registry holds the same information as above except for the authentication key. When a name is initially registered the registry issues the registrant with a certificate that can be used if a dispute should arise. The assumption in this model is that the key is needed sufficiently infrequently that a less expensive out of band solution is appropriate. The working group has not yet reached a conclusion on which of these models is preferred.

Recommendation 6. Additional discussion and study should be undertaken to better understand the advantages and disadvantages of a structural versus a contractual solution to the question of protecting the registrant's rights to their name. Within a structural solution it will be necessary to accurately assess the level of authentication that would be appropriate.

Accreditation of Registrars . Within its model ICANN has erected substantial barriers to becoming a Registrar. Domainz currently has minimal barriers to entry in its accreditation agreement. Which is appropriate for New Zealand? The working group identified three possible levels of specification for accrediting a Registrar.

• Any legal entity capable of signing a contract.
• A minimum level of "maturity" as might be represented by $500,000 in liability insurance, the absence of Directors with a criminal background and the annual presentation of a solvency certificate from an independent auditor.
• A high level of "maturity" along the lines of ICANN's requirements.

The Working Group strongly believes that the use of subjective judgment should be avoided. Given the size of the New Zealand market and a national culture that believes in letting anyone have a go we see no reason to place unnecessary barriers in front of potential Registrars. Our first draft strongly favoured a thick registry model and in that context recommended the minimal barriers listed above. If as a result of further consultation as recommended above a thin registry model that depended on contracts to function were selected it would be appropriate to review this.

Recommendation 7. The criteria for accreditation should be reviewed once the structure of the registry is determined.

Moderated Domains . Less than 1% of names within the .nz name space fall within one of the moderated domains. Consequently the Working Group does not believe that concern for the processing of names within the moderated second level domains should significantly impact the overall framework. Domainz has demonstrated that moderation can be efficiently automated by the registry simply sending an e-mail request to the moderator while holding the name.

Recommendation 8. Moderated domains should continue to be handled by the registry.

Further Work

The working group believes that further work needs to be done. Specifically it should resolve the question of the appropriate registry model (thick or thin). Once the overall direction is set it would then be wise to carry out further detailed study, for example a comprehensive risk analysis and a business plan for the change process.

Recommendation 9. The working group should continue to resolve the develop the relative advantages and disadvantages of the structural and contractual approaches to a registry model.

References

1. The Internet Society of New Zealand, Future Development of the .nz Domain Name Space, (link to document) , May 1997.
2. The Internet Society of New Zealand, DNS Administration within New Zealand, (link to document) , May 1997.
3. The Internet Society of New Zealand, DNS Operational Tendering Issue, (link to document) , August 1998.
4. The Internet Society of New Zealand, New Zealand Domain Name Structure, (link to document) , November 1998.
5. World Intellectual Property Organisation, The Final Report of the WIPO Internet Domain Name Process, http://ecommerce.wipo.int/domains/process/eng/processhome.html , April 1999.
6. O'Brien, Patrick, Governance in the .NZ DNS - A Position Paper, (link to document) , March 1999.

Appendix A: Input Received by the Working Group

Auckland Forum Attendees

Chris O'Donoghue
Peter Mott, 2Day.com
Ray Lewis
Bob Gray
Len Gray

Wellington Forum Attendees

Michael Stevens, CPS Systems
Jim Higgins, Networking Edge and Domainz
Ewen McNeill
David Zanetti
Sean Liddall; Victoria University Information Technology Services
Hamish MacEwen
David Harpham

Consultations

Patrick O'Brien, Jim Higgins, James Scott and David Bain, Domainz
Patrick O'Brien, Domainz and Andrew Mason, BSA re the Domainz Registration System
Craig Anderson and Jim Benson, IPROLINK
Karen Wynder, Xtra
Andy Linton, NetLink
Roger Hicks, Past Chair of ISOCNZ

Submissions

Jenny Shearer, Submission to the Review of the Registry/Registrar Structure for .nz
Robert Gray, Roles and Responsibilities in the DNS by Joe Abley and Peter Mott
Ewen McNeill, A Shared Registry for the .nz CCTLD
Jim Higgins, A Submission to the Registry/Registrar Model Review
Roger Hicks, Submission, Registry/Registrar Review
Lin Nah, Registry Review Submission
David Harpham, Shared Registry for *.nz
David Zanetti, SRS Working Group Submission
Andy Linton, Domainz Working Group
Frank March, A critique of the Review of The Registry/Registrar Framework for the .nz ccTLD
Craig Anderson, Comments on the 19 May draft of the Review of The Registry/Registrar Framework for the .nz ccTLD