We requested feedback from the Internet Community on its proposals to revise the policy and procedure for creating new Second Level Domains in the .uk namespace.  The request for comments ran from 1 July 2003 - 30 September 2003.  The text of this request for comments is below:

The original process, and the objectives for the review

Nominet believes that the fundamental principles set out in the original SLD policy remain appropriate and relevant, namely that the overriding concern should be to maintain the stability of the Domain Name System as a whole, and that there should be a measured and responsible approach to the creation of new namespace. 

Nominet recognises that the original SLD Policy and Procedure did not set out adequate descriptions of the necessary qualities for a would-be SLD operator.

Whilst Nominet strongly maintains that its handling of all applications under the original process was fair and non-discriminatory, it accepts that improvements could be made in order to give greater transparency and public confidence in the process.

The proposed revisions

In brief, the proposed revisions can be summarised as follows:

• The Procedure will be administered by an independent secretariat (external to Nominet).
• All applications will be reviewed by an independent panel of experts, on the basis of detailed criteria set out in the SLD Policy and Procedure;
• There will be open competition, with a call for proposed registry operators being made in respect of each application;
• The competitive applications will be subject to two rounds of open, public consultation;
• Nominet itself will be subject to the same procedures and assessment criteria as any other applicant;
• Applications will attract fees, calculated on a full cost-recovery basis, payable on a stage by stage basis.  Applicants will not be committed to pay for any more than one stage at a time.

The Policy

It is not proposed to make any material changes to the underlying policy of a measured and responsible approach to the creation of new namespace.

However, the proposals greatly expand the criteria which applicants need to satisfy in the areas of technical, operations, business planning, marketing, financial and legal, and include requirements on applicants to include details of disaster recovery and data escrow, firm financial backing, realistic operational plans, outline rules, planning for start-up phases and the resolution of disputes.
 
The Procedure

The draft SLD Procedure sets out a 7-stage process from initial application to delegation.   It is proposed that an independent Secretariat be appointed to administer the process.  Applicants may opt to have their application checked for completeness by the Secretariat.  Applications would be assessed by an independent panel of 5 experts

It is intended that the both the Secretariat and a pool of 15 or so potential panel members would be selected prior to the first application being made.  Although Nominet would appoint the Secretariat and a Panel Chair, the recruitment of panellists would be handled so far as possible by an independent firm of recruitment consultants.

In summary, the Procedure is as follows:

Stage 0 Optional pre-application review by the Secretariat.
Stage 1 Submission of application and appointment of Panel Members.  
Stage 2 Call for competing applications.
Stage 3 Initial public consultation.
Stage 4 Full evaluation of application(s), publication of initial recommendations.
Stage 5 Final public consultation.
Stage 6 Final Panel report.
Stage 7 Decision by Nominet's Council of Management, contract negotiation between selected applicant and Nominet and delegation of SLD.

Panellists will be required to stand down if they have a conflict of interest in dealing with any application.  In addition, applicants are able to object to a maximum of 5 panel members on the basis of conflicts of interest.

In order for a new SLD to be adopted, it is necessary for Nominet's Council of Management to make a decision as to whether or not to accept the Panel's recommendation.  In most cases, the Council of Management will adopt the Panel's recommendation, but it has certain, limited grounds on which to refuse: where demonstrable technical or legal reasons prejudice the quality, efficiency and reliability of Nominet's operation of the .uk namespace, or where approval of the report would conflict with the directors' fiduciary duties to Nominet.

We estimate that, on average, the procedure will take 1 year and 7 months to complete from start to finish.

Fees

Nominet has made detailed cost estimates for the process, which have been calculated on a cost-recovery basis.  These charges are not substantially more than the costs required for applying for the creation on new generic Top Level Domains in the context of a more complex, open and transparent system.  Nominet believes the costs estimates to be realistic and fair.  Clearly, however, the costs would need to be reviewed by the Secretariat in the light of experience. Nominet would pay the same fees as any other applicant within the process.  Applicants would only be committed to paying the fees one stage at a time.

The costings document illustrates the extent to which the fees could vary depending on the number of applicants who participate in the call for open competition.  Nominet believes that it is realistic to assume that there will be at least 4 applicants participating in an average SLD application.  If this were the case, it would bring the estimated cost per applicant to £54,000+ VAT  (assuming that the optional Stage 0 were not completed).  If the applicant were successful obtaining the SLD, the fees would increase by an estimated £2,650 + VAT, in order to progress the application through the final stage of contractual negotiation and launch of the new SLD.

Nominet acknowledges that the fees could be substantial, particularly if only one applicant participates in the process.  However, to some extent these costs are the price of introducing two major elements which are proposed to be run entirely independently of Nominet: administration by a Secretariat, and review by the Panel of Experts, together with the costs of widespread advertising for the call for competition and consultations.  In order to balance need for independent review with the resources available to potential applicants, it is proposed only to require that each applicant pays for one stage at a time.  In addition, as the application process proceeds, applicants will have increasing information (as a result of initial consultation feedback, the initial panel report etc) on which to base their decision of whether or not to continue with their application. 

The fees are estimates, and any surplus will be returned to the applicants at the end of their participation in the process.

How to respond to the RFC

In order to submit your views to this request for comments, please read the background, proposed policy and procedure, and the costings document before making your submission. 

In order to assist us in consolidating the views of the Internet Community on the proposals, we would be grateful if you could respond to the following questions on the new process:

1. Do you agree with the underlying policy objective of taking a measured approach to the creation of new Second Level Domains in order to protect the stability of the existing namespace, so that the Domain Name System continues to provide a clear navigation path for potential users (Policy B1 - B3 inclusive)?

2. Do you think that Policy paragraph C2 gives adequate guidance as to how the Panel should give weight to the different selection criteria set out?  If not, what do you consider to be the most important attributes in a  potential SLD operator (it may assist to refer to Policy sections D - G)?

3. Do you think that the Policy adequately describes the necessary qualities (operational and technical (Policy section D), financial (Policy section E), business (Policy section F) and legal (Policy section G)) for an operator of an SLD?

4. Do you agree any application by Nominet should be assessed by exactly the same methodology as all other applications (Procedure A13)?

5. Do you think that the proposed mechanism for applicants to raise objections to Panellists is sufficient to ensure that the final panel is truly independent of all conflicts of interest (Procedure F5 - F7 and G4)?

6. Do you think that the proposals provide sufficient scope for competition between  potential registry operators (Procedure section G)?

7. Do you think that the outlined communication and consultation processes for each application are inclusive and pitched at the correct level (Procedure (throughout) and sections H and J)?

8. The proposed application fees (Costings paper):

8.1. Do you think that the fees are fair and proportionate?
8.2. Do you think that the proposed stage-by-stage payment method successfully balances cost with accessibility to applicants (Costings paper, and Procedure section D, in particular D7)?

9. Do you think that the proposals provide a fair and understandable process for applying for and evaluating new SLDs

Submitting your comments