Select Committee on Culture, Media and Sport Appendices to the Minutes of Evidence


Memorandum submitted by Personal Domain Names Limited


  PDN is a not for profit company set up with the sole aim of running a new kind of internet domain name for individuals — Dot

  Dot is the most important SLD with respect to the future development of the web. Providing individuals with their own personal website address has potential to dramatically improve the experience of using the internet.

  PDN believes that reform in the way that UK internet domains are managed is required if Britain is to be able to apply new developments such as Dot to their full potential. We believe that the current system is anti-competitive and we are looking to the DTI and the OFT to open the market to genuine competition.


    —  Nominet is the name of the organisation which currently operates as UK registry for internet domain names. Nominet is a private organisation, operating in a monopoly position.

    —  Nominet is the overall manager of what is known as the "country code"—ie the domain name ending in .uk.

    —  Although Nominet is currently accepted by the Government as manager of the .uk country code, it has no statutory recognition or remit.


  To date, Nominet have only granted applications for domain registries to themselves. Although there is a procedure that allows for the submission of "un-sponsored" or independent applications, there is little evidence that these are encouraged or have any chance of equitable consideration.

  Under the current system, Nominet is regulator, bidder and bid adjudicator. PDN believes that this presents Nominet with a significant conflict of interest that prevents it from judging applications in an appropriate manner.

  Mike Blanche, former chair of Nominet's Policy Advisory Board, is on records as saying that he, "cannot think of any circumstances where a general unrestricted commercial registry, whether for profit or not, would be better run by someone other than Nominet."

  The structure of Nominet is based on an old monopolistic US model that has since been recognised as flawed by the United States Congress and US Department of Justice. This same US model was split up into three separate registries by the US Congress because it was judged to be anti-competitive. In Australia, the Government has recently disbanded the Nominet equivalent and replaced it with a more competitive structure to provide greater consumer benefits. As a result, all existing Australian SLDs have been put out to public tender.


    —  The UK needs an internet infrastructure that can compete on the world stage. The registry used by Nominet is extremely old technology and Nominet itself has publicly declared that "even with a low percentage take up, the introduction of this SLD Dot would have considerable impact on Nominet's operational systems."

    —  The lack of a modern infrastructure has the potential to place a significant barrier to more widespread and popular use of the internet.

    —  In order to protect their system from any potential overload, Nominet is looking to deflect demand by charging a high, £50, wholesale price for setting up a Dot web-site—ie to register This means that the retail price to consumers would be beyond the financial means of many.

  As well as offering a world class internet infrastructure, PDN believes that there are strong grounds for independent applications to run registries:

    —  Consumer interest—An independent operator would introduce a new element of competition into what is currently a protected monopoly market. The "" SLD requires a more effective and "consumer friendly" registration and disputes resolution procedure then is offered by Nominet.

    —  Supply security—PDN believes that it is in the British economic and national security interest for a second organisation to provide a "pillar" of support in the registry operation sector. The establishment of a significant second location supply provides one of the most important strategic arguments in favour of an independent operator. For example, PDN's operations would primarily be based in Liverpool and Blackburn and secondarily in Glasgow, offering significantly increased security to the provision of registry operations in the UK.

    —  The Regional Dimension—PDN has the support of Liverpool County Council, BT Ignite and Sun Microsystems on both the application and the location of new developments in the region. The establishment of PDN's registry in the North West would benefit from available skills and capacity, and act as a major engine for growth for the IT sector in the Merseyside area and the wider region. This sort of regional spread is vital if the whole of the UK is going to benefit from the development of British internet industries.


  On 18 December, Nominet took the step of putting their application to a vote of members. If it is approved, the new inftrastructure will be up and running on 14 January 2002. Nominet have not notified the membership (which numbers over 3,000) that there is another application which we believe has been unfairly rejected and which the OFT is currently looking into.

  We need the Government to urgently consider the role of Nominet.

  In the interests of fair trading, and in order to safeguard the future development of the UK's internet infrastructure, PDN believe that in this case, the Government must urgently examine the role currently played by Nominet and ensure a level playing field for UK internet domain regulation.

24 December 2001

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