<nettime> P. Garrin Statement before House Subcommitte on Telecom...

[pgp@pgmedia.net (name.space)]

                      WRITTEN STATEMENT OF
                PAUL GARRIN, PRESIDENT OF pgMEDIA
      BEFORE  THE HOUSE SUBCOMMITTEE ON TELECOMMUNICATIONS,
                  TRADE AND CONSUMER PROTECTION

                          JUNE 10, 1998


Mr. Chairman:

My name is Paul Garrin and I am President of pgMedia,
<http:name.space.XS2.net>, an internet domain name system ("DNS")
business.  I thank the Subcommittee for the opportunity to submit my
testimony today.  More importantly, I thank you for considering the
very important issue of the future management of the Internet domain
name system.  As you know, the future of DNS will decide whether the
technically feasible opportunities for open competition exist in the
domain name system marketplace today, will become a reality for the
profit of all Internet users and competitors.

I have been involved in the internet addressing business since 1996
when I first proposed the idea of registering names under top-level
domain names ("TLDs") other than those controlled by Network Solutions
Inc. ("NSI") - .org, .net, .com, and .edu.  Toward that end, I created
name.space, a subsidiary of pgMedia, which currently manages 13
Internet name servers in six countries and was the first DNS company
to offer real-time on-line registration of new domain names.
name.space allows Internet users to register domain names under any
TLD they choose, from Tauzin-for.Congress to world.peace, to
technology.law.

Because the desirable domain names in the .com TLD are already scarce,
a large market exists today for domain names under new TLDs that are
more expressive, descriptive and easier to remember.  My company
provides access to these domain names and TLDs, although, for reasons
I will discuss below, the domain names I offer under new TLDs are not
currently accessible to all Internet users.  pgMedia also provides a
number of services designed to help consumers navigate the confusing
domain name system, including an on-line "whois" tool by which users
can search any TLD to determine if a particular domain name currently
exists under it, and if not,  register the domain name for themselves.

Currently, the domain name system is managed via a Cooperative
Agreement between the National Science Foundation ("NSF") and Network
Solutions Inc. ("NSI").  NSI manages the "root server" or "dot" that
acts as the central reference point for the 13 coordinated name
servers that are the "brains" of the DNS system.  NSI also manages and
updates the "root file" - a simple text file that contains the
Internet Protocol ("IP") addresses for all the name servers for each
TLD in use.

In March of last year, I requested that NSI amend the "root file" to
point address searches for pgMedia's TLDs to pgMedia's servers and
thus make pgMedia's TLDs" universally resolvable," in other words,
accessible to all Internet users.  NSI refused that request, and
pgMedia is currently involved in federal antitrust litigation against
NSI and NSF in an attempt to open the domain name registration market
to competition.

***

Mr. Chairman,  my only agenda today is to tell the Subcommittee that
competition and with it, the lower prices and innovation one would
expect, is possible in DNS now.

Nearly everyone agrees that the status quo no longer works for the
Internet domain name system.  In determining what to do next, the
Department of Commerce's recently released Statement of Policy on
Management of Internet Names and Addresses
<http://www.ntia.doc.gov/ntiahome/domainname/6_5_98dns.htm> ("NTIA
Statement") represents a valuable step in the right direction.  But
the NTIA Statement stops short of introducing any real competition
into the DNS.

The NTIA Statement admirably attempts to simplify confusing issues of
international law, intellectual property rights, and technical and
economic policy.  It properly recognizes that most of the decisions to
be made on the future of the DNS should be made by the private
Internet Community, and not by any one government.  More importantly,
NTIA recognized that neither the original proposed rulemaking, nor the
resulting policy statement=00 was capable of superceding national or
international law.


Specifically, the NTIA Statement properly recognizes that:

* a coordinated "root" is essential to the existence of a single,
  unified Internet, and that any changes to the root must also be
  coordinated;

* "where possible, market mechanisms that support competition and
  consumer choice should drive the management of the internet because
  they will lower costs, promote innovation, encourage diversity, and
  enhance user choice and satisfaction,"

* any new organization created to make DNS management decisions should
  be global and diverse, and be governed by a transparent
  decision-making process.

In providing for open competition, however, the NTIA Statement, does
not go far enough fast enough.  For too long, an artificial state of
monopoly has existed in the domain name registration market.  Both the
number of TLDs and the right to register domain names under them is
restricted.  The result is that one company - NSI - has reaped
monopoly profits while it builds name recognition and experience in
the marketplace.  The US government should move as quickly as possible
to end its endorsement and support of such a system.  This means
immediately directing NSI to allow competitors to register domain
names under new TLDs.  Every day that this does not happen allows =00NSI
to build its market dominance while competitors =00are excluded from
participation.

Unlimited TLDs are Technically Feasible

There exists no technical reason why new generic TLDs  ("gTLDs")
cannot be added to the DNS and made immediately available to
consumers.  Amending the root file to allow new TLDs is a simple
matter.  The root file is nothing more than on ordinary 500 KB "text"
file, just like a word processing document found on any personal
computer.  In order to amend the file, NSI would merely have to "cut"
text from a file provide by competitors and "paste" the text into the
root file.  In this regard, the root file - which tracks the various
TLDs - is identical to the .com file - which tracks the second level
domain names registered within it- as both are text files managed by
BIND software.  Because nearly 2 million second-level domain names
have been added to the .com file without any technical break-downs, it
is plainly feasible for new gTLDs to be added to the root file.

Arguments that an infusion of new gTLDs would destabilize the Internet
are false.  Since March of 1997, NSI has added 41 new country code
TLDs without the slightest impact on users.  Similarly, concerns that
numerous new gTLDs would cause additional consumer confusion or make
trademark infringement easier are misguided.  Today domain name
resellers, some associated with NSI, are marketing domain names under
unused country code TLDs, like .CC for the Cocos Keeling Islands and
.TO for the Kingdom of Tonga as a method to get around the shortage of
domain names in .com.  Not only does this semi-regulated approach to
competition reward backroom deals, it is just as likely to cause
consumer confusion or trademark infringement as opening TLDs to free
competition, and is much less efficient.  Also, the responsibility of
trademark policing should, like in any other medium, fall to the mark
holders, not the medium provider.  We should not hold competition
hostage while an international board struggles to decide whether any
special Internet trademark rules are warranted.


Lack of Competition Hurts Consumers

NSI is currently registering new domain names under the .com, .org,
and .net gTLDs at a rate of =00150,000-200,000 =00domain names per month.
At a price of $70 per registration - for the first two years only -
NSI's monopoly is worth $12-14 million per month in revenues.
Consumers bear the cost of this lack of competition in restricted
choices, limited innovation and higher than market fees.  Competitors
fall further and further behind by losing critical market experience
and the resources necessary to remain on the technological cutting
edge.  Ironically, although the government usually recognizes the
benefits of competition, in the case of DNS it has held up competition
and still defends NSI's monopoly in federal court.


Conclusion

NTIA's recent decision to move toward private management of Internet
DNS is sound. However, the government should act more quickly to drive
competition in the domain name industry by immediately ending all
support of NSI's monopoly control over gTLD's.  Competition, and
Internet users worldwide will be better off as a result.


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