AFILIAS, LLC


A. General Description of the Application
  1. TLD String(s) Requested.
    .info
    .site
    .web[1]
  2. Category.
    General Purpose, General.

    Afilias, LLC (“Afilias”) requests several TLDs which are unrestricted. Afilias targets the broadest possible registrant base and end user group with almost exclusive focus on commercial uses. As such, Afilias qualifies for the general purpose category and general group.
  3. Sponsor, Registry Operator and Subcontractor.
    a. Sponsor. Unsponsored Application.
    b. Registry Operator. Afilias, was formed on September 25, 2000 as a Delaware limited liability company and is owned by a consortium of 19 ICANN accredited Internet domain name registrars. Afilias was founded to operate an unsponsored, unrestricted generic TLD registry. Afilias' members include:

    • 1stDomain.net, a division of G+D International LLC
    • Corporate Domains, Inc.
    • Domain Bank, Inc.
    • DomainInfo AB
    • DomainPeople Inc.
    • Domain Registration Services
    • Enter-Price Multimedia AG (EPAG)
    • Internet Council of Registrars (CORE)
    • interQ Inc.
    • NameSecure.com, Inc.
    • Netnames International Ltd.
    • Network Solutions, Inc. Registrar Operations
    • Polar Software Ltd d/b/a Signdomains.com
    • Procurement Services International (Japan), Inc.
    • Register.com
    • Schlund + Partner AG
    • SiteName
    • Speednames, Inc.
    • Tucows, Inc.

    Afilias executed a term sheet with Tucows, Inc. ("Tucows") wherein a joint venture between Tucows and Q9 Registration Services will serve as the technology provider to Afilias and provide the technical infrastructure and database management of the TLD registry for at least the first two years of operation.
    c. Subcontractor. Tucows, Inc. ("Tucows") was formed in 1994 and incorporated on May 1, 1999 in the state of Delaware with its principal office in Toronto, Ontario. Tucows describes itself as a leading distributor of e-business services and applications on the Internet and to have a network of more than 4,000 Internet service providers, Web hosting companies and domain name resellers in more than 100 countries around the world. Tucows further purports that its website offers over 30,000 software titles in libraries located around the world, providing users with fast local downloads. Tucows is an ICANN accredited registrar and claims to be a leading provider of wholesale domain name registrations and related services.
  4. Registry-Registrar Model.
    Afilias does not intend to deal directly with domain name registrants. Afilias plans to offer all registrars that are accredited by ICANN pursuant to the ICANN registrar accreditation agreement the opportunity to register domain names in the proposed general TLD. Afilias does not plan to restrict the number of qualifying registrars that may register names in the proposed general TLD and plans to treat all qualifying registrars equally. Furthermore, registrars have the opportunity to become owners in Afilias and share in the company’s rebate program.

B. Technical Review
  1. Summary Description of Proposal.
    TLD strings in order of preference would be .web, .info and .site.
  2. Support of the Business Plan by the Technical Plan.
    a. Total Capacity. Presumably the requirements would approach that of the current .com since one might expect many users to double register. The system has an adequate capacity and scalability to handle a high level of traffic.
    b. Projected Growth Rate. Projected growth is very rapid at up to 125,000 names in the first day. Special processing techniques would be used to limit initial load.
    c. Startup Period. It is projected that about two million names will be registered during the startup period with perhaps 900,000 names in the first month. Applicant will handle the initial rush of applications using a batch processing approach and a mechanism to randomize selection.
    d. Fault Tolerance. Equipment is co-located in Exodus managed sites. Redundancy is based on clusters of servers fed by load balancers using standard designs. Registry data bases are replicated on a dynamic basis allowing immediate switch over to an operating data base. Registry data base will be mirrored at a remote location. The remote location will operate as a cold back up to the primary site. DNS servers are located world wide.
    e. Security. The use of Exodus Communications offers strong physical security measures. Some issues of security are a little underspecified, such as the password procedures used and whether links between sites are properly secure. Issues of securing the connections between the mirrored facilities should be more completely discussed. There is no discussion of logging and monitoring facilities for security purposes, nor of periodic security reviews of the system.
  3. Summary of Relevant Experience.
    Tucows is a registrar and operates SLD registries. It appears that this organization has about 200,000 names under management. The registry operator currently has about 250 employees. Proposed staff has a relevant range of experience.
  4. Apparent Implementation Risks.
    Because the projected initial load is very heavy the capacity in systems and personnel may be exceeded. Applicant should develop a clear performance measurement strategy and a testbed approach that will ensure proper operation at initiation of service. The company proposes to throttle registration demand during the initial period by “batch processing” registrar requests. This approach should be successful in controlling the load during the initial operating period.
  5. Available of Human, Operational and Technical Resources to Cope with Unexpected Events.
    Among the member companies of Affilias there is a great deal of technical knowledge about the DNS and the design and operation of large, fault tolerant systems, including the development of registry software. The Applicant suggests that these people could be made available to Affilias in case of need. Applicant has identified a core team with good expertise that would oversee sub-contract, and in addition specific sub-contractor personnel with appropriate experience have been identified. Applicants are registrars and are currently involved with related software development activities. After a two year term applicant has the right to purchase the sub-contractor developed software and operate the registry directly.
  6. Advancing the State of the Art.
    Applicant plans to make use of current registry protocol, but also will develop an enhanced protocol based on XML. Applicant proposes to include additional, unspecified information in the registry database. Whois would be centralized and would be kept up to date in almost real time. Zone maps will be updated at five minute intervals.
  7. Other Comments.
    None.

C. Business Review
  1. Applicant’s Representations.
    Afilias, LLC is an organization recently formed by 19 different accredited registrars to establish and operate an unsponsored, unrestricted generic top-level domain registry. Each member of the consortium owns 5.25 percent of the company and no entity will be able to own more than 11 percent of Afilias, either as a result of any acquisition or potential consolidation among membership interests. New registrars will be allowed to take ownership positions in Afilias. These new registrars will be issued Class B interest whereas the original members will be issued Class A interest. These shares have similar voting and distribution rights except that the voting and distribution rights of the Class A interests cannot be less than 40 percent even though their actual ownership interests can reach less than 40 percent. Tucows, Inc. will be a technical partner and provide the back-end registry services. Afilias’ mission is to expand the Internet as a global resource that fosters communication, commerce and community by introducing a new unrestricted global domain name to Internet users around the world.

    The revenue model includes a charge for each domain name of $5.75 and registrars will be required to register each domain name for a minimum of two years and a maximum of ten years. In the first and fourth years, Afilias is expecting total registrations of 2.6 and 16.2 million registrations, respectively. This model also includes a rebate for the registrars based on the numbers of domains registered in the registry and can reach 25% of the available profit.
  2. ICANN’s Evaluation.
    The strengths of this application lie in (1) the thorough understanding of the marketplace, (2) a solid marketing plan developed by OgilvyOne Worldwide and Hill and Knowlton Public Relations, (3) a strong rationale for expected demand and (4) a thoughtful assessment of the resources required to meet demand. Overall, this is a strong application in this category from a business perspective.

D. Summary of Public Comments
  1. Number of Comments.
    150

    At least 56 different people posted comments. 6 different people posted 10 or more comments each; 3 different people posted between 5 and 9 comments each. At least 75 of the posts were ad hominen comments between individuals or were off-topic.
  2. Support for the Application.
    “Here are six reasons why [Afilias should be selected]:

    (a) Low registry fee - $5.95
    (b) Extensible RRP (XRP)
    (c) Centralized Whois
    (d) Competition among ICANN Accredited Registrars
    (e) Able to handle over 1 million registrations
    (f) Sun-rise period for trademark holders”

    “Please ICANN, if you decide to go with .web, you must go with Afilias – the open consortium with limited ownership and open to any ICANN registrar to enter into.”
  3. Opposition to Application.
    “I do not support the Afilias application for .info, .site or .web. Afilias is the epitome of the monopolistic beast the internet needs to avoid… This is a transparent grasp at power by the powers-that-be. URL suffixes represent power and profit for the successful registry. These suffixes ARE the internet.”

    “I think a case can be made that when you have the dominant players in the market who were once competitors join together raises the issue of restraint of trade and anti-trust. This application will do more harm for the market than most people realize. We need to learn from history.”

    “NSI, Register.com and CORE control 98% of existing domain registrations! Please ICANN, don’t give complete control to Afilias! Without competition the public service will suffer, R&D will suffer and the internet users of the world would loose!”

    “Sanctioning the Afilias group is on a par with Microsoft, Linux and Apple taking charge of a new operating system or Intel, AMD and Cyrix taking over a rival microprocessor firm. I don’t doubt that Afilias has the know how and the money to make a damn good job of running a new TLD and they have all the experience you could need – but that is not why we are all here…. If the world was enthralled with the service it had received so far then I would be posting a different message here but I … have received such poor service from the established players that the only just thing to do is bring in some new ones.”

    “ICANN, the last thing you want to see is another conflict of interest registrar/registry. This time multiplied by 20 (or whatever the number of partners in Afilias is.) Please ICANN, say no to Afilias.”

    “As reported by the ICANN Yokohama Meeting Topic document, there is widespread dissatisfaction about the absence of competition in domain name registration. If you give .web to NSI, dissatisfaction becomes complete.”

    “If Afilias get the .web TLD it would be nothing less than a great scandal. The monopoly of NSI would continue and there would no doubt be speculations about Ken Stubbs’ conflict of interest.”
  4. Substantive Comments and/or Questions.
    “I think that introducing a new RRP interface right now is a bad idea. The Afilias proposal includes creating an IETF task force to document an XML-based RRP. However, this IETF task force should complete its work before a registry is approved by ICANN to come online using the new technologies. The current RRP is tested. Registrars have been certified on it. It should be a simple matter of running a certification check against new registries’ RRPs for existing ICANN accredited registrars to go live. The first pass at new gTLDs should use existing interfaces. Yes, new technologies should be used to implement the Generic RRP Requirements as currently defined… but let’s get a few new gTLDs running with multiple accredited registrars before introducing an entirely new infrastructure.”

    “Afilias was built out of 19 high-profile companies, some of which had a competitive status beforehand and all of which were active in the same field: The Internet. With the creation of Afilias, this open and competitive status was changed towards a monopolistic one. Normally such a process, the organization of cartels, is monitored through respective authorities having supervision of cartels.”

    “I too am horrified by a window period. Let me give a hypothetical situation. What if Palm wants to register palm.site or palm.info or palm.web? They already have palm.com. Let some palm reader get palm.info. Also, who’s to stop Palm from reaping all the other related domains like pda.site, pda.info, pda.web, handheld.site, handheld.info, handheld.web, wireless.site, wireless.info, wireless.web? Where does it end? … We need to let smaller companies have a shot at it too. I am sick and tired of the “consortium” of monopolists. They already are monoliths in the internet. Let someone else have a chance.”

    “Afilias is controlled by the trademark lobby where protectionism is all this proposal stands for.”

    “If I have done my math correctly, then Afilias is actually forecasting a negative ($5,650,000) earnings at the 90% confidence level? Year 2 gets worse when the TP fees swell to $9.3M. First of all, what type of sound management team would spend 97% of their revenues on marketing? This type of shotgun branding is what got many a dotcom company in trouble as a viable ongoing concern. … Afilias does make mention to the ability to receive additional outside funding. But if the 90% confidence level is what occurs as is inherently expected, then I question how deep the pockets will be from such third party funding (and from who).”

    “I really can not figure why Afilias, with all of their resources and ‘experts’ would submit an application expecting to lose money at the 90% to 50% confidence level….[I]t is not unreasonable to conclude that Afilias is looking to buy the .web space, even if it means losing money in the process, just so a competitor can not. With NSI on their team, they have the capital resources to tap whenever necessary…. I am not saying that .web still won’t have its place under the Afilias direction. But probably more on the par to .net rather than making a serious run at .com…”

    “From Afilias Registry Operator’s Proposal (Part 1) – ‘At the end of the grace period, if not reinstated, the domain name will immediately be released back to the general pool of available domain names and the Company will credit the registrar’s account for the registration fee.’ This is the same loophole Network Solutions has utilized to not release expired domains which has resulted in a compromise of database integrity on the part of NSI, the registry. They are currently close to (if not over) a million expired domain names NSI is currently holding in com, net and org. NSI has publicly stated a desire to place the names on their own auction site as a means to recapture their $6 registry fees. They have not, to my knowledge, gone on record as stating how the ‘on-top’ proceeds from the auction sale would be recognized – but one can use their imagination. So, not only is Afilias not addressing this issue of registry database integrity, they are looking to duplicate it. And the other registrar’s that do not pony up $ to be part of this conglomerate? Well, they have no chance to be the registrar for the expired domains for the .web, .site and .info TLD’s. Great competitive system/plan.”

    “The obvious conflict of interest here is that NSI is also a registrar (the largest by the way). To their own advantage, NSI the registrar can choose not to notify their own registry ‘to delete’ thus allowing the registry to hold the name on the grounds they have a right to get their $6 back. … This, to me, is a serious compromise of database integrity on the part of the NSI registry strictly for their own potential financial gain. Purposely allowing such a compromise to take place poses serious questions as to whether NSI should, in any way, be involved in any additional registries. … Afilias, to their arrogance, has submitted an application that duplicates this exact process.”

    “NSI is not represented on the board of directors. So how can NSI be leading them? NSI has less than 5.25% in Afilias equal to each entity. Afilias will provide qualified ICANN-accredited registrars the opportunity to take an equity position in Afilias. … IOD’s monopoly doesn’t offer that. Look: John S. Frangie – 52.4%; Christopher Ambler – 37 % ownership; Peggy Pierce – 5% ownership; Tracey Thomas – 5% ownership. … Afilias will charge US$5.75 for each domain name registration per year. IOD’s rates: $15 per name, per year and the registry, $20 per name, per year at the registrar, $35 per name, per year total. Now that is going backwards … so where is the competition [?]”

    “I can’t believe my eyes. Is the following profile really true (aside from being a board member at Afilias)? Kenyon Stubbs, Chairman of the Executive Committee, CORE; Vice President Domain Bank; Chairman of the ICANN Names Council. Isn’t Domain Bank one the 19 registrars of Afilias? What is going on here?”

    “Testimony of Ken Stubbs, U.S. House of Representatives, Committee on the Judiciary, Subcommittee on Courts and Intellectual Property, Internet Domain Names and Intellectual Property Rights, July 28, 1999:

    ‘The Internet community has come together through ICANN to adopt consensus-based procedures that will minimize conflicts between intellectual property interests and the domain-name system. ICANN's DNSO and the ICANN-accredited registrars are working on a dispute resolution policy that will serve the legitimate needs of intellectual property owners, the public, and business alike. These efforts, however, have been effectively thwarted by NSI's refusal to participate constructively in the ICANN process and to become accredited so that it operates under the same rules as its competitors. Instead, NSI has sought to stall the introduction of effective competition by making spurious claims of ownership in publicly owned intellectual property and by adhering to its own policies that provide it unfair competitive advantages, while wrecking significant harm on the intellectual property of others.’
    “But now Mr. Stubbs sits on the Board of Afilias, a conglomerate which includes Network Solutions, vying for control of highly-prized new TLD'S. Thanks for selling us out, Mr. Stubbs.”

    “Ken Stubbs is the Chairman of the Names Council and Chairman of CORE - a member of Afilias. This is obviously a huge conflict of interest!”

[1]Preferred TLD.