ICANN Logo

Report on TLD Applications: Application of the August 15 Criteria to Each Category or Group
(9 November 2000)


d. Restricted Commercial Group

The five applications in this group are:

Applicant

Strings Requested
Association Monesgasque des Banques .fin
dotLAW, Inc. .law
International Air Transport Association .travel
RegistryPro, Ltd. .pro
The dotPRO Consortium .pro

Threshold Review

The evaluation team applied the first and the last criteria to these applications. As a result of this review, the evaluation team concluded that the following applications merited further review:

Applicant

Strings Requested
Association Monesgasque des Banques .fin
International Air Transport Association .travel
RegistryPro, Ltd. .pro

The technical team concluded that dotLAW's proposed technical plan did not support the proposed business plan in several areas, including lack of experience in running a registry of a comparable size and an inadequate fault tolerance design. The technical team was also concerned that the proposed TLD would operate at a scale of 100 times that of the applicant's existing experience and that its plan did not appear sufficient to handle this increase. The technical team was further concerned with the security design of the proposed system. The business/financial team concluded that dotLAW's application was incomplete and weak in several respects, including the weak treatment of the marketing plan, a lack of details and a withdrawal of the pro forma financial statements because dotLAW and ICANN were unable to agree upon dotLAW's request for confidential treatment of those statements.

The dotPRO Consortium used the same assumptions and pro forma figures for its .pro application as it did for its .nom application. Since the professional name space and the personal name space have different competitive profiles, demand expectations and adoption curves, the business/financial team concluded that the dotPRO Consortium's application lacked a level of specificity and the figures were more applicable for the .nom application. Overall, this application was not as strong as other applications in its group.

Comparison

Having applied the first and last of the August 15 Criteria to these applications as a threshold matter, the evaluation team evaluated how each of the August 15 Criteria should be applied to proposals for these TLDs. The evaluation team concluded that the August 15 Criteria apply as follows:

August 15 Criteria

Application to Restricted Commercial Group
The need to maintain the Internet's stability Generally applies
The extent to which selection of the proposal would lead to an effective "proof of concept" concerning the introduction of top-level domains in the future Applies primarily with respect to the introduction of a large restricted, primarily commercial top-level domain
The enhancement of competition for registration services Generally applies
The enhancement of the utility of the DNS Applies primarily with respect to appropriateness of the TLD label, avoidance of confusion of TLDs and the extent to which the TLD will aid users
The extent to which the proposal would meet previously unmet types of needs Applies primarily with respect to expanding the DNS to a restricted, primarily commercial top-level domain
The extent to which the proposal would enhance the diversity of the DNS and of registration services generally Generally applies
The evaluation of delegation of policy-formulation functions for special-purpose TLDs to appropriate organizations Applies primarily with respect to .fin and .travel
Appropriate protections of rights of others in connection with the operation of the TLD Generally applies
The completeness of the proposals submitted and the extent to which they demonstrate realistic business, financial, technical, and operational plans and sound analysis of market needs Generally applies

Representativeness, stability, meeting unmet needs and enhancement of the utility of the DNS seem particularly relevant to analysis of these TLDs.

Representativeness (.fin and .travel)

Two applications in this group raise significant representativeness issues. Both applications are for sponsored and somewhat restricted TLDs. (RegistryPro applied for an unsponsored TLD.) The August 15 Criteria require analysis to determine whether sponsored restricted TLDs are appropriately representative of the affected segments of the relevant communities.

Association Monegasque des Banques (.fin)

The Association Monegasque des Banques applied for .fin. The Association is a private, not-for-profit entity incorporated in the principality of Monaco. The Association proposes to form the Financial Internet Domain Association (FIDA) as the sponsoring organization. Although the Association states that it is not currently in a position to describe accurately the criteria a party must meet in order to register in the .fin TLD, it appears that generally registrants would be limited to institutions that could prove affiliation or certification by a national regulator related to the financial industry.

The Association asserts that it is representative of the estimated 1.0 million potential registrants in the global banking and financial industry. However, most of the small number of public comments to the ICANN Public Comment Forum from members of the banking industry and from a bank regulatory body object to the Association's application on a representativeness basis, among others. In its answer to a question from ICANN relating to the uniqueness of its position in representing the diverse needs of the international financial community, the Association asserts that Monaco, as an independent, sovereign and neutral state, is in a unique position to host FIDA because it cannot be suspected of engaging in power-based politics, provides a mature and efficient financial environment and is geographically situated to allow ease of communication between eastern countries and the Americas. In its answers to ICANN questions regarding the responsiveness of, and the criteria for selection of the sponsoring organization's directors, the Association did not adequately explain how its proposed governance structure is responsive to the diverse needs of corporations and professionals operating in the finance sector nor did it adequately explain the proposed criteria for the selection of FIDA's directors.

On the basis of this information, the evaluation team cannot conclude that the Association has demonstrated that it is or would be broadly representative of the global banking and financial industry.

International Air Transport Association (.travel)

The International Air Transport Association (IATA) applied for .travel. IATA is a not-for-profit association whose membership includes 275 airlines based in 143 different countries and territories which collectively account for 95% of the world's scheduled international air traffic. Registrants in .travel would be limited to "travel suppliers" who meet specific criteria to become a ".travel" certified provider. IATA intends to evaluate the applicant's business fitness based on the submission of a comprehensive application that will include business plans and financial requirements.

IATA asserts that it is representative of an estimated 675,000 to 759,000 potential registrants. A number of public comments to the ICANN Public Comment Forum from members of the travel industry, however, object to IATA's application on grounds of representativeness. In answer to a question from ICANN, IATA asserts that since the date of its application it has been in communication with the travel industry to discuss its proposal for sponsorship of the .travel TLD and to seek consensus within the industry in support of its application. IATA states in its response that it has gained the support of the American Society of Travel Agents (ASTA), representing 26,000 travel agents primarily in the United States, and of the Universal Federation of Travel Agents' Associations (UFTAA), representing 48,000 travel agent members in 97 countries. IATA also cites other travel industry comments to the ICANN Public Comment Forum in support of its application. IATA represents that in its discussions with ASTA and UFTAA it has agreed to changes in its governance procedures to satisfy them that the procedures will result in representativeness to the broader travel industry. However, even after IATA's response was received, ICANN has continued to receive objections from travel agents and others.

During the period since the IATA's application was submitted it appears to have made progress toward gaining support of the some of the affected segments of the relevant communities, particularly from the two large associations representing travel agents. However, on the basis of the information provided, the evaluation team cannot conclude, at this juncture, that IATA has demonstrated that it is or would be broadly representative of the diverse global travel industry.

Stability

Since the .fin and .travel applications have not made an appropriate showing of representativeness, the evaluation team has focused on the .pro application of RegistryPro, Limited. The evaluation team initially concluded that, as a threshold matter, RegistryPro's proposal provided for stable operation of the proposed TLD. As the evaluation team reviewed RegistryPro's pro forma financial statements in more detail, however, some stability concerns appeared. The application identified an approximately $7 million cash shortfall in the first year that was not fully committed. In answer to a question posed by ICANN about the shortfall, the joint venture partners of RegistryPro stated that the partners have sufficient internal funds to meet the shortfall of RegistryPro, but have not fully committed to provide those funds to RegistryPro. Further, the partners failed to specify details for any external funding. A poorly managed or failed large, global, modestly restricted registry could have significant negative commercial or other consequences, including effects on stability. In the evaluation team's judgment, RegistryPro's apparent significant and uncommitted cash shortfall and its unwillingness to commit to provide funds to meet projected shortfalls, coupled with doubts about RegistryPro's assumptions regarding adoption by its target market (see below), leaves unresolved concern about the stability of the proposed registry.

Meeting Unmet Needs, Proof of Concept and Enhancement of Competition

Evaluation of whether proposals for a .pro TLD would meet unmet needs, provide an effective proof of concept and enhance competition for registration services encompasses several inquiries, including whether the proposed TLD and registry are likely to be attractive to a significant market segment in which it can compete effectively, whether distinctive services are being proposed that will meet the needs of those not being served adequately by existing services, the adequacy of marketing and promotion plans, the competitiveness of proposed services, pricing and service levels with other TLDs and operators that currently have significant market positions, and restrictions on accredited registrars.

In order to conclude that it is likely to be able to identify and meet a significant market demand in which it can meet unmet needs and provide an effective proof of concept, RegistryPro must realistically assess the business, financial, technical, operational, and marketing requirements for implementing the proposal and procure firm commitments for necessary resources. Some of the significant factors in this portion of the evaluation are summarized in the following table:

Applicant

Expected Cumulative Number of Registrations
(Year 4)

Capital Investment

Registry Operator's Marketing Budget
(Year 1 - 4)

Number of Registry Operator Employees
(Year 4)
RegistryPro, Ltd.

4.3M

$10.0M (committed)

$36.1M

27

RegistryPro defines its target market as all professionals worldwide, which it estimates at 29.5 million. RegistryPro states that it will initially limit its marketing activities to the 6.8 million doctors, lawyers, and accountants in the United States, the United Kingdom and Japan. However, the evaluation team has significant doubts about RegistryPro's assumption regarding adoption of the .pro TLD by the target market. Many of the professionals targeted by RegistryPro are practicing in large firms or corporations and may not be interested in participating in an offering targeting professionals. For example, many CPAs are not practicing public accountants but rather professionals within corporations and will not have a need for this service. Forty-one percent of RegistryPro's target market are CPAs. These factors may cause slower and lower adoption. In addition, as discussed above, an approximately $7 million cash shortfall in the first year has not been fully covered by commitments. RegistryPro's response raises a question whether the partners of RegistryPro are willing to devote more than the stated committed resources to operate a large TLD.

Technically, in the judgment of the technical team, RegistryPro presented a solid proposal that covers all aspects of its proposed implementation. The technical team concluded that the proposed plan provides good detail on how RegistryPro will achieve the capacity, availability and performance results shown above, its security plan is carefully considered, and the proposed technical plan supports the proposed business plan.

Another relevant factor is enhanced service content, particularly with respect to the registry interface protocol as discussed in Part III.B.1.a. RegistryPro offers a "thick" registry service. The information to be registered includes basic registrant information, administrative and technical contact point, qualifications to register a name in the .pro domain, and trademark information. RegistryPro states that the registrar-registry protocol to be used will be determined at a future date, but is likely to be XML-based.

Other relevant factors in the evaluation include proposed pricing and service levels, and the likelihood that they will be competitive with other TLDs and operators serving that market segment today. The following table summarizes RegistryPro's proposed pricing and service levels:

Applicant

Price

Availability

Time to Confirm

Time to Reliance

Capacity
RegistryPro, Ltd.

$6.00 per year

99.99%

500 msec

Instant

2000 tps

The proposed pricing by RegistryPro, Ltd. is the same as Verisign's current price of $6.00 per year. The service levels outlined above are consistent with those of a high quality registry.

Another competitive issue considered in evaluating the proposals is whether the proposals restrict the ability of accredited registrars to offer registration services within the TLD. RegistryPro does not impose restrictions on accredited registrars.

Enhancement of Diversity

Enhancement of diversity is another of the August 15 Criteria relevant to analysis of the proposal. RegistryPro is located in Dublin, Ireland and would enhance diversity of geographic location of operators of large TLDs. RegistryPro's outsource partner, Baltimore Technologies, is a private limited company organized under the laws of Great Britain. RegistryPro proposes a subscription-based revenue model.

Enhancement of Utility of the DNS

Enhancement of the utility of the DNS is another of the August 15 Criteria. RegistryPro's application appears to sensibly add to existing DNS hierarchy, does not appear to create or add confusion to the existing DNS hierarchy, and is semantically far from existing TLDs to avoid confusion.

Protection of Rights of Others

Protection of the rights of others is another August 15 Criteria relevant to this group. Registry Pro's application provides a limited sunrise period for trademark and service mark holders to register on a first-come, first-served basis. Initially, the TLD will be divided into sub-domains of .cpa, .med and .law to further limit abusive registration practices. Dispute resolution is addressed through the UDRP. Whois service is operated at the registry level and updated on a real time basis. The TLD is restricted to professionals and requires proof of professional qualification to register.

As a whole, Registry Pro relies on its registration processes and restrictions to minimize the potential for registration abuses. If Registry Pro is accepted, the evaluation team recommends that further clarification and direction be required.

Recommendation

Most proposals in this group are not technically suited, or do not have sufficiently representative sponsors, to merit selection. An exception is the technically impressive RegistryPro proposal, but RegistryPro's unwillingness to commit the necessary resources to the stable, long-term operation of that registry, coupled with the uncertain business case for the registry, counsel against selection of that proposal on the circumstances that have been submitted.


Comments concerning the layout, construction and functionality of this site
should be sent to webmaster@icann.org.

Page Updated 09-November-2000
(c) 2000  The Internet Corporation for Assigned Names and Numbers. All rights reserved.