IANA Report on Redelegation of the .org Top-Level Domain
(9 December 2002)

IANA Report

Subject: Redelegation of the .org Top-Level Domain
Date: 9 December 2002

The Internet Assigned Numbers Authority (the IANA) is responsible for various administrative functions associated with management of the Internet's domain-name system root zone, including reviewing the appropriateness of contemplated changes to the content of the root zone and preparing reports on those changes. This report gives the findings and conclusions of the IANA on the redelegation of the .org top-level domain (TLD) from operation by VeriSign, Inc., to operation by Public Interest Registry.

Factual and Procedural Background

A. Background of the .org TLD

The Internet domain-name system (DNS) was deployed under the guidance of Jon Postel in 1984 and 1985 (see RFC 921) as a distributed database for information about resources on the Internet, replacing the prior "hosts.txt" system. The DNS contains resource records that map easy-to-remember domain names to the unique numeric addresses assigned to every computer on the Internet.

The DNS is organized hierarchically with several TLDs containing second-level domains (SLDs), which in turn contain third-level domains (3LDs), etc. A domain name consists of a series of labels, separated by dots, tracing the hierarchy from the top-level domain down to the specific computer being identified: <3LD>.<SLD>.<TLD>. Thus, the domain name "www.icann.org" is within the "www" third-level domain of the "icann" second-level domain of the "org" top-level domain.

As initially deployed, the DNS included both generic top-level domains (gTLDs) and country-code top-level domains (ccTLDs). In RFC 920, entitled "Domain Requirements" (Oct. 1984), Dr. Postel and Joyce Reynolds proposed a set of initial gTLDs including "com" (commercial), "edu" (education), "gov" (government), "mil" (military), and "org" (organization)." By the time of actual implementation of the top-level domains in January 1985, an additional top-level domain named "net" was included.

From the deployment of the DNS until the end of 1992, the gTLDs were managed by SRI International's Network Information Center (SRI-NIC). Beginning in 1993, the registration function within gTLDs was assumed by Network Solutions, Inc. (NSI), under Cooperative Agreement NCR 92-18742 with the National Science Foundation.

That cooperative agreement was originally scheduled to conclude on 30 September 1998. In June 1998, however, the U.S. Department of Commerce (which took over from the National Science Foundation as the responsible U.S. Government agency) issued a Statement of Policy commonly known as the "White Paper" ("Management of Internet Names and Addresses," 63 Fed. Reg. 31741 (1998)), in which it announced its intention to transition responsibilities for management of the domain name space to a private, not-for-profit corporation (now known as the Internet Corporation for Assigned Names and Numbers, or "ICANN") formed by the Internet community. In connection with the implementation of the White Paper, the NSI-U.S. Government cooperative agreement was extended in October 1998 (by Amendment 11) until 30 September 2000. In 1999, NSI and ICANN reached an agreement that supplemented the cooperative agreement with an ICANN-NSI registry agreement, under which NSI's operatorship of the .com, .net, and .org gTLDs was extended to 10 November 2003 or, if certain conditions were met, 10 November 2007. At the same time, NSI and the U.S. Department of Commerce amended the cooperative agreement to extend for the same period. (Amendment 19 to Cooperative Agreement NCR 92-18742, section I(B)(10).)

In May 2001, the ICANN-NSI registry agreement covering .com, .net, and .org, was replaced with three registry agreements, which separately covered (and had different termination provisions for) the three gTLDs.¹ The registry agreement for .org provided that VeriSign, Inc. (which had acquired NSI) would give up the operatorship of the .org registry on 31 December 2002,² after which a successor registry operator designated by ICANN would assume responsibility for the operation of .org.

B. Process for Selection of a Successor Operator of the .org TLD

At its 4 June 2001 meeting in Stockholm, Sweden, the ICANN Board of Directors referred the issues raised by the scheduled transition of the operation of the .org gTLD to ICANN's Domain Name Supporting Organization (DNSO) Names Council. The Names Council, in turn, formed a working group, which submitted a report that the Names Council unanimously adopted at a meeting on 17 January 2002. The report was posted on the ICANN web site for public comment, and an in-person Public Forum was held on the topic on 13 March 2002 at ICANN's meeting in Accra, Ghana.

At the ICANN Board's meeting on 14 March 2002, the Board authorized the solicitation of proposals to succeed VeriSign as the operator of the .org registry. ICANN then posted, in draft form, a request for proposals, which included the following elements:

• application instructions;
• an application transmittal form;
• a proposal form (with detailed questions to be answered in proposals);
• a fitness disclosure for applicants;
• a form for requesting confidential treatment of submitted materials;
• a statement of criteria for assessing proposals; and
• a draft registry agreement that the selected successor would be expected to enter.

After a two-week comment period, these materials were revised based on the comments received. The final request for proposals was posted on 20 May 2002. In addition, ICANN solicited written questions from prospective bidders, and on 24 May 2002 posted 46 detailed answers to the questions received.

Eleven proposals were received by the 18 June 2002 deadline in response to the request for proposals. Each of these proposals was posted on the ICANN web site, and public comments were invited.³ A special ICANN Public Forum was held on the evening of 26 June 2002 in conjunction with ICANN's meeting in Bucharest, Romania, where each bidder made a presentation to the ICANN Board and community on its proposal, and a dialogue was held with members of the community, the Board, and the bidders.⁴

Over the next three months, four teams designated by ICANN evaluated the applications under the eleven criteria that had been posted as part of the request for proposals. The four teams, which focused on different aspects, were:

• Gartner, Inc. performed a detailed evaluation of the technical aspects of the eleven proposals;
• A team of Chief Information Officers of academic institutions in the United States, Mexico, and Australia also did a technical evaluation, which was more summary than the Gartner analysis and served as a validator of it;
• A team of participants in the DNSO Non-Commercial Domain Name Holders Constituency did an evaluation of the proposals under three of the stated criteria, involving proposed measures to differentiate of the .org TLD, responsiveness to the needs of the noncommercial Internet community, and level of support from .org registrants and the non-commercial community; and
• The ICANN General Counsel evaluated how well the proposals met certain legal considerations.

Each of these teams based its evaluation on the written proposals, the presentations at the Bucharest Public Forum, and public comments received on the proposals through ICANN's online comment mechanisms. In addition, the evaluators were assisted by the applicants' responses to fourteen questions that were posed to clarify various aspects of the proposals.

On 19 August 2002, a draft evaluation report, which detailed and combined the analyses of each of the evaluation teams, was posted on ICANN's web site. This draft report recommended the following three proposals, in order of preference: (1) PIR (a not-for-profit organization proposed to be formed by the Internet Society, (2) NeuStar, Inc. (a for-profit company), and (3) Global Name Registry (a for-profit company). Public and applicant comments were invited on the draft evaluation report, and many were received.⁵ These comments pointed out several areas in which the evaluation could be enhanced; these comments were addressed and a final evaluation report was issued on 23 September 2002. The final evaluation report included an overall "staff evaluation report" and supporting reports prepared by Gartner, Inc., the Non-Commercial Domain Name Holders Constituency team, and the ICANN General Counsel. Although the final evaluation report reflected revisions to several aspects of the evaluation based on the comments received, the recommended preferences for selection of (1) PIR, (2) NeuStar, and (3) Global Name Registry were reaffirmed by the analysis.

Further comments from the applicants and the public were invited on the final evaluation report, before its consideration by the ICANN Board. Eight of the eleven bidders chose to submit written summations for consideration by the Board. These were posted on the ICANN web site.

On 14 October 2002, the ICANN Board met to consider the proposals in view of the extensive public and applicant comment, as well as the evaluation reports by the various evaluation teams. At that meeting, it selected PIR as the first-choice successor, and authorized the ICANN President and General Counsel to "negotiate a registry agreement with PIR consistent with the model .org Registry Agreement posted as part of the final Request for Proposals, supplemented as appropriate according to the proposal submitted by the Internet Society."⁶

C. Negotiation of the ICANN-PIR Agreement

The .org Registry Agreement was negotiated over the next ten days. On 24 October 2002, the fully negotiated agreement was posted on the ICANN web site. In line with ICANN's usual practice, ICANN Board members were afforded seven days in which to raise objections to the agreements based on policy considerations; no such objections were raised. On 26 November 2002, the U.S. Department of Commerce approved PIR as successor registry under Amendment 3 of its Memorandum of Understanding with ICANN. The ICANN and PIR formally entered the .org Registry Agreement on 2 December 2002.

Evaluation

This report is being provided under the 21 March 2001 contact for performance of the IANA function between the United States Government and the Internet Corporation for Assigned Names and Numbers. Under that contract, the IANA is responsible for various functions, known as the "IANA functions", associated with the management of the root zone of the Internet domain-name system.

The overall purpose of changing operators of the .org registry is to enhance diversity of providers in the provision of registry services. This purpose, however, must be accomplished in a way that preserves the security and stability of the domain-name system. It should also be accomplished in a way so that .org is operated in a manner that reflects the particular needs of present .org registrants and the other entities within the non-commercial sector for which the .org top-level domain was established.

Because the .org TLD registry presently serves over 2,600,000 second-level domains, ICANN placed primary emphasis on stability in evaluating the proposals. Indeed, the first criterion for the selection was stability:

1. Need to preserve a stable, well-functioning .org registry.

ICANN's first priority is to preserve the stability of the Internet, including the domain-name system (DNS). Inasmuch as the .org TLD presently contains over 2,700,000 second-level domains, a principal consideration will be ICANN's level of confidence that a particular proposal will result in technically sound, high-quality services that meet the needs of .org registrants.

Proposals should include specific plans, backed by ample, firmly committed resources, as to how the proposed operator intends to operate the .org TLD in a stable and technically competent manner. . . . In evaluating proposals, ICANN will place significant emphasis on the demonstrated ability of the applicant or a member of the proposing team to operate a TLD registry of significant scale in a manner that provides affordable services with a high degree of service responsiveness and reliability.

Reassignment of .org Top-Level Domain: Criteria for Assessing Proposals (20 May 2002).

This emphasis on stability was reflected throughout the evaluation process and the Board's selection. After a twenty-five day transition period, PIR will provide registration services through an outsourcing arrangement with Afilias, which as the registry operator for .info has experience in serving as registry operator for over 1,000,000 second-level domains. The technical evaluation teams both evaluated the Internet Society/PIR proposal as being within the top tier in terms of stability and other technical factors.

The evaluation considered not only the demonstrated the technical stability provided by Afilias, but also the organizational characteristics of PIR. PIR is a not-for-profit corporation organized under Pennsylvania law to serve as the .org registry operator. Its sole member is the Internet Society, which appoints its Board. The Internet Society was formed in 1992 and is a professional membership society with more than 150 organizational and 11,000 individual members in over 182 countries. Thus, the Internet Society is a long-established organization that is particularly knowledgeable about the needs of the organizations for which the .org top-level domain was intended. By establishing PIR as a subsidiary to serve as the successor operator of .org, the Internet Society has created a structure that can operate the .org TLD in a manner that will be sensitive to the needs of its intended users while allowing PIR to focus on the operation of .org by insulating it from the possibly distracting effects of pursuing the Internet Society's broader mission.

Under the arrangements put in place by the Internet Society, Afilias will provide start-up funding for PIR, after which PIR will receive one-third of the revenues from operation of the registry. These arrangements should provide PIR the financial resources necessary for it to operate in a financially stable manner. In addition, the presence of Afilias as a back-end provider provides assurance of continued stable operation of the .org registry.

The negotiated .org registry agreement reinforces the overriding emphasis on technical stability. It is modeled on the registry agreements ICANN has entered for the four unsponsored TLDs (.biz, .info, .name, and .pro) that have been introduced in 2001 and 2002. The agreement's features designed to ensure that the continued stability of the .org TLD include functional and performance specifications, data escrow requirements, and a detailed transition plan (including contingency scenarios) that are designed to ensure that .org customers and Internet users do not experience failures or disruptions as a result of the reassignment of the .org registry.

The reassignment of the .org registry from VeriSign to PIR will also meet the goal of enhancing diversity in the provision of gTLD registry services. Based on 1 July 2002 registration data, the top four providers of registry services for commercial gTLDs⁷ currently are:

With the reassignment of .org to Public Interest Registry, under which Afilias will provide the back-end technical services, the providers' shares will be adjusted as follows (again, based on 1 July 2002 data):

These figures indicate that the reassignment or the .org registry from VeriSign to PIR (with Afilias as a back-end provider) will materially increase diversity among gTLD providers, although concentration remains quite high.⁸

The enhanced diversity of back-end providers also provides enhanced features for the .org registry services. Among the enhanced .org features will be much quicker DNS and Whois update times (15 minutes maximum) than presently provided (12 hours maximum), as well as a variety of no-cost and low-cost ancillary registry services.

Transition Plan

To help ensure a stable transition, PIR has contracted with VeriSign, Inc., to provide temporary back-end support for the .org registry beginning on 1 January 2003. This will permit a phased transition, during which the existing .org registrars that have completed contractual and other arrangements with PIR will continue submitting registry updates to VeriSign's registry system until 25 January 2003, in exactly the same technical manner as they do at present. Effective 25 January 2003, VeriSign will cease accepting .org updates from registrars and this function will be taken over by the new back-end provider, Afilias. The Afilias system will initially use the same protocol as presently used. Later in 2003, registrars will begin a migration from the current RRP protocol to the more-fully-featured EPP protocol, and will convert from the current thin registry model to a thick registry model. These migrations, as well as extensive contingency plans, are described in detail in PIR's Transition Plan. These plans are technically conservative and should lead to a stable transition to the new registry.

Conclusion

Based on the foregoing factors, the .org registry should be reassigned from VeriSign to Public Interest Registry as of 1 January 2003. This reassignment offers a material increase in the diversity of providers of gTLD registry services, while ensuring the continued stable operation of the .org registry.

Notes:

1. The new agreements (.com, .net, and .org) were approved by the Department of Commerce in paragraph I of Amendment 3 to its Memorandum of Understanding with ICANN.

2. See ICANN-VeriSign .org Registry Agreement §§ 5.1.1, 5.1.2 (25 May 2001).

3. The postings are archived at <http://forum.icann.org/org/>.

4. For a compendium of the presentations given, see <http://www.icann.org/bucharest/org-presentations.htm>. The proceedings were also transcribed and are posted at <http://www.icann.org/bucharest/captioning-evening-26jun02.htm>.

5. Comments of the applicants are posted at <http://www.icann.org/tlds/org/applicant-comments-on-preliminary-report.htm> and public comments are posted at <http://forum.icann.org/org-eval/>.

6. A preliminary report of the Board meeting, showing the resolutions adopted by the Board, is posted at <http://www.icann.org/minutes/prelim-report-14oct02.htm#SuccessorOperatorfororgRegistry>.

7. This table does not include .mil, .gov, .int, or .edu, which are not ordinarily used for registrations by commercial entities. In addition, the table does not include three recently introduced sponsored TLDs (.aero, .coop, and .museum) and one special-purpose unsponsored TLD (.pro), which account for fewer than 10,000 registered names combined.

8. VeriSign is one of eighteen gTLD registrars that jointly own Afilias. The ICANN General Counsel's evaluation considered the competitive effect of this ownership, and concluded that it would not impair the pro-competitive effects of the reassignment:

ISOC[PIR]'s back-end provider, Afilias, also has VeriSign as an investor. Afilias is organized as a consortium of eighteen gTLD registrars. VeriSign is a minority (5.6%) shareholder of Afilias as one of these registrars. Because the other Afilias shareholders are VeriSign's competitors, however, VeriSign's ability to exercise control over Afilias is effectively minimized and, indeed, no VeriSign employee has ever been elected to Afilias' Board of Trustees/Directors. In these circumstances, it does not appear that this investment relationship undercuts the competitive benefits of reassignment of .org, particularly in view of the fact that the .org registry would be assigned to ISOC[/PIR], not Afilias.