insight 

I’m always cynical when a management blog is silent on the current challenges facing a company, particularly when they are covered in the media.

We’ve had snow storms this week in the UK, so there is much talk about storms. It strikes me that some might view the current issues at Nominet as a storm in a teacup – a small event that has been exaggerated out of all proportion. Not unsurprisingly, I don’t agree. I think that the storm has already had a significant effect on Nominet and it could well have far reaching implications for both Nominet and our Registrars. I do hope (but I’m not sure) that all involved would agree that our current governance model and all that it entails needs to change in some way in order to reflect the role that we have and the environment that we operate in. The independent governance review is due soon, so we’re waiting to see how much change is recommended.

However, I believe that this is just a part of the bigger picture of the national and international Internet Governance debate, which is set to come to a head this year. If anything, Nominet represents one minor development in this area, which, I believe, is heading towards a perfect storm – a (far from perfect) combination of events, which will ultimately change the Internet landscape.

Let me attempt to explain…..as briefly as I can:

Firstly, I see the need for change being signalled in the regulatory climate in the UK. It is well known that the UK Government has been very supportive of self-regulation in our industry. However, I do hear statements about the representation of end-user interests and the protection of end-users much more frequently than ever before. As an industry, we often respond to these statements by saying “better user education and information is the answer”. Whilst that may well help, we are going to have to accept this may not be the only answer, or one that will fully deliver. So, its currently up to the UK internet industry to figure-out how we are going to ensure that end-users are at the heart of our self-regulatory regime, otherwise regulation or legislation is inevitable. For example, the recent Digital Britain report signals possible legislation compelling ISPs to notify infringers of third party rights, and keep anonymised data, which seems to indicate a view that self-regulation has failed on this point. If self-regulation is perceived to falter in the UK, which has championed an industry lead, we can expect that more interventionist governments (both within and outside the European Union) will capitalise on this, and may use it as an excuse for heavy regulation.

Secondly, I see change being signalled at the European level, with the EU review of the regulatory framework potentially giving member states the power to regulate the Internet, particularly around quality of service to end-users.

Thirdly, I see change being signalled by the US Government in its approach to Internet governance, particularly with the recent change in administration. There is also an end-user needs theme here and in the context of the new generic Top Level Domain (gTLD)  process, the US Department of Commerce recommends that ICANN should give greater consideration to consumer interests before creating new gTLDs and renewing registry agreements. I do have a lot of empathy with ICANN - like in Nominet, it must feel as though you just can’t please anyone at times. But with so many concerns being raised about the new gTLD process, I’d be surprised if the US is able to agree to the transition of ICANN to the private sector when the Joint Project Agreement expires later this year. Although there remains much support for removing the ‘oversight’ of ICANN from one single government, there is little consensus on what oversight should replace that of the US. I predict that some governments will therefore push even more strongly for inter-governmental oversight of ICANN.

Finally, we are coming to a crucial stage in the life of the Internet Governance Forum (IGF). The review of the forum has already begun and is due to report in early 2010. We view this five-year experiment in global multi-stakeholder dialogue as being very successful. The UK IGF and the Nominet Best Practice challenge have helped to ensure that the UK has great involvement in the IGF and that there are real life contributions to inform the policy debate. Whilst some would have liked the IGF to be a negotiating and decision making process, it has worked well as a space for the development of policy dialogue and the sharing of best practices. What seems to have escaped many is that this form of engagement is an innovative experiment for the UN, in that it seeks to engage all regions and all participants in policy dialogue. If that experiment is not seen to be working, there will be suggestions for alternative replacements.

I do think that there is an urgent need for greater awareness of the international issues facing the industry if we’re to avoid the storms, together with a more widespread commitment to developing both understanding and innovative solutions.

Where can we start? Well, we will all need to accept greater responsibility for finding solutions going forwards. This will require much better participation and engagement from all involved. There also remains a huge need for better dialogue, better participation, better understanding and better solutions in the interests of end-users. All too often I hear people talking to each other, but not actually listening. I also see vested interest battle-lines being drawn, without the acknowledgement that real progress will need real compromise and new ways of moving forward. This would be a good basis on which to start preventing new storms, whether they are small or large, from developing.

I wrote previously about the discussions starting on establishing trading markets as a way of dealing with the impending exhaustion of IPv4 addresses.  Well things have now moved on a bit and we have a policy proposal being discussed (proposal 2008-07) at RIPE that is the first key step to enabling a market in the RIPE region to form.  It doesn’t mention money but it does allow for simple address transfer between registered holders of IP addresses.

To save you having to look it up, this the key text being added:

Any LIR is allowed to re-allocate complete or partial blocks of IPv4 address space that were previously allocated to them by either the RIPE NCC or the IANA. Such address space must not contain any block that is assigned to an End User.

Address space may only be re-allocated to another LIR that is also a member of the RIPE NCC. The block that is to be re-allocated must not be smaller than the minimum allocation block size at the time of re-allocation. Demonstration of need for the address space by the receiving LIR to the RIPE NCC is not required during transfers.

Re-allocation must be reflected in the RIPE Database. This re-allocation may be on either a permanent or non-permanent basis.

LIRs that receive a re-allocation from another LIR cannot re-allocate complete or partial blocks of the same address space to another LIR within 24 months of receiving the re-allocation.

The re-allocation will be notified to the RIPE NCC, who will record the change of allocation. Please note that the LIR always remains responsible for the entire allocation it receives from the RIPE NCC until the re-allocation is transferred to another LIR or returned. The LIR must ensure that all policies are applied.

Re-allocated blocks will be signed to establish the current allocation owner.

Re-allocated blocks are no different from the allocations made directly by the RIPE NCC and so they must be used by the receiving LIR according to the policies described in this document.

A number of people have expressed support for the proposal but not ETNO, the influential voice of the European Telecoms industry.  We are another refusenik, for similar reasons.  Rather then go through them again, here is the text of the objection I wrote to the working group:

I do not support this proposal for the following reasons:

* It breaks the policy of providing addresses to those who need them in a
fair and non-discriminatory fashion because it allows LIRs to choose who
gets spare addresses for arbitrary and secret reasons rather than through
the open and transparent process of the RIR.

* It is discriminatory to those LIRs in developing countries (within this
RIR region) who have fewer IPv4 addresses than other countries for
historic reasons and will now have to pay considerably more for addresses
by buying them from other LIRs.  This will only exacerbate an already
difficult global position where some countries are pushing for a change in
the global management of the Internet driven by a perception of exclusion.

* It is only a partial solution to the problem.  Many LIRs believe that
much more can be achieved by a determined and well implemented policy on
reclaim/reuse.  However this policy only addresses the potential transfer
solution to the problem, not the potential reclaim/reuse solution.
Furthermore, it is likely that this policy, if implemented before a proper
reclaim/reuse policy will render such a policy unachievable and
unworkable.

* It will create a landrush of false or exaggerated allocation requests
from people who wish to profit by arbitrage, leading to far faster
exhaustion of IPv4 addresses.  In other words there will now be a
significant difference in the price that IP addresses can be ‘bought’ from
RIPE NCC compared to that at which they can be sold on the open market.
This difference in price, the arbitrage opportunity, will lead to an
influx of speculators who will work out how to play the system and so lead
to many more addresses being allocated than otherwise.

* It takes RIPE NCC into the business of a regulator of a secondary
market, which is something it has no expertise in and brings considerable
risk.  RIPE NCC has to develop into this role because the nature of the
proposal requires policing to check transfers have happened within the
rules.  However, with the potential for transfers to have commercial and
financial implications there is far greater possibility of costly and
complex challenges to RIPE NCCs decisions.  This in turns brings with it
the risks of scrutiny from competition authorities.

* It will lead to rapid degradation of the IPv4 LIR database and loss of
control for RIPE NCC in the registration of IPv4 addresses.  If LIR A
sells a block of IPv4 addresses to LIR B then the legal ownership is
adequately covered by the contract that exists between the two and so
there is no incentive to register the transfer with RIPE NCC other than
when peering with people that make strict use the LIR database.  Rival
databases, based around IPv4 trading exchanges, will spring up.

There is still until 9th July left to comment on this proposal and given just how important it is then if you have strong views one way or the other then now is that time to let the working group know.

The Security and Stability Advisory Committee (SSAC) of ICANN have reported the results of their investigation into Domain Name Front Running (DNFR).  The conclusion, after a pretty thorough analysis, concurs with our findings that there are no provable cases of DNFR.  It also highlights the major issue that there is widespread confusion amongst registrants as to how the domain name industry works and their expectations are very different from reality.

One other very interesting part of the report is the figures given for the volumes of certain lookups done in the .com and .net.  For example in July 2007 there were 3.9 billion  WHOIS lookups for .com and .net !

Yesterday ICANN announced that they are proposing to remove their five-day ‘Add Grace Period’ which previously allowed registrars to rectify errors when registering new domain names without cost. Due to serial abuse of this facility by speculators testing the profitability of domain names through advertising revenues, ICANN will instead debit the payment as soon as the domain name is registered.

Although this change will clearly deter tasters from registering high volumes of domains speculatively, it will also make the process of registering less flexible for registrars. It remains to be seen exactly how the new process will work, but it is probably safe to assume that if the registrar has to pay these costs upfront they will ultimately be passed to their customers.

When we took steps against domain tasting in August 2006, we decided to introduce limits on the number of domains a registrar could delete. Our limit for deletions to rectify spelling errors etc is five domains or 5% of the total number of domains registered but not yet invoiced (whichever is higher) but the limit for practices such as domain tasting is zero, and the limits form part of our registrar agreement, the formal contract that all our registrars sign up to. We believe this solution is neater, as it effectively counters the practice of domain tasting but at the same time allows some flexibility for registrars where genuine errors have occurred.

In a separate move, Google announced last week that they will start to monitor domain names that are repeatedly registered and dropped within the current five-day grace period, and exclude them from their AdSense program. Such a move would clearly strike at the heart of the problem. If tasters stop receiving revenues for pay-per-click ads associated with the domains they are testing, they will soon stop trying.

Both proposals have their merits, and it is encouraging to see that concerted efforts are being made from various sectors within the industry that could herald the beginning of the end of this practice.

We’ve just released a position paper on signing the root. There is quite a lot to this but I thought I would attempt to summarise the paper for those of you who don’t want to read the full seven pages.

Read more

I see that there have been a few stories in the press regarding ICANN investigating the practice of registering a domain name based on the search someone has done on that domain name. As far as we are aware this practice is not widespread in the UK. Read more

This is just a quick reminder that Nominet’s second consultation on corporate governance closes next Wednesday, 31 October. We currently have had only 16 responses. If you have any comments you would like to make about the proposals please do let us know by completing the questionnaire or emailing us governanceconsultation@nominet.org.uk.

On Thursday we held an interactive workshop about the key issues on Internet governance from a UK perspective. It was a surprisingly well-attended and really productive session. Several key messages emerged from the discussions which we will now be sharing alongside several examples of best practice in Internet governance from the UK at the next IGF in Rio in November. Read more

I noticed with interest that NASK, the .pl Polish registry has made an announcement regarding a domain name tasting service. Read more