SRS Implementation Discussion Paper 26/06/01

The purpose of this paper is to outline the functions for the office of the ccTLD manager, options for structural arrangements and ISOCNZ's relationship with this office.

Comments should be sent to rose.percival@isocnz.org.nz.

The Internet Society of New Zealand is committed to establishing a Shared Registry System for the registration and management of .nz domain names. The SRS Implementation Oversight Committee will oversee this project.

1 Background

One of the recommendations of the Hine Report was:

" ISOCNZ should accurately define the role of the ccTLD manager and establish the office of "ccTLD manager" with adequate resource to develop, promulgate and administer policy; to negotiate and manage contracts; and to administer the resolution of disputes. This office should be paid for by the internet community." (Recommendation 7)

This paper outlines the functions for the office of the ccTLD manager, options for structural arrangements and for ISOCNZ's relationship with this office.

An outline of the current responsibilities for the management of the .nz ccTLD are outlined in Appendix I.

2 Guiding Principles

The guiding principles for the SRS establishment are:

• To ensure that the register, as a monopoly provider, is operated in a responsible (technical, legal and fiscal) manner.
• The structural arrangements need to facilitate the achievement of these principles.

Criteria against which the various options can be assessed include:

• Unambiguous accountabilities for each entity
• Clear identification of their core customers
• Effective risk management
• Cost effective operations
• Grouping of like functions together

3 ISOCNZ

ISOCNZ is the holder of the delegation for the management of the .nz name space and ultimately responsible to the New Zealand public and the international internet community for the sound operation of the DNS within New Zealand. In effect, ISOCNZ is the New Zealand ccTLD manager, but has contracted out the registry operations to a fully owned company.

The following functions fall within the oversight role:

• approval of policies
• monitoring the performance of the ccTLD management
• monitoring of and influencing international developments in relation to the management of the DNS, in so far as they may impact on the .nz domain name space.

Approval of policies - the current set of policies relating to the management of the DNS will need to be revised to reflect the SRS environment, and any gaps identified and filled. Once the SRS is operational (and given that the DNS has been operational for some years now), the policy approval function should be limited.

Monitoring the performance of the management of the ccTLD/registry - in establishing the SRS, there needs to be a clear hierarchy of consistent performance standards set that flow from the monitoring of the office of the ccTLD manager through to the registry, through to the requirements of registrars. These performance standards form the basis of the reporting at regular intervals. Any issues that require attention in between reporting periods would be by exception only. The focus should be on the quality/substance of the reporting, rather than the frequency. A monthly "no useful information/I'll tell you what I want you to hear" report is unhelpful and wastes time. It is better to have a more substantive, targeted report at less frequent intervals.

Monitoring of international developments - this involves monitoring of and participation in international events as it relates to the management of the .nz domain name space.

Given that the IANA delegation is to ISOCNZ, there is a requirement for active oversight by ISOCNZ of the DNS within New Zealand, essentially monitoring the performance of the ccTLD and the registry. This can either remain with the full Council or be delegated to a standing committee.

Full Council

The full Council is involved in all the functions related to the management of .nz. The Council would receive and review the reports from the ccTLD manager, debate and approve DNS policy, and becomes involved in debating and approving relationship/contractual changes.

Benefits

• Wider perspective of interests is heard in the debates on issues

Disadvantages/Risks

• There are likely to be Council members who are registrars (or with a business interest in a registrar/the register) and therefore have a conflict of interest.
• The Council is a large body to achieve effective oversight - it is prone to factionalism which can impact on both effective and sound decision making. Please note that this is common to all not-for-profit organisations with large elected councils.
• DNS issues overawe other initiatives of the ISOCNZ.
• The focus on international events (and attendance at these) overawe the oversight of the .nz DNS

ccTLD Standing Committee

Standing committees can perform a valuable role in progressing business in an efficient and effective manner. Being a smaller group, there is the capacity to go into greater detail and deal with issues more comprehensively than the full Council. A standing committee will however only be effective where the members are suitably selected. The membership of the Standing Committee can be wider than the Council members, and there may be benefit in considering membership outside ISOCNZ where the Society was unable to find suitable people from within the Society. Given the nature of the oversight role, you would want to ensure that there was a mixture of business and technical skills.

In this scenario, the monitoring of the performance of the ccTLD and registry is delegated to a standing committee. Substantive issues would be taken back to the full Council but it would be the standing committee that meets with the ccTLD manager, and determines whether there are issues to be followed up/further monitoring required.

Benefits

• Sharper focus/quicker decision making
• Enables ISOCNZ Council to focus more effectively on non ccTLD issues
• Lower risk of politicization of DNS issues
• Opportunity to bring in experience from outside the Council membership

Disadvantages/Risks

• Council delegates process but members relitigate the detail, undermining the role of the standing committee and its members and reducing its effectiveness.

4 Office of the ccTLD Manager

The office of the ccTLD manager is responsible for setting the policy and for ensuring the correct and efficient operation of the DNS within New Zealand.

This involves eight key functions:

• Maintaining the policy for .nz domain name management. This includes recommending changes to existing policies/new policies and setting the pricing policy for domain names on the .nz register.
• Contracting for registry services.
• Establishing and maintaining contracts with registrars
• Running the process for the creation of new second level domain names and appointing moderators for moderated second level domains
• Facilitating effective decision-making/information flows amongst key stakeholders through running/servicing the Registry-Registrar Standing Committee
• Monitoring of and influencing international developments in relation to the management of the DNS, in so far as they may impact on the .nz domain name space.
• Ensuring the .nz name space is future proofed (technical rather than business-oriented)
• Facilitating the disputes resolution procedures (to be determined)

Maintaining the policy - this should not be a substantive part of the role. The current set of policies relating to the management of the DNS will need to be revised prior to the SRS goes live to reflect the SRS environment, and any gaps identified and filled. Once the SRS is operational (and given that the DNS has been operational for some years now), the policy function should be limited. One regular/annual activity will be the reviewing the registry fee levels.

Contracting for registry services - this assumes that the registry is in a separate entity to the office of the ccTLD manager. This role involves establishing and monitoring the contract, identifying and recommending enhancements to the contract, and maintaining a positive working relationship with the registry. This is an ongoing and substantive role.

Establishing and maintaining contracts with registrars - this includes the assessment of applications from potential registrars, completing the contractual documentation with registrars, notifying the registry of approvals, monitoring registrars (requires information from the registry), receiving and investigating complaints about registrars, and de-approving registrars (following due process) who fail to maintain the standards required for approval. This would also include approving the registry contacting registrants directly where a registrar fails. This will be a substantive part of the role.

Running the process for the creation of new second level domain names and appointing moderators for moderated second level domains - an irregular activity but running the process as required. Includes reviewing the credentials of the moderators, and monitoring the moderation process etc.

Running/servicing the Registry-Registrar Standing Committee - this is an ongoing role and will be critical to the successful operation of the SRS. Registrar ownership is provided through this committee and it should provide an intelligent and focused forum for discussing issues that affect all/many registrars, to discuss future enhancements to the registry software etc. It should be well managed, tightly focused and output/outcome oriented. It will provide a valuable sounding board for the ccTLD manager to receive feedback on issues. The Chair of the ccTLD Standing Committee could be a member (not sure if this is a good idea or not??).

Monitoring of and influencing international developments in relation to the management of the DNS, in so far as they may impact on the .nz domain name space - there is likely to be greater transparency around this function if it is an explicit accountability of the ccTLD manager. The Standing Committee would set the goals/objectives for international activity (in relation to the .nz ccTLD) for the year and in conjunction with the ccTLD manager, identify the most appropriate attendee(s). Their attendance would be funded from the office of the ccTLD manager (i.e. the funding for the international activity in relation to management of the .nz ccTLD would be held by the ccTLD manager rather than ISOCNZ). The expectation would be that members of the Standing Committee would not be the NZ reps attending the international activities.

Ensuring the .nz name space is future proofed (technical rather than business-oriented) - would suggest this is a watching brief with perhaps an annual assessment obtained???? There needs to be a visible output of this activity otherwise it could waste a lot of time and be unfocused.

Facilitating the disputes resolution procedures - this role has yet to be determined but the office may end up being the first contact point for those with a potential dispute relating to domain names. This will provide valuable information on the operation of registrars and the competitiveness of the registrar market.

4.2 Location/structural options

There should be a healthy tension between the policy (ccTLD Manager) and the operational parts (the registry) of .nz. This does not necessarily mean that they need to be two separate organisations, but if these functions are within one organisation, then there needs to be a coherent and sound decision making process/authority that can take decisions that balance the policy/operational interests.

There are four main options for this Office. These include:

• remain as part of the ISOCNZ Secretariat, reporting through the Executive Director to the ISOCNZ Council/sub-committee
• remain as part of the ISOCNZ Secretariat, but reporting directly to the ISOCNZ Council/sub-committee
• establish a separate organisation
• combining the functions with the registry

The appointee to the position of ccTLD manager should be independent of ISOCNZ (i.e. - not be a current member of the Society) as this would be a conflict of interest.

The ccTLD manager would either by an employee or contractor whose day to day reporting lines are through the Executive Director.

Administrative servicing would be provided by the ISOCNZ Administrative and the ccTLD manager would be located within the ISOCNZ Office. The resourcing requirements will be determined once the functions for the Office are confirmed.

Benefits

• Streaming of relevant ISOCNZ issues through one position (the Executive Director)
• More efficient as it makes better use of ISOCNZ secretariat staff and the investment in the accommodation

• Executive Director's effort is deflected from other substantive issues
• The lower status of the position may reduce the pool of potential applicants.
• Substantive change to the Executive Director's role which may necessitate a reassessment of this position and its requirements.
• Potential filtering by the Executive Director of issues
• Adds a layer of management with little tangible benefit

The ccTLD manager would either by an employee or contractor whose day to day reporting lines are to the chair of the Council/standing committee.

Administrative servicing would be provided by the ISOCNZ Administrative Manager and the ccTLD manager would be located within the ISOCNZ Office. The resourcing requirements will be determined once the functions for the Office are confirmed.

Benefits

• May be more attractive to potential applicants
• More efficient as it makes better use of ISOCNZ secretariat staff and the investment in the accommodation

Disadvantages/Risks

• ccTLD manager does not receive adequate support/direction from a volunteer council/standing committee/is not managed

In this scenario, the office of the ccTLD manager is established as a separate organisation, which could be another incorporated society, trust or company. ISOCNZ would contract with this organisation, (similar to the NZIRL situation but with better reporting procedures in place) to undertake certain responsibilities. Decisions on policy issues would remain with ISOCNZ. The Council/trustees/board of the organisation then employ/contract someone to undertake the responsibilities. The organisation would report to the ISOCNZ as required on the operation of the .nz domain namespace.

Benefits

• Organisation has a single focus which should ensure better oversight of the .nz namespace.
• Removes the management of the .nz domain namespace from the direct control of ISOCNZ, enabling it to concentrate on other objectives

Disadvantages/Risks

• Adds complexity to the management of .nz through adding another layer of structure/management and costs to the management of the .nz domain namespace
• Removes the management of the .nz domain namespace from the direct control of ISOCNZ to an extent that it effectively loses control of management of its delegation
• Government may become more interested in playing a direct role in .nz if it is managed by an independent third party (one could argue that ISOCNZ is that but it is probably viewed as a relatively safe/"harmless" third party)

Possible Structure Options

Incorporated society

Not suitable as it is required to have a minimum of 15 members (less if some of these are corporate bodies) who would be entitled to have an independent view on the management of ccTLD.

IANA may consider that the delegation should be held directly by the new body.

Trust

A trust is effectively an instruction attaching to property owned by trustees. I find it difficult to see how the trust would be established/operate for the office of the ccTLD manager (any thoughts?)

Company

A more suitable structure for a commercially productive enterprise than a "regulatory/oversight" organisation. It has a very limited direct revenue stream (if there is to be a charge for registrars to be "authorised" by the ccTLD manager) with its remaining revenue coming from the organisation it is monitoring.

4.2.4 Combining the Functions with the Registry

In the model, the ccTLD manager and the registry would be one entity. This arrangement appears to function effectively in some countries (UK, Canada). However this model effectively recreates Domainz, except with the addition of competitive registrars.

Benefits

• Organisation has a single focus
• Removes the management of the .nz domain namespace from the direct control of ISOCNZ, enabling it to concentrate on other objectives

• Means that the ISOCNZ Secretariat will have to be active in monitoring the performance of the monopoly registry.
• Harder to safeguard registrant's rights
• Recreates the Domainz situation.
• Removes the management of the .nz domain namespace from the direct control of ISOCNZ to an extent that it effectively loses control of management of its delegation

Government may become more interested in playing a direct role in .nz if it is managed by an independent third party (one could argue that ISOCNZ is that but it is probably viewed as a relatively safe/"harmless" third party)

A company would be the preferred option if the office of the ccTLD manager was combined with the registry operation.

This Office would have

• Have unambiguous accountabilities and a clear operating mandate
• Have a critical mass of functions
• Enable an effective operational separation of .nz issues from the day to day workings of the ISOCNZ Secretariat and Council.

Appendix I

An Outline of Current Responsibilities for the Management of .nz Domain Names

Internet Society of New Zealand Inc

• Incorporated society
• Has the delegated responsibility for the management of the New Zealand (.nz) domain name space, in line with IANA policy documents)
• Is responsible for the adaptation of IANA policies and the development of local policy for the .nz domain space in consultation with stakeholders
• Is the sole shareholder in The New Zealand Internet Registry Ltd (trading as Domainz), which it established to manage the .nz domain name space in line with policy
• Monitors the performance of Domainz in implementing ISOCNZ's published policies

The New Zealand Internet Registry Ltd - Domainz

• A company
• Is responsible to ISOCNZ for
• "Providing a cost-effective service in administering the registration of domain names and the ongoing management of the Domain Name System
• "Providing a robust operational infrastructure for the resolution of domain names; and
• "As far as is consistent with ISOCNZ policy, co-operate with others involved in promoting, administering and using the Internet".
• Delegates responsibility to Name Holders (the 3rd level domain manager) to ensure that each name is managed in line with all ISOCNZ and Domainz published policies
• Works with a variety of agents each providing "value added" domain name services in line with published policies

ISOCNZ Management Agreement and Delegation of .nz, September 1997

• There has been dissatisfaction about the relationship with NZIRL. The relationship is governed by an agreement dated 30 September 1997 (5 months after NZIRL was formed) between ISOCNZ and NZIRL, appointing NZIRL to administer the .nz domain name in accordance with the policy instructions and management authority given to NZIRL by ISOCNZ.
• Schedule A (Agreed Performance Levels) was never completed. This schedule was to form the basis of the monthly reporting by NZIRL.
• The agreement provides for NZIRL to seek policy guidance from ISOCNZ through submitting a written request. ISOCNZ has two working days to acknowledge the request and to provide a substantive reply as soon as practicable.
• NZIRL is required to prepare a draft contract performance plan at the beginning of each financial year to submit to ISOCNZ.
• NZIRL was given the authority to recover appropriate charges from domain name holders for its services
• The agreement requires two years notice of termination in the ordinary course of events.