A. General Description of the Application
  1. TLD String(s) Requested.
  2. Category.
    General Purpose, General.

    KDDISOL Internet Solutions Co., Ltd. (“KDDISOL”) requests 2 TLD’s with its application focused primarily on the .biz TLD. KDDISOL targets a broad registrant and end user base and focuses primarily on commercial uses. KDDISOL qualifies for the general purposes category and general group.
  3. Sponsor, Registry Operator and Subcontractor.
    a. Sponsor. Unsponsored Application.
    b. Registry Operator. KIDDISOL was organized in June of 2000 under the laws of Japan for the purpose of advancing Internet-related activity in Asian/Pacific markets. KDDISOL was a wholly owned subsidiary of KDD Corporation. However, KDD Corporation, DDI Corporation and IDO Corporation planned to merge on October 1, 2000 with DDI Corporation as the surviving corporation ("DDI") making KDD a wholly owned subsidiary of DDI. Post-merger, DDI claims it will be the only telecommunications service provider which provides seamlessly all types of telecommunications service from mobile to fixed. KDDISOL is currently hosting two name servers of existing generic TLDs-- .com, .net and .org. These systems are located in Tokyo (the first system deployed in Asia) and in Los Angeles. KDDISOL will subcontract most of the registry functions to Network Solutions, Inc. ("NSI") during the first of two phases currently planned for the implementation of the new generic TLD. The duration of phase one is anticipated to be approximately one year. The basic operational relationship envisioned by KDDISOL between it and NSI is one that will diminish over time. By the end of phase one, KDDISOL intends to be fully capable of operating its registry and by the end of phase two the necessity for NSI's direct operational participation is planned to be eliminated.
    c. Subcontractor. NSI has been the provider of .com, .net and .org domain names since 1991. In August of 1999 the Network Solutions Registry began operations as a separate business unit of NSI. In June 2000, VeriSign Global Registry Services Division ("VeriSign") acquired NSI and renamed the Registry division, VeriSign Global Registry Services. VeriSign provides back-end domain name addressing, resolution and distribution services for ICANN registrars. VeriSign claims to be currently serving over 60 production ICANN accredited registrars and over 60 pre-production ICANN registrars.
  4. Registry-Registrar Model.
    With regard to registering domain names with the new TLD, KDDISOL intends to utilize the current group of existing ICANN accredited registrars.

B. Technical Review
  1. Summary Description of Proposal.
    KDDISOL proposes the .biz and .home TLDs as direct equivalents of .com. The basic justification is that this will triple the number of domain names available for similar purposes. VeriSign (Network Solutions) would serve as a subcontractor in the first year, with operational responsibility shifting to KDDISOL in subsequent years. KDDISOL estimates 464,000 registrations in the first year, growing to 12 million new registrations and 21 million cumulative registrations in the fourth year. As a competitor to .com there will be no restrictions on registration.
  2. Support of the Business Plan by the Technical Plan.
    a. Total Capacity. KDDISOL proposes a system configuration based on current experience of NSI with large registry operation.
    b. Projected Growth Rate. The system is well configured for the expected growth rate.
    c. Startup Period. KDDISOL proposes to compete directly with the current .com name space, however, the estimates for initial registration demand seem quite low, given that many current registrants in .com would almost certainly want duplicate registration in a competing TLD. Applicant’s approach to handling the initial registration surge is to rely on the designed-in overcapacity of the system. KDDISOL should consider using a specific approach to handling or limiting the initial surge (such as request batching, as has been proposed by other applicants).
    d. Fault Tolerance. The proposed approach to availability follows well-understood principles and does make use of geographical dispersion for the DNS and registry functions. The proposed plan was somewhat unclear on whether transfer of registry operations to a secondary site would be automatic or manual. An approach that supports continuous registry operation even in the face of catastrophic failure at one site would be preferred.
    e. Security. KDDISOL provides a very detailed picture of the security arrangements. Security is addressed at every level and makes use of state of the art tools. In fact, in some cases, KDDISOL intends to use research level tools to detect intrusion patterns of various types.
  3. Summary of Relevant Experience.
    VeriSign (NSI) is the current registry operator for .com, .net, .edu and .org. KDDISOL has extensive experience in the development and deployment of telecommunications and internetworking solutions. KDDISOL has identified a capable technical team to oversee the development and hand off of the system. KDDISOL’s proposal also outlines its extensive work in providing complex communications based services through out Japan and on a worldwide basis.

    Although KDDISOL makes use of VeriSign in the initial stages of the project they have the intention of taking over operation of the registry approximately one year in the future. KDDISOL’s organization has excellent technical qualifications. It is clear that KDDISOL made a significant contribution to the proposal, especially with respect to security.
  4. Apparent Implementation Risks.
    The main risk is that the requirements for the startup period may be far higher than have been projected. The proposal seems to assume that most registrants in .com would not seek the corresponding .home and .biz SLDs.
  5. Available of Human, Operational and Technical Resources to Cope with Unexpected Events.
    The two organizations have plentiful human, operational and technical resources to cope with surprise.

    The applicant’s capacity approach is to engineer and implement the system to a capacity twice what is anticipated as required at the five year point. The capacity estimation is based on measurements currently available from the VeriSign system currently supporting the .com registry.

    The proposal demonstrates a deep knowledge of availability and security issues. KDDISOL has analyzed potential problems from several perspectives. Both availability and security are analyzed using a layered approach.
  6. Advancing the State of the Art.
    None, other than minor tinkering with Whois.
  7. Other Comments.
    The proposal is extremely impressive in its attention to detail and the completeness of the technical plan. The combination of KDDISOL and VeriSign is clearly able to construct a world class technical solution, covering capacity requirements, growth requirements, fault tolerant operations and security needs. Given that .home and .biz are intended to be functionally equivalent to .com, the estimates for registrations in the first two years, and particularly the first quarter, seem very low. Even so, it is likely that the combination of these two organizations could react quickly to increase capacity.

    The proposal seems to assume that most registrants in .com would not seek the corresponding .home and .biz SLDs. This may not be a valid assumption, increasing the load in the “land rush” period.

    KDDISOL has presented a complete and detailed proposal of the technical approach it will take to establishing, maintaining and extending its registry operation. Both the applicant and the proposed sub-contract have the technical capability build the proposed registry. Based on the application, it is clear that KDDISOL alone would be capable of constructing the registry, use of an establish, proven large-scale registry operator for the initial phase enhances the chance for ultimate technical success. KDDISOL is capable of taking over operation of the VeriSign in phase two and has presented a plan for the hand-over.

    KDDISOL’s proposal provides very good detail on all aspects of capacity, redundancy and security. The security plan in particular shows complete attention to detail at many levels, including the use of innovative tools for detecting external attacks.

    KDDISOL proposes to compete directly with the current .com name space, however, the estimates for initial registration demand seem quite low, given that many current registrants in .com would almost certainly want duplicate registration in a competing TLD. KDDISOL’s approach to handling the initial registration surge is to rely on the designed in overcapacity of the system. It should consider using a specific approach to handling or limiting the initial surge (such as request batching, as has been proposed by other applicants).

    The approach proposed by KDDISOL would not advance the state of the art, except with respect to specific internal implementation approaches to availability and particularly security.

C. Business Review
  1. Applicant’s Representations.
    The registry operator, KDDISOL, is a new company, established in June 2000, for the purpose of advancing Internet-related activity in the Asian/Pacific markets. KDDISOL is a 100% owned subsidiary of KDD Corporation of Japan (“KDD”). KDD has a long successful history in the business of international telecommunications. For the year ended March 31, 2000, KDD had total assets of $10.7 billion USD, operating revenues of $5.6 billion USD, and net income of $69 million USD.

    KDDISOL is fully supported by KDD in its business. It is currently hosting two name servers of the existing general TLD’s - .com, .net, .org. KDDISOL currently has four employees and projects the need for 43 employees by year four of operations. KDDISOL will offer marketing and customer services and will outsource most registry operations to NSI in phase one. During the second phase, KDDISOL will assume primary responsibility for the registry and NSI will have secondary responsibilities.

    The subscription-based revenue model includes a $9 annual registration fee declining by $1 in quarters two and three. The price will be $6 annual registration fee in phase two or the beginning of year two. KDDISOL will utilize the current group of ICANN accredited registrars and will offer an unrestricted general TLD. KDDISOL plans to actively market the general TLD and projects registrations of 21.1 million by year four of operations.
  2. ICANN’s Evaluation.
    The strengths of the application include support from a parent company that has significant resources and an outsource partner, that has vast experience in the Internet and registry operations. A weakness of the application is that the significant involvement by NSI may not foster as much diversity as other applications. More specifically, in year 6, NSI outsourcing costs are 89% of the total costs. Further, the marketing plan is weak with few details. Overall, given the financial strength of the parent and the technical capabilities of the outsource partner, this is a stronger application in this category from a business perspective.

D. Summary of Public Comments
  1. Number of Comments.
  2. Support for the Application.
    This proposal would provide geographical expansion of control of TLDs outside the U.S. (Japan). KDDI has extensive connectivity in the Asia/Pacific region and, in the past, has provided a high level of service.
  3. Opposition to Application.
    .biz would create confusion with .bz (generic comment made about all .biz applications).