Executive SummaryI. Introduction
On August 1, 2000, the Internet Corporation for Assigned Names and Numbers ("ICANN") issued a formal call for proposals from organizations seeking to operate Internet top level domains ("TLDs"). Through this proposal, Afilias, LLC ("Afilias") proposes to be accredited by ICANN as the registry operator for one of the following unrestricted TLD strings, listed in order of preference - .web, .info, or .site.
Afilias strongly believes that ICANN should accept its proposal based upon its (i) members' unmatched experience in the domain name registration industry; (ii) commitment to preserving the stability of the Internet; (iii) ability to present clear alternatives and innovation to the Internet community; and (iv) commitment to devote the financial resources necessary to establish a viable TLD registry. In addition, Afilias believes that its registry will demonstrate a proof of concept for the introduction of future TLD registries.II. Unmatched Experience
Formed and owned by a consortium of nineteen leading ICANN-accredited Internet domain name registrars, Afilias is uniquely positioned to build on the core capabilities, technical expertise, operating experience, and extensive market penetration of its members.
In the aggregate, Afilias' members registered over 10 million domain names in their last fiscal year. In addition to their strong position in the domain name registration market for the .com, .net, and .org top level domains, the members collectively offer a wide range of related Internet services, including country-code domain name registrations, country-code registry operations, Web hosting, and ISP services. As a group, the members provide their services on a truly global basis, with 65% having offices in North America, 53% in Europe, 26% in Asia and the Pacific Rim, 5% in Australia and 5% in the Middle East.
Members have been participating in the Domain Name System ("DNS") since its inception, and were instrumental to the development of DNS protocols. Additionally, all members are ICANN-accredited registrars, and are active participants in, and very familiar with, the ICANN process and policies.III. Preserving the Stability of the Internet
Afilias recognizes that the primary objective of any TLD registry must be to protect the operational stability of the Internet. Through this proposal, Afilias believes that it can responsibly expand the name space while simultaneously preserving the Internet's stability.
A. Functionality and Performance Exceeding Industry Standards
Afilias is unparalleled in its ability to draw upon the extensive firsthand experience that its member registrars have with the existing TLD registry system when planning for its new registry's functionality and performance. Afilias' members have been operating in, and thus are intimately familiar with the strengths and weaknesses of, the existing system. As such, Afilias' approach to achieving its technical solution was to examine the existing registry system and determine ways to enhance its functionality, addressing in particular those issues that have plagued the Internet community in recent years.
Building an entirely new registry system will permit Afilias to employ next-generation solutions to address limitations in the current registry system. Afilias' system will provide innovative technological solutions, including a centralized, registry-level Whois service that will allow registrants to search a single database rather than querying every registrar's Whois database. It will also allow for near-real-time updates of critical elements such as the Whois database and the generation of zone files.
Afilias plans to significantly improve the quality of service of the registry by enforcing more stringent Service Level Agreements, in order to provide for a 99.9% level of service availability. Finally, Afilias will provide a turn-key system for registrars that will ensure that its company policies are implemented, while enabling optimal integration between registrars and the registry, a faster time-to-market and lower barrier to entry for new registrars.
B. Experienced Technology Partner
Afilias considered a number of third parties to fulfill the important role of its technology partner. After analyzing the proposals submitted to it, Afilias entered into an agreement with Tucows, Inc. ("Tucows"). Tucows intends to form a joint venture with Q9, Inc. and other minority partners for the purpose of developing the Afilias registry system and separating Tucows' registrar and registry operations. Afilias is confident that the Tucows solution is extremely robust and exceeds the technical requirements necessary to build a next generation registry. Additionally, the Afilias and Tucows development teams are extremely well-suited to collaborate on this unique opportunity, given that both are experienced in the registry space.IV. Delivering Clear Alternatives and Innovation to the Internet Community
The introduction of a new unrestricted TLD creates significant opportunities for the Internet community. Afilias is committed to ensuring that such opportunities are made available to as much of the community as possible.
A. Value to the General Community
One of the most important sources of value to the community that will result from the introduction of new unrestricted TLDs is the creation of competition in the market for unrestricted top-level domain name registry services. Afilias has the resources, the commitment, and the incentive to compete against the market leader by offering lower prices, enhanced performance, and greater legitimacy in policy-making and implementation.
The introduction of a new unrestricted TLD will also benefit the general Internet community by creating a new pool of domain names for registration and by expanding the global nature of the currently US-dominated unrestricted TLD name space.
B. Value to the Intellectual Property Community
Afilias recognizes that new unrestricted TLDs could create opportunities for abuses of the domain name system unless introduced in a timed and responsible manner. Accordingly, Afilias will implement a number of policies to address and minimize risks to intellectual property owners. The principal policy aimed at protecting intellectual property will be to offer qualified trademark owners a "sunrise period" to register their trademarks and service marks as domain name registrations within the unrestricted TLD. Afilias also intends to require registrars to adopt the UDRP and adhere to all anti-cybersquatting and abusive registration laws as part of their agreement with Afilias.
To assist intellectual property owners in policing their marks after the Sunrise Period, Afilias will offer a centralized registry-level Whois service that contains near-real-time registration information on all registrations in the new unrestricted TLD. Afilias will permit third parties to subscribe to this service on a bulk-access basis.
C. Value to the Registrar Community
Afilias was formed with the intention of achieving the fullest participation possible from the entire community of ICANN-accredited registrars. To perpetuate this principle of open membership, approximately seven months after the date the registry begins general registration of domain names, and on every anniversary thereafter, all ICANN-accredited registrars that are active and operational at that time will be invited to purchase an equity stake in Afilias and thereby share in its ownership and management. This program will permit such registrars to purchase Class B interests at a fair market value to be determined by an independent appraiser.
Afilias' operating agreement and business plan also provide an opportunity for all ICANN-accredited registrars to receive a share of the profits of Afilias. At the end of each fiscal period, an amount equal to 25% of Afilias' cash on hand (less amounts allocated for operational expenses) will be paid to all ICANN-accredited registrars in proportion to the number of domain names they registered in the new unrestricted TLD during such period.V. Commitment of Resources
Afilias' large base of founding members enabled the company to retain top professional service organizations such as Skadden, Arps, Slate, Meagher & Flom, LLP, KPMG, OgilvyOne Worldwide and Hill and Knowlton to assist in its formation and in the preparation of this proposal.
Afilias' members have also entered into an operating agreement to ensure that the company will have sufficient resources to implement the proposal and address any further concerns of ICANN on an ongoing basis. Afilias' operating agreement provides that upon ICANN's acceptance of Afilias' bid to operate the registry, the Board of Managers (the "Board") will issue a capital call to the members for approximately US$3.8 million, and that thereafter the Board may make additional capital calls as necessary.
Although the demand for domain name registrations continues to grow, Afilias recognizes that an aggressive and effective marketing strategy will be necessary for any new unrestricted TLD registry to become a serious competitive challenger to the current unrestricted TLD and ccTLD registries. Accordingly, between the launch date and June 2002, Afilias plans to implement an extensive marketing campaign, allocating its own resources for this purpose and leveraging the direct marketing capabilities of its registrar members.VI. Conclusion
Afilias shares ICANN's recognition that a carefully managed introduction of one or more additional unrestricted TLDs to the DNS will deliver considerable benefits to the entire Internet community. Given Afilias' commitment to ensure the preservation of the Internet's stability and robustness, ICANN can be fully confident that its highest aspirations for this DNS expansion and proof of concept will be met. Afilias believes that its proposal fully meets each of the concerns expressed in ICANN's application documents with firm and well-founded plans, and welcomes further discussions as to how Afilias can best meet ICANN's objectives.