ICANN | Questions to and Answers from Applicant for .per

Questions to and Answers from Applicant for .per

ICANN Questions:

ICANN is in the process of reviewing JVTeam's TLD Application. As outlined in the October 23, 2000 TLD Application Review Update which appears at http://www.icann.org/tlds/tld-review-update-23oct00.htm, ICANN may "gather the additional information [it] require[s] by posing specific questions to applicants in e-mail and requesting a written response."

Keeping in mind the goal to evaluate applications to operate or sponsor new TLDs in as open and transparent a manner as possible, both the questions posed by ICANN and the Applicant's responses will be publicly disclosed on the ICANN website. Accordingly, ICANN requests your reponses to the following questions:

1. Identify and describe in detail the portion of "Other Direct Expenses" which are related to marketing costs?

2. Identify and summarize Applicant's assumptions with respect to the existence of other general purpose TLDs in determining the total number of registrations in your application.

3. State in detail your position as it relates to possible legal claims by certain applicants and/or non-applicant third parties based on alleged trademark, patent or other violations of purported rights in the TLDs identified in your application.

4. If you receive a new TLD, state whether you will indemnify ICANN for claims arising from legal challenges regarding your right to operate the new TLD. If you will indemnify ICANN, identify and describe in detail the resources you propose to utilize for the indemnification.

5. Hypothetically, if you receive .nom as a new TLD instead of .per, describe in detail the effect, if any, on the pro forma financial statements submitted with your application.

JVTeam Responses:

1. The marketing expenses enumerated in the .per proposal captured only the media expenses, i.e., print ads, radio spots, etc, outlined in the marketing plan. In the table below, we identify the portions of other direct expenses that are attributable to marketing that include PR efforts, staff salaries and travel expenses, marketing publications, and trade show events.

Additional Marketing Expense that is a part of Other Direct Expense

			Year 1       	   Year 2             Year 3          	Year 4

PR                      0.21m          	   0.22m              0.23m           	0.24m

Trade Shows             0.42           	   0.44               0.46            	0.48

Marketing Materials     0.14           	   0.15               0.15            	0.16

Staff and T&E    	2.31               2.96               3.30           	3.60

Revised Marketing Expense

  			Year 1             Year 2             Year 3             Year 4

50-50 Interval          11.02              7.45                7.66                7.89

10% Interval            11.02              7.45                7.66                7.89

90% Interval            11.02              7.45                7.66                7.89

Revised Other Direct Expense

                     	Year 1             Year 2             Year 3             Year 4

50-50 Interval          13.64              17.71              19.44              19.98

10% Interval            10.38              13.25              14.29              15.73

90% Interval            10.53              13.72              15.19              17.04

2. The JVTeam believes that forecasting the impact of other TLDs on the demand for .per is crucial to sound forecasting methodology. The JVTeam has incorporated the impact of both, general purpose TLDs and the introduction of multiple personal TLDs over time, on the demand projections for .per.

The JVTeam has made the following assumptions about the impact of other TLDs on new registrations for .per.

1) Our forecast assumes that the market penetration for personal TLDs increases over time and that new competing personal TLDs will be introduced. We have incorporated this assumption into the profile of our market share assumption. For the 50% .per forecast JVTeam has assumed that our market share declines from 100% of restricted personal use gTLDs initially to 60% in four years.

2) Our forecast takes into account the effects of general purpose TLDs in its penetration assumption of online users. These penetration assumptions have been weighted to account for some users preferring general purpose TLDs over personal TLDs. We have assumed that over time consumers will begin to prefer personal TLDs over general TLDs. For the 50% .per forecast the JVTeam has assumed that the penetration of online users who purchase TLDs will be 0.25% initially growing to 5% in 4 years.

3. JVTeam recognizes the role of ICANN as the only body that can accredit gTLDs. In addition, we believe that the California Court decision that has been made relating to trademark claims associated with gTLD names, stating that gTLD names can not be trademarked, is a solid court decision based on existing law and establishes the required legal precedence to support a successful defense of any claims that may arise.

JVTeam is not aware of any alleged "patent or other violations" that would be infringed or existing claims of such infringement. If awarded a personal gTLD, however, we would be prepared to defend any alleged violations or patent claims associated with our technical solution and to indemnify ICANN any associated legal costs.

4. If awarded a personal gTLD, JVTeam will assume all legal expenses associated with claims of other third parties may make in relation to ICANN's right to award the gTLD or related to JVTeam's right to operate a registry associated with the awarded TLD. The resources to be utilized includes the use of both JVTeam internal legal resources as well as the retention of qualified outside counsel. The verifiable JVTeam financial resources required to do so are documented in our .per application.

5. JVTeam would expect no material effect on its submitted pro forma financial statement if we were to receive .nom as a new TLD instead of .per. We stand ready to fully support .nom as an alternative to .per.

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