In the medium term Organic Names will establish itself as an independent stand-alone registry operator.
Due to the requirement for stability of the .org namespace, and the short period between the proposed contract signature date and the hand-over date, Organic Names intends to outsource all operational and development aspects of the registry function in the short term.
Operational aspects of the registry function will be outsourced to CentralNic Limited (CentralNic). The initial contract between CentralNic and Organic Names will have a duration of one year, effective immediately from the time ICANN declares its intention to award the operation of the .org TLD to Organic Names. In addition, CentralNic will, for this period, provide Organic Names with management expertise and other staff. CentralNic will also develop and maintain registry systems required by Organic Names.
The one year outsourcing contract will, from the outset, provide Organic Names with the necessary expertise to ensure the stable and consistent management of the .org TLD registry in the transition period from VeriSign.
|C13||CentralNic will initially be providing all the services and facilities used to perform the registry function to Organic Names.|
|C13.1||Full legal name:||Centralnic Limited|
163 New King's Road
|Telephone:||+44 (0) 20 7751 9000|
|Fax:||+44 (0) 20 7751 0958|
General description of CentralNic's business and other activities:
CentralNic is a leading, independent global domain name registry which is committed to making it easier for Internet users to establish new and distinctive domain names with regional and country-specific identities.
Headquartered in London, CentralNic currently has a portfolio of more than 17 domain names available to users world-wide, including eu.com (Europe), uk.com (United Kingdom), us.com (United States), cn.com (China) and ru.com (Russia). The total registry size exceeds 1.5 million names.
CentralNic's operations, together with its predecessor company, NomiNation, date back to 1996. CentralNic has a full-time staff of twenty-seven based at CentralNic's headquarters in London, United Kingdom, a North American Sales and Marketing Manager based in the US, and a European Business Developer based in Germany. CentralNic is a privately held limited company, 70% owned by its founders who are all actively involved in the management of CentralNic - with the remaining 30% held by passive investors. Steve Dyer is regarded under English Law as being a controlling party with respect to CentralNic.
To serve its customers without interruption, CentralNic operates an expanding global network of Domain Name Servers running on the latest versions of Solaris and Linux to ensure maximum reliability and performance. The servers are co-ordinated and controlled from the company's network operations centre in London.
CentralNic offers an efficient and speedy registration service in a number of countries around the world and further countries are being added to its portfolio. Its world-wide network of over 1,000 resellers provides efficient local access for registration and assistance for registrants.
|C13.3||CentralNic is a private limited company incorporated in England under the Companies Act 1985. The company is a for-profit entity.|
|C13.4||CentralNic has no Dun & Bradstreet D-U-N-S Number.|
|C13.5||CentralNic's current number of employees is 27.|
|C13.6||CentralNic's total revenue in the last-ended fiscal year was $2,274,432 US - £1,601,713 pounds sterling, converted at £1 = $1.42.|
Scope and terms of contract between Organic Names and CentralNic.
CentralNic and Organic Names have entered into a Memorandum of Understanding, whereby, contingent on the award of the contract to operate .org to Organic Names, CentralNic shall supply to Organic Names staff to deploy, develop and operate .org, for a minimum period of a year after the redelegation. CentralNic will charge Organic Names at on a cost plus 10% basis. CentralNic shall grant to Organic Names a worldwide perpetual non-exclusive royalty free license to all developed intellectual property.
Full text of the memorandum is referenced under Exhibit 6. Organic Names expects a definitive agreement to be executed prior to, or contemporaneously with, execution of the .org contract with ICANN.
Description of the abilities of Organic Names and CentralNic to operate a TLD registry of significant scale in a manner that provides affordable services with a high degree of service responsiveness and reliability.
This section has been divided into:
Organic Names is a newly formed company, and thus has not itself had experience in the operation of a registry. However, Organic Names brings to bear the expertise of the senior management of Nominet UK, and the technical abilities of CentralNic, as well as significant funding. In addition, Organic Names board of directors brings substantial commercial experience, both from the domain name industry and from the business, legal and political world.
The founding directors of Organic Names, Alex Bligh and Steve Dyer, are both board directors of Nominet UK, and both members of its Policy Advisory Board. Nominet UK operates the registry for the .uk country code domain, and hence is one of world's oldest, largest, and most stable registries with over 3.5 million domains registered to date. Alex was a founding director of Nominet UK in 1996, and, amongst other contributions, developed the financial principles (the Bligh principles) that have guided Nominet UK, and subsequently many other not-for-profit ccTLD registries.
Whilst Nominet UK is prevented by its articles of association from applying for TLDs such as .org, the applicant feels that the extensive experience its directors and advisors have gained from their involvement with Nominet UK is highly relevant to this application and more than fulfils ICANNs requirement that applicants for .org have practical experience of running registries of equal size to .org. There are very few registries in the world which achieve this requirement.
Organic Names' bid partner and sister company, CentralNic, is a well established and respected United Kingdom-based registry operator. CentralNic currently operates a registry for many names including eu.com (Europe), uk.com (UK), gb.com (Great Britain), us.com, (United States), cn.com (China) and ru.com (Russia), totalling over one and a half million registrations, through over 1000 resellers, which, in CentralNic's model, take the role of registrars. CentralNic was vetted and accepted by ICANN as a suitable potential registry operator for the proposed .tel gTLD, though this gTLD was not ultimately issued in the last round of gTLD applications.
Organic Names intends to outsource several functions to CentralNic, especially in the early stages of operation, as described above under C12. This outsourcing however will be the building of Organic Names' own registry infrastructure.
ICANN's application procedure appears to exclude the possibility of joint applications - had this not been the case, this application would have been made in joint names. Should it be of concern to ICANN, Organic Names and CentralNic will be happy to discuss with ICANN CentralNic's underwriting of certain obligations Organic Names will have under the proposed contract.
CentralNic is one of the leading registries in the provision of user-friendly web based clients for registrars, and this interface is particularly suited to the multi-lingual environment in which .org will operate.
The registry function has a high degree of automation and integration that enables the registry to run on an unusually low staff level and for those staff to concentrate on customer satisfaction rather than routine administration.
It is worth noting that CentralNic started operations as NomiNation Ltd in April 1996 and Nominet UK started shortly thereafter. Both companies have developed through the explosive growth of the Internet and the .com boom when registrations increased by a factor of 10 almost overnight.
Organic Names recognises that the terms of the ICANN contract require it to provide a smooth registry transition from the initial VeriSign system. However, Organic Names aims to bring enhanced facilities to the existing registrars as soon as they are able to take on those new features. Organic Names will provide that the basic functionality of the VeriSign RRP system will be in place until the time when the new EPP proposal becomes a recommended standard, whereupon Organic Names will support both protocols during the transition period.
A non-exhaustive list of differentiators that Organic Names will offer is:
ii. Organic Names philosophy
The award of the .org registry contract is intended to enhance competition in the registration services marketplace, both at the registry and registrar level, which is currently dominated by a single for-profit player VeriSign.
It is Organic Names' contention that market efficiency is achieved by free competition of conventional for-profit firms.
The shareholders of respective for-profit registries seeking to maximise their market share and returns are far better placed to drive down their costs and their prices in a competitive market environment than true non-profit organisations (whose goal is presumably to maximise a potentially immeasurable public service duty), or apparently non-profit organisations which are in reality shams created to feed business to their for-profit associates and co-bidders.
Whilst the registry market has a large incumbent monopoly player (VeriSign), the appropriate ways to protect the market from monopolistic distortion are through national and international competition law, and through appropriate contracts between ICANN and VeriSign. Organic Names believes ICANN would be in error in imposing restrictions on the structure of VeriSign's registry competitors which, whilst they may appear superficially to be in the interest of the greater community, will in fact only serve to provide weaker competitors.
It is ICANN's position that healthy competition exists at the registrar level. Whilst this is in general true, Organic Names notes specific weaknesses in development of the registrar market for market segments that service charities and similar organisations, particularly those located in developing countries. For this reason Organic Names believes that the .org registry operator should pay particular attention to ensure such market participants are not excluded from the market by high barriers to entry.
Organic Names thus envisages a more open accreditation programme and the provision of funding to develop open source registrar software that is freely available.
However, Organic Names strongly supports maintaining the policies and structure developed by ICANN in consultation with the consensus of the community.
Organic Names recognises that the Internet is an evolving medium, and over time such policy may need to change.
Further, whilst policy has thus far been the same for all VeriSign operated TLDs the separation of the .org registry gives the community an opportunity (but not an obligation) to hone policy for this TLD for its unique constituency. Organic Names intends to maintain a conservative, transparent and consultative approach when responding to both these drivers of change, and will involve both ICANN and its Policy Advisory Board, as well as public consultation where appropriate in the development of its policy.
Organic Names has been contacted by the .org taskforce of the DNSO, and would welcome representation from this body onto Organic Names advisory board.
Whilst the ICANN accredited registrar system has been, in general terms, a success, there is a perception that it may have acted to exclude small community registrars in developing countries. Organic Names will, subject to ICANNs agreement, investigate opening up a mechanism for such registrars to use Organic Names registry services.
iii. Company structure
The structures of Organic Names governance bodies are designed to strengthen the application of philosophies as well as good business practice.
Board of Directors
Organic Names is overseen by a board consisting of both business and socio-political thinkers, and those experienced in running a 3 million+ registry and businesses of this scale. It brings the following skill-sets to bear:
This is a working Board to which the CEO will report. In line with normal UK practice the CEO will be a board member.
The board consists of:
Alex Bligh, Steve Dyer, and Cathy Horton are currently board members. Laurence Blackall, Richard Almeida, and Rob Blokzijl have each agreed to join the board, subject to ICANN entering into negotiations with Organic Names for the transfer of .org, and have each indicated their full support for this proposal.
Alex holds the post of Chief Technology Officer at XO Communications Europe, having previously served as Vice President of Core Network at Concentric Network Corporation Inc, and, before that, as Chief Technical Officer of Internet Technology Group PLC (ITG). He was Managing Director and founder of Xara Networks Limited prior to its acquisition by ITG in April 1997. In each of these posts Alex played a vital role both in building the business, and in the subsequent successful sales of the business.
Alex is a founding non-executive director of Nominet UK, a non-profit registry administering the .uk country-code top level domain. Alex played a large part in forming the original company, in the financial modelling mechanisms and the determination of charges, and in the legal structure and contracts. Nominet UK has since become an internationally respected model for other country-code domain registrars. Alex also sits on Nominet UKs Policy Advisory Board.
Alex is a non-executive director of Redbus Interhouse PLC, an Internet colocation company publicly quoted on the LSE, where he chairs the remuneration committee. Alex is a founding non-executive director of XchangePoint Ltd, a provider of next generation interconnect services. He has also served on several other industry bodies, including the board of directors of the London Internet Exchange for 4 years, and sitting on the board of advisers of Remarq Communities Inc prior to its acquisition by Critical Path Inc., and taking a technical advisory role to i-Spire PLC, an Internet and e-commerce investment company quoted on the LSE. Alex provides technical and strategy advice to a number of other companies on a consultancy basis, as well as having several other business interests.
Alex holds a BA in Mathematics and Management Studies from Queens College, Cambridge.
Stephen Dyer is chairman and co-founder of CentralNic, a successor organisation to NomiNation, which Steve founded five years earlier, in 1996. Steve is currently chairman of two other successful companies. In the early 1980s, he co-founded Mailbox Partnership, a fulfilment house providing creative, back office and other services to public relations companies, and in 1993 he formed Mailbox Internet Ltd., one of the first and most profitable business-to-business Internet Service Providers in the UK.
Prior to these positions, Steve served as Manager of Organisation and Methods for Rediffusion Group, a 108-company multinational conglomerate comprised of electronic media, financial services, computer manufacturing, flight simulation and other groups. As manager of O&M, Steve ran Rediffusion's internal consulting organisation, with responsibilities that included integrating customer support and other customer needs with the company's computer systems across all groups.
As a pioneer in the Internet industry, Steve is a well-known figure and participant at meetings of ICANN, RIPE and other industry groups. Steve also volunteers on working groups for the Council of European Top Level Domain Name Registries, the Policy Advisory Board of Nominet UK. Steve is also a Director of Nominet UK. He has recently been elected to the Council of the ISPA The UK's industry representative body for ISPs.
Steve began his career as a consultant at Arthur Andersen, after studying computer science, psychology and chemistry at Keele University.
Cathy Horton is co-founder and Chairman of coolcrypt, a stand-alone bespoke innovation consultancy practice that, since its launch in April 2001, has touched more than 30 corporations and governments with its work in the .corp and .gov reconfiguration arenas.
Before co-founding coolcrypt, Cathy developed a world-class reputation as a mergers and acquisitions lawyer over 15 years, specialising in cross-border transactions particularly in the technology sector. She is an equity partner of Squire, Sanders & Dempsey, and still heads up the vision behind the firm's highly successful technology and e-Business practice. Cathy is also renowned for her legal representation of global technology companies in connection with complex e-Business transactions and systems integration.
Well known in business, City and Government circles, Cathy has acted as the trusted advisor to Governments seeking to transform themselves and their nations for success in the new economy, and has spoken widely on innovation to corporate and government audiences in the US and Europe. Cathy also has strong links with The Prince's Trust and other ethical groups - driving coolcrypt's CSR. Her active support for the disenfranchised (both individuals and countries) is evident through her work with clients regulated by domain name bodies such as ICANN. She is a firm believer that domain name strategies can help economic development and leverage profits into government, business and charitable areas.
Laurence Blackall is a serial entrepreneur and experienced investor in a number of start-up ventures.
Laurence started his career working for the Virgin Group, and then joined the SEMA Group in 1975. Subsequently he became a director of Frost & Sullivan and from there moved to McGraw-Hill where he was a Vice-President.
Laurence founded Global Internet in 1995, and took it public as Internet Technology Group in 1996. In January 2000, he sold the business to Concentric Network Corporation and stayed on as CEO. He left the company in May 2001, but reacquired the European business in February 2002. Current directorships include Transigent Ltd, Xchangepoint Holdings, MadforSport Ltd, GlobalWave Ltd. Laurence is a former Chairman of the Internet Service Providers Association.
Richard Almeida is a serial entrepreneur, having founded various companies, managed, grown and raised finance for them. He is an Internet expert and has founded, directed and advised various UK Internet industry bodies including The London Internet Exchange and Nominet UK.
Richard is a founder and director of Nexus Equity Ltd, an investment fund whose aim is to identify companies with new enabling technologies that provide a significant improvement to processes within areas where the Nexus team has highly relevant experience. He is non-executive chairman of Omni Consulting Company Ltd., a billing software company, and a strategy adviser to MessageLabs Ltd, a company whose systems filter out viruses, junk-email, and pornography from email systems. He is a non-executive director of XchangePoint Ltd, an Internet interconnect and peering company, and sits on the Nominet UK Policy Advisory Board which he chaired for 4 years; Richard was also a founding director of Nominet UK.
Richard co-founded Internet Network Services, a UK Internet service provider which was purchased by Cable & Wireless in 1999. Richard subsequently had responsibility for Cable & Wireless European network design and integration processes. Richard was also a founding director of LINX - the not-for-profit London based Internet exchange. Richard has acted as a consultant for several companies, including, the London International Financial Futures Exchange (LIFFE), ICL, GEC Plessey, 3Com, Retix, and Oracle Corporation Ltd.
Richard holds an honours degree in Computer Systems Engineering, from the University of Kent at Canterbury.
Rob Blokzijl is a founding member and chairman of RIPE, the European open forum for IP networking. Since its foundation in 1989, he has been chairman of this organisation, and was instrumental in the creation of RIPE NCC in 1992 as the first Regional Internet Registry in the world.
Rob also sits on the board of ICANN, having been selected by the Address Supporting Organisation. Prior to this, he has been active in building networks for the particle physics community in Europe.
Rob is a member of the board of directors of Nominet UK.
Rob graduated from the University of Amsterdam (1970) and holds a doctorate in experimental physics from the same university (1977). He is currently employed by the National Institute of Nuclear Physics and High Energy Physics (NIKHEF).
Officers and Senior Management
Upon approval from ICANN to operate .org, Organic Names will recruit to fill the unfilled positions of its senior management team. Key positions in that team are as follows:
Chief Executive Officer
Responsible for leading and co-ordinating the executive team; developing and executing strategy; external policy and relations (including ICANN).
Chief Operating Officer
Responsible for the day to day running of Organic Names, including ensuring availability of services to meet proposed service levels. Has specific responsibility for ensuring the smooth transition of .org to Organic Names.
Chief Financial Officer
Responsible for managing all financial aspects of Organic Names business, including business planning, budgeting, internal controls, credit control, billing, collection, revenue recognition, and bought ledger.
Chief Technology Officer
Responsible for setting, developing and implementing Organic Names technical strategy, with special reference to external protocol and technology developments. Interface to bodies such as IETF.
Vice President of Policy
Responsible for ensuring Organic Names compliance with adopted policies and for the operation and administration of the advisory board and further development of policy.
Vice President of Sales and Marketing
Responsible for defining, differentiating, marketing, and developing the Organic Names and .org brands, and promulgating the expansion of the business.
Vice President of Customer Relations
Responsible for the interface with Registrars, comprising their induction as customers of Organic Names, and their subsequent support.
The company also maintains an advisory board containing some existing major users of .org and global NGOs, representatives of Internet organisations and technical experts which can develop the philosophies Organic Names espouses. The advisory boards members serve both as Technical Co-ordination Committee, and as a Policy Advisory Committee.
As a Technical Co-ordination Committee, it has two main functions. One is to keep the company abreast of technical developments and directions on the Internet and to provide a level of technical oversight that could not be provided by a normal board. The other function of the TCC will be to reverse the information flow to provide development, software and other resources to assist the progress of the Internet, especially in developing countries. The members of this committee are drawn from, and will be further widened to bodies such as the IETF, ccTLD registries, the registry's technical department and other working groups.
The advisory board will initially consist of:
As a Policy Advisory Committee, it will act as a conduit for ideas relating to direction of policy for the registry. This relates to Organic Names intention to build the brand of .org in the direction of organisations with a human face.
Organic Names believes that enterprises with ethical and sociological aspirations can be well accommodated in the .org namespace. To start this board initially Organic Names is actively seeking the support and membership of bodies such as Amnesty International, WIPO, the International Red Cross and other NGOs as well as ICANN itself. In no way will such bodies democratically represent a global community, but the presence of their representatives on Organic Names policy board will make a strong statement of the position and aspirations of its endeavour.
The application of such policies will be with a light touch and a fundamental precept of policy will be the guaranteed tenure of the current users of .org and operational stability of the .org gTLD.
More detailed information on the initial members of this board follows:
Dr Willie Black
Dr Willie Black is executive chairman of Nominet UK, and chairman of CENTR.
Willie has been closely involved with the Internet and the Domain Name System since its earliest days in the 1970s. As a member of the Department of Nuclear Physics at Oxford University, he helped to develop the early use of e-mail, via which academic and research establishments were starting to communicate with each other.
In the early 1990s, Willie ran the Joint Academic Network (JANET) in the UK, as programme director of the United Kingdom Education and Research Networking Association. He was a member of the voluntary Naming Committee that vetted domain names prior to the formation of Nominet UK.
Willie left UKERNA to set up Nominet UK in 1996. His role as Executive Chairman focuses on strategy, high-level policy issues and relationships at an international and national level.
Professor Paul Van Binst
Paul Van Binst is Full Professor at the Faculty of Sciences of the University of Brussels (ULB); he is the Director of Service Télématique et Communication (STC) grouping about fifteen researchers specialising in information and communication technologies (computer networks, telecommunication infrastructures, protocols, standards, telematic applications and services, multimedia, broadband networks, etc.). STC has many R&D contracts, as well as training and consultancy activities, with the largest public and private organizations.
Paul also lectures in the Faculty of Sciences and in the Faculty of Social Sciences, Politics and Economy. He created a postgraduate programme in Telematics and Organization.
Outside the academic world, he gives a large number of lectures, seminars and conferences, and has many national and international activities, in particular in relation with the European Commission. He has been the chairman of the Steering Committee of EWOS (European Workshop for Open Systems). He is presently president of the Belgian Teleworking Association and vice-president of the Brussels Teleport, and a member of the board of many scientific and professional associations.
Xavier Buck is General Manager of Datacenter Luxembourg S.A, a Luxembourg based company. Datacenter covers services in the area of the information technology industry and more specifically Internet services, e-business developments and network security solutions. Xavier joined Datercenter in 2000.
From 1997 to 2000 Xavier was Sales Manager and Internet Consultant with Netline S.A. in Luxembourg. Netline is an Internet Service Provider focusing on secure Internet access solutions for Luxembourg based companies.
Xavier is a computer sciences graduate of the Université Libre de Bruxelles, Brussels and holds a diploma in business management, from the Ecole de Commerce et de Gestion, Luxembourg.
At Ascio Technologies, Tina Dam has executive responsibility for developing and maintaining all relationships with registry and other suppliers.
Prior to her current position at Ascio, Tina oversaw the launches of the .biz, .info and .name top level domains, and managed the development of all internal and external products and product marketing materials. Prior to Ascio, Tina was the Systems Architecture Engineer at Navision Software a/s, a company traded on the Copenhagen Stock Exchange, establishing the architecture design of the company's next generation of products.
Tina holds a Master of Science in Mathematics and Physics from the Aalborg University in Denmark and a BBA in Marketing Management and International Trade from Copenhagen Business School.
Markus Eggensperger is a founding director of United-Domains AG located in Starnberg near Munich, Germany. The company specialises in domain-added-value-services including the leading weekly domain law newsletter in Germany, Austria and Switzerland. United-Domains focuses on advising on and developing individual solutions for law firms (currently over 200) and major companies (especially within the chemical and pharmaceuticals industry as well as TV stations and newspaper publishers) within the fields of intellectual property law, trademarks and domain name registration and domain name management.
Markus is the chief legal officer of the company and is additionally responsible for external relations, investor relations and the strategic and international business development of the company. A Bayreuth award-winning graduate in law, Markus specialises in the fields of company law and intellectual property law. He is a member and/ or respectively a participant of the ICANN At Large Study, the EC-Panel of Participants and has been an observer of ICANN and RIPE for many years.
Keith Mitchell was first involved with what is now known as the Internet 17 years ago, as a postgraduate at University College London. Between 1986 and 1991, while working for Edinburgh-based Spider Systems, Keith was a representative on the board of the UK Internet Consortium.
In early 1992, he became one of the founders of the UK's first commercial Internet provider, PIPEX.
From May 1996 until September 2000, Keith served in the full-time role of Executive Chairman of (LINX), the London Internet Exchange. He is also a non-executive Director of Nominet UK, and has served as Chairman of the RIPE NCC Executive Board (1997-99).
In September 2000, Keith became a founder investor in XchangePoint, a pan-European commercial provider of Internet interconnect and peering services, of which he is Chief Technical Officer.
Vaggelis Segredakis is the administrator for the Greek Internet Country Code Top Level Domain Registry, for the Foundation for Research and Technology Hellas (FORTH). Vaggelis is a Physics graduate of the University of Crete, Greece.
Jean-Christophe Vignes is a consultant with Internet Governance Consultants and a Computer Law graduate of the Universities of Paris II, Toulouse in France and McGill University in Montreal, Canada. Until July 2000, after leaving the University of Paris II, Jean-Christophe had been with two French Internet start-up companies, MISTERDROIT and MAXIMILES. Misterdroit were winners of the Jacques Douce competition in 1999.
Before joining iGCL, Jean-Christophe was Legal Counsel at the Association Francaise du Nommage Internet en Cooperation (AFNIC), the .fr Internet Top Level Domain Registry.
The first task of these initial members of the advisory board, will be, with the assistance of the board of directors, to widen its membership in order to better perform its functions and better represent the users of .org. Organic Names sees it will draw from two pools:
iv. Fundamental principles of Organic Names business model
Organic Names has retained Squire, Sanders & Dempsey as outside legal council.
Organic Names has retained HSBC and Coutts & Co as bankers and advisors.
v. Business Plan
Organic Names will finance its operations through equity finance, and, if necessary, through debt finance. Organic Names has committed funding of 10 million US dollars contingent on award of the contract to run .org to Organic Names. The financial projections contained within this section assume no additional funding. However, Organic Names will, if necessary, secure a facility from a commercial lending bank or other institution on approval from ICANN to operate the registry.
No sale or public offering of Organic Names is anticipated at this time.
Organic Names has produced demand forecasts for .org which characterise the size of the register. These are heavily influenced both by the size of the register on transfer to Organic names, and by the subsequent rate of growth. These have been produced at 10%, 50%, and 90% confidence levels.
Organic Names will inherit from VeriSign a register with a number of existing registrants present. However, there appears to be conflicting information about the size of this register, and its rate of growth, a fact which increases the difficulty of accurate business planning. For instance, ICANN's proposed budget of 15th May 2002 claims that the .org registry had 2,700,000 entries on January 1 2001, growing to 3,059,000 on March 1 2002, implying significant growth. VeriSigns own figures imply approximately 2,700,000 domain names at this latter date, implying flat registrations. Reports such as State of The Domain (http://www.sotd.info) indicate shrinkage, putting the same March figure at 2,401,094 domains. Whilst there are undoubtedly differences in methodology and definitions in data capture methods, it is clear that there is no consensus about the current size of .org, and thus, for understandable reasons, ICANN itself has been reluctant to give an opinion on this matter during the questions phase of the application process.
Further, the size of the register at the point of transition is also unknown. Whilst it might be possible to extrapolate this information from existing growth rates, these themselves are uncertain (see above), and this would assume that the actions of VeriSign as registry, and registrars, are not influenced by the handover process.
Therefore, without wishing to cast doubt on the accuracy of ICANN's figures, for the purposes of business planning, Organic Names has adopted a conservative approach to the initial size of the register, taking the value at 2.4 million in the 50% confidence level statistics; 2.0 million and 2.8 million have been used at the 90% and 10% confidence levels respectively.
As far as growth is concerned, whilst Organic Names plans to re-launch .org via a marketing campaign, it recognizes that the impact of such a campaign may be slow to take effect. Whilst it would be possible to market .org at the same potential audience as .com, and no doubt some registrars will do exactly this, it is likely that such marketing will still, in the eyes of the majority of such an audience, leave .org as a third choice beyond .com and .net. The non-profit, charitable, and quasi-governmental sectors, at whom .org might be more specifically targeted, are perhaps less likely to respond to advertising hype, but as a brand is built .org will, in Organic Names' judgement, be less subject to churn. Therefore, whilst continuing marketing programs will be successful, it is predicted that their results will be slow but steady.
Organic Names is also aware that some of its competitors have been rather over-exuberant in their growth predictions in the past. Whilst Organic Names would be pleased by success beyond its wildest expectations, it is felt prudent to demonstrate that the business would be stable even on meagre growth in demand. This is true not only in respect of the responsibilities of the directors of the applicant, but also in respect of ICANN's obligation to demonstrate that it is entrusting the .org domain to a responsible and stable organisation.
Therefore, for modelling purposes, Organic Names has adopted a conservative approach to net growth (i.e. new registrations less churn). At the 50% confidence level, a net monthly growth rate of 0% is assumed, rising over 12 months to a net monthly growth rate of 1%. At a 90% confidence level, a growth rate growing over the same period from -2.0% to -1.0% is assumed, and at a 10% confidence level, a growth rate growing from 1% to 1.5%.
The size of the register in each of these cases is illustrated in Exhibit 7.
Please note, there is a deliberate variance in register size and growth assumptions between Organic Names' business plan and its technical plan. Whilst the full costs of the technical plan are included within the business plan, the technical plan assumes growth rates of about 25% per annum in line, which is above the highest level predicted under the business plan, which takes a conservative approach to revenues and prudent approach to operating costs.
Charges & Revenues
Organic Names plans initially to set its charges to be in line with those of VeriSign at the time of this application, and as detailed under Appendix G of the current .org registry agreement. Other changes are specified below.
In order to facilitate the growth of small registrars based outside the US, Organic Names also proposes to offer registrars, in its agreement with them, the option to receive a bill in a currency other than US dollars. The initial options will be pounds sterling and euros. Organic Names intends to publicise prices in its non-dollar currencies, but review them on a regular basis to take account of movements in exchange rate, and ensure that they are neither no more than 5% above, or below the equivalent dollar rate, using an appropriately determined exchange rate.
When a domain name is transferred between registrars, Organic Names will charge the receiving registrar the amount that, and in the currency that the receiving registrar would have paid, had the name been registered anew at the time of receipt by the receiving registrar.
Organic Names is a company dedicated solely to operation as a registry, and has no revenues anticipated beyond that described above.
A breakdown of operational costs, at each confidence level, is illustrated in Exhibit 7.
Operational costs break down into the following categories - their definitions are mainly self explanatory.
Staff: Salaries; Travel and subsistence; Recruitment; Healthcare; Training; Other
Operations: Sub-contracts (technical) excluding CentralNic; Sub-contracts (operational) excluding CentralNic; Connectivity & hosting charges; IT expense; Operational information systems; Telephone; Postage; Printing; Credit references; Books and office consumables
ICANN: Fixed charge; Variable charge
Premises: Rent; Insurance; Rates; Heating & lighting; Repairs & maintenance; Cleaning; Security; Removals; Service Charge
Marketing & Comms:Co-marketing programmes; Registrar relations; Press and PR; Community relations; Publications; Web site; Corporate hospitality; Government relations
Professional Indemnity Insurance
Legal & Professional: Debt collection; Dispute resolution; Litigation; Corporate advice; Other
Board and Strategy
Financial: Money transmission; Customer fees; Banking fees; Audit; Other professional fees
Capital expenditure is divided into the following categories:
Miscellaneous staff capex
Miscellaneous non-staff capex
Risks & Opportunities
As noted above, it is difficult to accurately forecast demand, especially without consistent data on the current size and growth rate of the .org registry.
The demand forecasts presented may be too low, which represents an opportunity. This could be caused by the success of Organic Names marketing beyond the level predicted, by a higher initial registry size, or by a resurgence in the Internet market in general, or the resurgence of the domain name market, or Organic Names target market in particular. In this instance, Organic Names will need to grow faster than illustrated in the business plan. In mitigation, the resources of CentralNic can be used as an expansion vessel. Each of Organic Names executive board and managers is used to a growth environment, and Organic Names firmly believes this challenge can be addressed successfully.
Conversely, the demand forecasts presented may be high, which represents a risk. This would most likely be caused by a lower initial registry size, or a lower net growth rate. A substantial risk here is more churn than predicted on the register, both before (affecting initial register size) and after (affecting net growth rate) transfer. Whilst it is felt that most of the effects of speculative domain name registration and giveaway bundles have either worked their way into the register by now, or will have by the transfer time, this assumption might prove incorrect. If this is the case, Organic Names will achieve lower revenue figures than predicted. In mitigation, the demand modelling is such that a band of considerable slack is built into the 90% confidence level figures, and the modelling itself has been conservative. There is additional slack beyond this, and the first risk is that equity holders do not achieve their predicted returns, rather than the risk of business failure.
Requirements of Rapid Growth and Transition
Organic Names will need to recruit and grow fast, in order to achieve both the transition of the .org domain, and its continued subsequent successful operation. Whilst this is an area in which its executive board and management team have great experience, it would be incorrect to represent this as being without inherent risk. Again, this is mitigated in part by the ability to use CentralNic's resources.
Risk of business failure of key suppliers
Organic Names will rely on certain key suppliers to operate its service. Unfortunately, in the current environment for technology and telecommunications, business failures are common. Failure by key suppliers could adversely affect Organic Names ability to service its customers. To mitigate this risk, Organic Names proposes both to investigate, and maintain vigilance on the financial stability of its suppliers, as well as, wherever possible, to use a strategy of adopting multiple suppliers, for instance in respect of telecommunications services.
Risk of failure of key customers
Organic Names is reliant on revenue from its registrar customers to provide funding for its ongoing business. Some registrars, in particular VeriSign, constitute large single customers, and non-payment by such a customer would have an adverse effect both on Organic Names working capital position, and ultimately its results. This effect is mitigated firstly by the provisions for a conservative payment cycle and for bad debt within the business plan, and secondly by the fact that failure of any individual registrar to pay will eventually lead to withdrawal of DNS service, and in turn transfer of names by a large fraction of customers to an alternate registrar. However, in an extreme case, failure of registrars representing a substantial proportion of the names on the register might present Organic Names with serious cash-flow challenges. This is mitigated by slack capacity in the funding committed to Organic Names, and the intended strict policy on credit control.
Operation of root servers and gTLD servers
Organic Names is reliant on the continued stable operation of the root server constellation, and, until transfer to Organic Names, the continued functioning of the VeriSign gTLD servers. Both of these servers are outside the control of Organic Names. Failures within either group of servers, especially multiple simultaneous failures, is likely to adversely affect both the registry and registrar industry, and Organic Names will be no exception here. Whilst the number of servers in each constellation mitigates the risk, Organic Names sees two main risks: remote attack on the servers by malicious parties, and failure of Internet governance processes to reach suitable agreements for their continued operation. As far as the issue of attack is concerned, Organic Names is subject to the same risks, and will be happy to work with the community to devise mechanisms of reducing this risk. Equally, as far as Internet governance is concerned, Organic Names intends to play and active and constructive part in the processes which will lead to resolution of this issue.
Organic Names, and indeed any other bidder, relies on VeriSign acting in a fair and responsible manner. The safeguards placed on VeriSign in this respect are to a large extent controlled by ICANN, and the US Department of Commerce. Changes in the policy of either body might enable VeriSign to act in a manner which would disadvantage Organic Names. Organic Names thus intends to work closely with both organisations to minimise the risk of such an adverse policy change occurring.
Competition more than predicted
Whilst the new gTLD process has so far generated only a relatively small number of registrations, changes in the market place may cause an expansion of competition. For instance, it is possible that ICANN may choose to launch many new gTLDs, and it is conceivable that these might attract widespread take-up, to the extent that the size of the .org registry is adversely affected. Equally, it is possible that another existing registry is successful by marketing effort in persuading existing .org registrants not to renew their registration. Organic Names views these scenarios as unlikely. A more realistic competition problem might arise from competitive pressure on Organic Names to reduce its registration price. Organic Names believes it is an efficient registry operator, and will be happy to face strong, but fair competition. Organic Names will, through time, look to ensure its own cost base is as low as possible, and will, if and when appropriate, seek to renegotiate charges with ICANN if the competitive landscape changes.
Delays in launch / transition
Organic Names financial predictions rely on the smooth transition of .org according to the schedule published by ICANN. Whilst any slippage in this schedule can in part be mitigated by a parallel slippage in expenditure, some commitments may be necessary prior to Organic Names becoming aware of a change in timetable. Furthermore, not all expenses can be deferred. Organic Names will work closely and pragmatically with ICANN in order to ensure that the timetable does not slip. Organic Names trusts that ICANN will put pressure on VeriSign to ensure that they do not, by their action or inaction, cause slippage either.
Technical failure of Organic Names systems, if service affecting, may cause decline in revenue, and increases in expenditure as measures are put in place to remedy them. As detailed elsewhere in this document, Organic Names has put in place multiple resilient and redundant systems to ensure that failures (which are inevitable) do not affect service. Furthermore, Organic Names has developed and will institute procedures to ensure technical failures are remedied in the minimum amount of time. Organic Names will carefully choose suppliers, and monitor their financial stability and service level. Organic Names will ensure through its architecture that failure of one single telecommunications or data centre supplier will not cause customer outage.
Organic Names' business plans are predicated on the current state of Internet governance in the domain name market remaining approximately stable. A radical change in the governance landscape which was adverse to Organic Names interest could cause significant variances in the business model. At one extreme, part of, or the whole of the domain name system could be nationalised or otherwise absorbed by government or governments. A more palpable risk is the stability of ICANN as an organisation, which some commentators view as in doubt. Organic Names hopes to work closely and co-operatively with ICANN, and other governmental and governance institutions in order to minimise these risks.
Exchange Rate Variations
Organic Names revenues will be in several currencies (US dollars, euros, and UK pounds), but the majority of its costs will be in UK pounds. A movement in exchange rates could adversely affect Organic Names cash flow. Organic Names plans to investigate currency risk hedging options on award of the contract.
Profit and loss accounts (earnings statements), balance sheets, and cash flows for each of the three demand scenarios, together with breakdowns of costs, and size of register, are presented in Exhibit 7.
Organic Names plans to obtain commercial general liability insurance prior to contract signature. Organic Names desires to ensure that commensurate cover remains in place, and wishes to discuss the liability limit of this insurance with ICANN both prior to signature of the proposed agreement, and on an ongoing basis.
Note re Subcontract to CentralNic
Note that charges made by CentralNic under its contract with Organic Names have been looked through so they are correctly categorised under the projections presented within this section.
vi. CentralNic corporate profile
Originally founded in 1996 as NomiNation, CentralNic was re-launched in April 2000 as an independent global domain name registry committed to making it easier for Internet users to establish new and distinctive domain names with regional and country-specific identities.
Headquartered in London, CentralNic currently has a portfolio of more than 17 domain names available to users world-wide, including eu.com(Europe), uk.com(United Kingdom), us.com, (United States), cn.com (China) and ru.com (Russia). The total registry size exceeds 1.5 million names.
CentralNic uses the .com and .net standard domain name structure to offer additional regional and country-specific domain names, ensuring a secure, inexpensive solution for creating easily identifiable Internet addresses world-wide. CentralNic is proud that this innovative use of the domain name system was suggested by the late Jon Postel and recognises his contribution.
CentralNic's registry service is particularly useful for Internet users in countries where domain names are difficult to obtain due to restrictive domain regulations. However, the CentralNic portfolio also has wide appeal to individuals and companies seeking to define an Internet identity in a region or country where they intend to establish or expand their business, or for any other reason establish a geographically distinct identity.
Users often turn to CentralNic when a conventional Top Level Domain (TLD) such as .com, or a country TLD such as .uk address has already been claimed by another party. CentralNic customers include such well-known companies as Admiral Insurance, Electronics Boutique, Price Jamieson and Gucci.
Registration of a new domain name of choice costs approximately $99 retail for a two-year period, after which it can be renewed. CentralNic has a world-wide network of more than 1000 resellers that provides customers with efficient local access for registration. The company also provides extensive customer support, including legal expertise on such issues such as country specific regulations and individual vs. corporate ownership of domain names.
CentralNic also recognises the ICANN UDRP and has adopted the system in its terms and conditions of Registration. It is working with WIPO and ICANN to widen the scope of the UDRP to cover multiple domain name registries.
To serve its customers without interruption, CentralNic operates an expanding global network of Domain Name Servers running on the latest versions of Solaris and Linux to ensure maximum reliability and performance. The servers are co-ordinated and controlled from the company's network operations centre in London, United Kingdom. The nameservers for the .org registry will be separate and additional to this network.
vii. CentralNic past business operations/entity history
In the early days of the UK Internet, NomiNation, the first private Internet Registry Company, was launched to handle the domain name uk.com.
The idea came about as a direct result of conversations between the late Jon Postel ("Father of the Internet") and Stephen Dyer (Chairman of NomiNation) in 1995. Jon suggested the use of uk.com to compete with co.uk at a time when the proposed price of the co.uk name was £200 (about $300 US).
Subsequently, with the launch of the uk.com domain name, co.uk was offered at £80 and Nominet UK, the co.uk registry, did not hold a monopoly position. The two domain names continue to function in harmony, and the addition of uk.net, gb.net and gb.com provides the UK Internet community with the widest choice of local domain names.
The provision of a global domain name registry has proved a valuable service to organisations and individuals who want to have a presence in different countries but experience difficulty in registering a domain name because of local qualifying rules.
CentralNic offers an efficient and speedy registration service in a number of countries around the world and further countries will be added to the portfolio. Its world-wide network of reseller provides efficient local access for registration and assistance for registrants.
viii. CentralNic management
Co-Founder, Chairman and Managing Director, CentralNic
Stephen Dyer, co-founder, chairman and managing director, is an entrepreneur, Internet pioneer and systems designer whose 30-year career has spanned a broad range of industries from banking to airlines to scientific research.
Steve co-founded CentralNic in April 2000 with the vision of building an independent global domain registry and marketing company that will make it easier and less expensive for Internet users to establish new and distinctive domain names with regional and country-specific identities. CentralNic is a successor organisation to NomiNation, which Steve founded five years earlier, in 1995.
In addition to CentralNic, Steve is currently chairman of two other successful companies. In the early 1980s, he and his wife Diney, founded Mailbox Partnership, a fulfilment house providing creative, back office and other services to public relations companies, and in 1993 he formed Mailbox Internet Ltd., one of the first and most profitable business-to-business Internet Service Providers in the UK. He is also a Director of Nominet UK one of the largest registries in the world.
Prior to these positions, Steve served as Manager of Organisation and Methods for Rediffusion Group, a 108-company multinational conglomerate comprised of electronic media, financial services, computer manufacturing, flight simulation and other groups.
As a consultant, Steve's experience in systems design and implementation covers many industries. For example, he performed systems analysis and programming for the first global online ticket reservation and cargo scheduling system for BOAC, the predecessor to British Airways, and later provided systems advice for the merger of BOAC and BEA when British Airways was formed in the early 1970s.
Steve also designed and implemented systems for on-line analysis of human brainwaves for the Burden Neurological Institute in Bristol, UK. Other engagements included design and implementation of computerised banking and accounting systems for the Bank of Greece, and systems design for car control and rental billing systems for Hertz Rent-a-Car.
As a pioneer in the Internet industry, Steve is a well-known figure and participant at meetings of ICANN, RIPE and other industry groups. Steve also volunteers on working groups for the Council of European Top Level Domain Name Registries, the Policy Advisory Board of Nominet UK. He has recently been elected to the Council of the ISPA The UK's industry representative body for ISPs.
Steve began his career as a consultant at Arthur Andersen, after studying computer science, psychology and chemistry at Keele University.
Chief Technical Officer, CentralNic
Joel Rowbottom, Chief Technical Officer, is an expert in computer systems and networking expert and a published author. He specialises in database design and implementation on PC and Unix development platforms, and can write code in 15 dialects of 10 programming languages.
As CTO for CentralNic, Joel is responsible for implementing, developing and ensuring the reliability of the company's Internet Domain Name Registry, which is capable of accepting thousands of new registrations a minute.
In addition, he is a member of several working groups with CENTR (Council of European Top-Level Domain Registries), RIPE (Reseaux IP Europeens) and IETF. Joel proposed an XML format for registry interaction, many ideas of which were eventually incorporated into the EPP specification. He also works with several other groups on IPv6, the next-generation Internet Protocol, and the Internationalised Domain Name effort.
Prior to his role as CTO for CentralNic, Joel was Managing Director of Mailbox Internet Ltd., one of the first and most profitable business-to-business Internet Service Providers in the United Kingdom. Previously, Joel was a software engineer for Gemstar Europe where he provided software support and programming for publishing clients throughout Europe, frequently using C for Unix and DOS-based machines, and ThinkC and CodeWarrior for Apple machines. He also had sole responsibility for analysis, design and installation of in-house client-server databases using Visual Basic, Microsoft Access and MySQL. He worked on the European implementation of the digital TV system, StarSight EPG, and was one of the first qualified OpenTV programmers in the UK.
Through his published work and participation in various Internet forums, Joel is well-known throughout the UK's Internet community, and he has been written about in several national British newspapers and magazines.
Joel is co-author of Professional Linux Deployment (Wrox Press, 1999), and is currently working on a second Linux book. He has also published articles for several Linux publications including LinuxUser, PCPlus and LinuxFormat.
Joel holds a BSc degree in Special Computer Science with Information Engineering from the University of Hull, and holds numerous professional qualifications. He is a registered Sun Solaris and Java developer and a registered Oracle8i developer.
In addition to his love of computers, Joel is a jazz and pop pianist, and collaborates with several other musicians in his own studio. He is married with a daughter, and lives in Wakefield.
Marketing and PR Manager, CentralNic
Susan Malec joined NomiNation, the predecessor company to CentralNic, in March 1999 as Sales and Marketing and New Business Development Manager. CentralNic has experienced phenomenal growth during this period.
Previously, Susan Malec worked for international public relations counsel, Hill and Knowlton as Account Group Director, both in the UK and the Middle East.
With a career spanning over 15 years in public relations, she has worked closely with numerous international organisations including NCR, William Grant & Sons, Pepsi and Gallaher. In the Middle East, she worked on behalf of the American Agricultural Trade Office, the Australian Tourist Board and the Queensland Government Office as well as on behalf of Batelco, the Bahrain Telephone Exchange, and Cable & Wireless.
Operations Manager, CentralNic
After graduating in 1997 Camilla Coxe joined Rapidsite as Sales and Marketing Manager. Within 18 months Rapidsite had increased their client base from 500 clients to 25,000. At this point Verio - a US leader in Internet services and web-hosting - acquired Rapidsite and funded a marketing budget of £1.2 million per year.
Camilla joined CentralNic at its launch in April 2000. With the subsequent arrival of new domains eu.com, us.com and de.com, Camilla has assisted in achieving a sales growth of over 900% at CentralNic.
ix. CentralNic staff
The motivation and commitment of all employees continues to play a major part in the success of CentralNic.
CentralNic's policy is to promote equal opportunity in employment regardless of gender, race colour or disability, subject only to capability and suitability for the task and legal requirements. Employee ownership in the CentralNic will be encouraged and CentralNic has a share option plan for employees.
CentralNic places great emphasis on the training and development of its employees and is always receptive the individuals aims and career development through internal and external training and qualification.
A substantial amount of skills training is also carried out in all areas. CentralNic has a comprehensive internal communications programme to ensure employees are well informed about the business and the industry in general.
x. Other pertinent considerations
The Organic Names bid seeks to bring a refreshing simplicity to the domain names business.
The first indication of this simplicity is Organic Names' corporate structure. The company is incorporated in the United Kingdom and operates under UK law. The UK shares language and many values with the United States and many Commonwealth countries view it as a safe haven for the operation of .org. Democratic stability and a stable and predictable tax regime make it a better home than possibly more profitable offshore environments.
As a member of the European Union and EFTA, the UK has free trade agreements with the world's biggest single market.
In addition, bringing the .org registry to the UK would qualify the organisation to be part of the Enterprise Investment Scheme, a symbol of the UK government's commitment to enterprise. This connection will be advantageous in terms of tax benefits.
One of the aims of ICANN was to foster the process of migrating the Internet from the control of the United States Government into the private sector and from a US-centric to a World-centric perception of Internet governance.
It has been the public position of successive Administrations that the perception of US hegemony over the Internet was damaging to US interests. For this reason ICANN was founded with this mission.
The success of this process has been limited by a number of factors, but fundamentally they stem from the fact that most of the large registries of the world are US based. Those US based registries have reached out to purchase or merge with smaller registries and registrars in foreign countries.
The effect of this process is that control of the Internet by American corporations, and therefore ultimately by the US Government has increased.
Organic Names believes it important therefore that .org be placed in the hands of a non-US body with sufficient financial strength and determination to reverse this process and allow both ICANN and America to show their commitment to globalisation of the Internet.
Today there are two registries in the non-American world comparable in size to .org, Nominet UK and DEnic. Placing .org with a non-US applicant, which seeks to operate the registry through a non-US company, outside the US, will make a political statement which is long-awaited by Internet Communities and governments the world over.
Organic Names is a registry specifically designed to fulfil this independent role.