Taming of the domains
It was an environment no one had found themselves in before and he was the one who copped all the flak. We had domain name hijackers and people registering thousands of new names and he was trying to put in place a structure to cope … I went with him to see various people but some of them were unbelievably rude and offensive. He just had to hunker down underneath all of that. Jim Higgins ISOCNZ chairman defending embattled Domainz executive Patrick O’Brien.
With thousands of businesses around the globe dependent on always-on, high-capacity, on-demand Internet services, the question was being asked, could the Internet continue to grow exponentially without technical tweaking, upgrades, maintenance, more robust administrative and legal frameworks? When the technology that enabled the interconnection of computer networks within the US military and academic communities went global, the ‘public good’ backbone soon became commercial strength, and ownership shifted to consortiums of telephone companies, responsible to shareholders to turn a profit.
There were more questions than answers. Could it still be said that the Internet belonged to everyone and no one? Could censorship, copyright, trademark issues and court suppression orders still be enforced? Could junk mailers and pornographers continue to fire their unsolicited material at our mailboxes without risk of penalty? Was it down to each government to regulate and monitor what was fair or foul, or did responsibility fall to the holder of each country code, ISPs, the individual or some eclectic mix of these stakeholders?
There was no single international forum that could be described as governing or controlling the Internet. Responsibilities were shared among numerous private sector or industry-driven groups, to avoid undue influence from vested interests including governments. There was the Internet Engineering Taskforce (IETF), which managed the protocols and technical specifics, the IAB, which had the big picture overview of how everything was strung together, and the Internet Administration Numbering Authority (IANA), which handled numbering, naming, protocol, and policy issues for the Internet. IANA was headed by Dr Jon Postel, under contract to the US Government through the University of Southern California’s Internet Standards Institute (ISI). It had a relationship with the ISOC, which provided secretarial and administrative support and edited the request for comment (RFC) – essentially achieved by consensus – which after multiple drafts and submissions typically became the bylaws of the Internet community.
While the US Government subsidised the initial expansion of the Internet, it had given notice that its input, including the administration and management of the underpinning domain infrastructure that allocated and managed country codes, was not indefinite. Future development would require a new body, and if the Internet community had its way, this would be private sector and industry led. Technology was moving rapidly and the burden had to fall somewhere; someone had to pay the bills that arose from managing and maintaining the domain name system and ensuring the Internet geared up to meet what was obviously an accelerating growth curve.
In those primordial days Waikato University not only handled all the administration for the New Zealand end of the Internet; it brokered the majority of the country’s bandwidth to and from the US backbone. From 1989 it began supplying access across the university network and inevitably into the public domain, but there was uncertainty where its responsibilities began and ended. In effect it was operating from a two-sentence email sent in 1986 from IANA head Jon Postel, via CSnet International Liaison programme director Larry LandWeber. LandWeber had brokered the deal that made John Houlker at Waikato University country manager for the dot.nz space.
Early users of the Internet in New Zealand were part of a close-knit community and most technical and Internet access issues were still resolved through direct personal relationships, with the university staff administering the service. If someone requested a domain name they basically sent an email request to whoever was maintaining that domain at Waikato or Victoria University. The domain name database was administered almost as a ‘public good,’ courtesy service.
As the Internet became increasingly dominated by commercial interests, various university computer departments had become de facto distributors of Internet access within their own campuses and sometimes beyond. The administrative roles initially allocated to Waikato University and the Tuia Society were moved across to a new body representing the wider national interests of Internet users in 1995. At the time there were around 24 ISPs.
ISOCNZ was the perfect expression of the academic, science and technology, and private sectors working together without government involvement. ISOCNZ assumed its authority to operate the dot.nz policy from the two-line email via Postel to Waikato and took its mandate from RFC 1591. This discussion document had done the rounds of the Internet community, been refined over time, then been frozen as a legal position defining the roles and function of the international Country Code Top Level Domain (ccTLD) manager. In effect this statement made it clear that a country code manager would act in the best interests of the local Internet community.
The society was based on the foundational statement that the Internet in New Zealand would remain ‘uncapturable.’ In other words, the not-for-profit organisation would become the kaitiaki caretaker or ‘guardian’ of the Internet. It was asked to find a workable balance between open and free expression, and protecting users against the threats posed by hackers, crackers, pornographers, unscrupulous ISPs, carriers that held users to ransom, and enforcement bodies who wished to impose onerous tax, copyright, and other legislative constraints.
There was a general sense of relief that a body had been established with formal rules and goals to progress things from the unwritten arrangements between Waikato University, Victoria University, and the Tuia network. However the way in which this was achieved was soon to raise some eyebrows and become the centre of heated debate.
Commercial pressure points
From 1996 the main carriers, Telecom and then Clear Communications, entered the fray with their own Internet operations and were fighting tooth and nail for market share, using every means to stave off competition from the now 90 or so ISPs nibbling at their heels. The main gateway at Waikato University was working closely with Telecom, Clear, and Telstra and increasingly taking a backseat in terms of bandwidth provision. Rather than depending on Waikato as their only source of access, the universities could now go to market for competitive ISP services.
Waikato University’s Information Services Department remained intricately involved in managing the dot.nz country code, handling domain name registration and the dot.nz DNS but keen to devolve the last vestiges of its pioneering efforts to the ISOC. The DNS at Waikato, containing all the locally registered domain names, linked to a global directory of names and addresses in the United States enabling Internet users to find people or information anywhere on the Internet. It was like a phone book that translated domain names, host names and IP addresses to email or Web addresses.
Most New Zealand domain names were still managed and moderated at Waikato University by Rex Croft, considered New Zealand’s ‘father of DNS.’ As the pressure came on, Waikato had written scripts, Web forms and an email template to do all the donkey work, including running tests to ensure name servers were reachable. If someone requested a new domain name or changes to a domain, Croft would typically copy the details into his own file and then load this into the DNS and ensure it was live.
ISOCNZ hadn’t intended taking over the physical work of registering domains. Its prime concern was watching over the wider interests of the evolving Internet community. But if the requirement was there, surely it would be a relatively easy process to take over the DNS Registry and just as easy to delegate this responsibility. Just as the transition from Waikato was underway, the Internet went through an exponential surge no one was prepared for. For many months ISOCNZ was so wrapped up in sorting out its own internal identity issues, and how it would manage its new responsibilities, that it failed to communicate clearly to the Internet community what was going on.
Initially there had been no cost in obtaining an Internet domain name – that was picked up by the taxpayer – you simply sent your email request and it happened, even though you might wait a week or two. Your domain was yours indefinitely, with no requirement to re-register it year on year. That was all about to change. Waikato University wanted out. The ISOCNZ council was forced to look at what might be involved in setting up its own .nzRegistry, and the best business model to cover the cost of that project while continuing to pay Waikato for its services during the transition.
Jim Higgins had been involved from day one with ISOCNZ at committee level, and recalled asking the newly formed body what its plan B was for managing the dot.nz domain. “They didn’t quite understand my meaning. I said registrations were skyrocketing and one day the accountants at Waikato University were going to find out how much they were contributing to running the .nzRegistry. The representatives from Waikato assured me there was no problem but the very next ISOCNZ council meeting, gateway manager John Houlker made an announcement: ‘Gentlemen, I have some serious news. I have had a visit from the accountants and they are concerned about the cost of running the domains and don’t think it’s core university business.’”
The decision by ISOCNZ to begin charging for domain names was fraught with tension, expressed strongly from within the group of 500 or so existing domain name holders who had acquired their ‘cyber land rights’ for nothing and were now having to pay for the privilege. Don Stokes, who was looking after registrations at Victoria University, said the old school in particular baulked at the idea. The fact that someone might make money from registering domain names, something that had effectively been a labour of love for a few core individuals, did not impress. “This was seen as further evidence that nasty capitalism was now invading the once pure halls of the Internet community. I got a few calls from people saying, ‘Oh, how sad you’ve bought into the whole user pays thing.’”
The newsgroups were running hot with terse comments and criticisms from gamers, greenies, political activists, and social commentators, unhappy with the new rules and regulations that appeared to be challenging their anarchistic idealism. Realistically though the stated goals of ISOCNZ weren’t that far removed from their open access aspirations: “To maintain and extend the availability of the Internet and its associated technologies and applications in New Zealand, both as an end in itself and as means of enabling organisations, professionals and individuals to more effectively collaborate, co-operate, communicate and innovate in their respective fields of interest.”
ISOCNZ continued to rely on Waikato University’s Information Services Department for technical services, database management, basic billing, and the collection of fees. Waikato had agreed to an annual contract to look after the back-end DNS servers and host the zone files for the dot.nz domain.
Universities exit stage left
Waikato had drawn a line in the sand. It would continue to turn on and assign domains and receive fees on behalf of ISOCNZ for a limited time. It wasn’t interested in handling any problems or disputes and began referring such issues to Andy Linton at Victoria University’s Computer Sciences Department.
However Linton didn’t have the time or the resources to deal with them. Consequently those who were raising issues weren’t getting a response to their emails and began sending even more irate ones. The abuse began to pile up and Linton threatened to resign unless the society found some other way to deal with the flood of mail. “It got to the point where we had a big black cloud hanging over us,” said Higgins.
On legal advice ISOCNZ had in October 1996 established a subsidiary company, The New Zealand Internet Registry Ltd (trading as Domainz), to run the domain name register. Domainz’s role was to manage DNS operations and operate within the open framework policies being formulated, maintain stable operation of the name space during the transition from the universities, and establish a ‘fee paying, service-based contractual framework’ for delivery of the DNS. This needed to cover costs and ongoing investments in the system.
Jim Higgins was elected chairman, replacing founding chairman Roger Hicks, whose term was up. Higgins priority was to get both ISCONZ and domain registration on a solid business footing. He needed someone to take charge of the domains business and phoned Bev Pratt, at Wellington’s Doughty Pratt human resources company, asking how long it would take to get a chief executive. The candidate she came up with was Patrick O’Brien, a specialist in change management who had just finished a contract shutting down Telecom’s Asian operation.
Within two weeks O’Brien was essentially working as business manager with the core responsibility of running a commercial registry, and migrating that business away from Waikato and Victoria universities. He was to place the New Zealand DNS on a formal footing ‘in line with the development of the Internet as a critical infrastructure for the country.’ However he didn’t exactly walk into executive luxury with a fat pay packet. Initially he operated from a spare desk and shared a telephone line at Higgins’s consultancy company, The Net Edge. To start with there was no money, not even for his wages, all the funds were tied up at Waikato University. O’Brien’s first task was to establish an accounting system to take charge of this revenue stream, pay himself, and develop the business.
According to O’Brien, who considered himself an Internet outsider, the ISP landscape seemed ‘warriorlike,’ and split along tribal lines. “The impression formed then was that the market was fragmented, competitive, and highly stylised around individuals and their personalities. It seemed to me that only the arrival of a threat from the ‘man from Mars’ in the form of Xtra, could draw them towards a common, if temporary, purpose.”
Very little had been put in writing by Rex Croft and John Houlker at Waikato University or John Hine and others at Victoria University when they had been solely responsible for dot.nz and co-ordinating the various relationships with domain name registrants, bandwidth providers, and ISPs. Gavin Adlam from Rudd Watts and Stone had been appointed solicitor for ISOCNZ and Domainz with the role of documenting the responsibilities of the new bodies. He incorporated the companies, and wrote up rules of engagement as he learned how things had been done in the past, and how they needed to be structured in the future.
In parallel ISOCNZ had created a number of working groups and committees to establish policy governing the dot.nz domain. Its policies were all pro-registrant; its foremost obligation was to protect the rights of the person who had registered the domain name. To do this it needed accurate record keeping.
It adopted an ‘open’ TLD, similar to the United Kingdom. If policies added value they were adopted, those that did not were removed. There were few barriers to entry compared to countries with a ‘closed’ TLD approach, which restricted the number of domains a name holder could have, banned brand names, and required domain holders to be citizens of the country, as was the case by Australia. You only had to meet two conditions to register a domain name in New Zealand. One was that nobody else had registered it before you and that it wasn’t objectionable. Even the ‘objectionable’ clause was later deleted.
An early task for O’Brien was to check out all the domain names that had been registered and convert them to the new, fee-based system, which in itself proved fraught with tension. He also put in place debt-collection procedures. Under the new model, those who didn’t re-register would have their domain names deleted, although in the end 74 percent were repurchased. The number of registrations was on a steep upwards curve. Domainz was soon processing 150 applications a month. A second person was hired to help with the phones, and ISOCNZ began laying the groundwork to establish the computer hardware and software to run its own DNS system.
Bruce Simpson at Aardvark had been contacted by 20 or so domain name holders including pioneering ISP owner David Dix and NZ Infotech Weekly columnist Paul Reynolds who were ‘less than impressed’ with the way ISCONZ handled domain name updates. Dix, owner of KCBBS, had posted on the nz.org.isocnz newsgroup while ‘normally mild-mannered Scotsman’ Paul Reynolds had lashed out in his weekly Dominion column. Dix argued he already had a contract covering his domain names with the previous operators of the DNS and was concerned at the wording of the communication sent from ISOCNZ with a thinly veiled threat promising ‘cancellation’ of your domain name if you don’t respond.
Reynolds complained he’d spent more than two and a half hours on-line trying to comprehend and complete the form required to confirm he still wanted his domain name. ISOCNZ was telling holders of pre-July1996 domain names that they should respond quickly to avoid having their domain names cancelled. Simpson pointed out that ISOCNZ should lead by example as its own domain had still not been updated.
Asserting rights and wrongs
ISOCNZ was soon under fire for taking a hard line with domain customers, for making arbitrary decisions without consulting its membership, and for failing to communicate with the Internet community it was supposed to be representing. “Given the ready-access of the net and the ease with which a democratic voting system could be implemented, why doesn’t ISOCNZ put contentious issues such as changes to the domain name policies to a member-vote instead of ‘imposing’ policy changes without even a draft approval phase?” railed Bruce Simpson on his Aardvark site.
The appointment of O’Brien seemed to go some way to addressing the problem, but his communications were often abrupt and matter-of-fact. For example, Dean Pemberton of ProActive claimed his domain name had been deleted from the registry without his request or permission. While ISOCNZ insisted it was well within its rights to withdraw the domain, Peter Mott of private domain name service company NETregistry, slammed ISOCNZ for its response, claiming the customer deserved more than blame and referral to the ‘terse and technical contents of the relevant RFC.’
Mott was also critical of ISOCNZ’s lack of response to his own queries, and the failure of the organisation to react in a timely manner to requests from other members of the Internet community. His ultimate peeve was that Domainz was acting as both a registry and a registrar. In fact in February 1997 he called for ISOCNZ to relinquish its role as “overall supreme commander of the New Zealand namespace in favour of a strategy that more fairly and evenly distributes the power to other operators.” He proposed an approach that would effectively allow resellers to compete with each other on a level playing field to the advantage of the client. The Society began inviting submissions on the matter.
O’Brien said these were ‘troubling times’ when the governance of the Internet was undergoing great change. Management was shifting, often with great resistance, from technical experts to a strong financial-based model. He felt he was wrenching the Internet in New Zealand from the hands of technical entrepreneurs to a service-oriented, business-driven platform that was more focused on governance. However he admitted there were some basic marketing errors around charging for domain names and the arrival of Domainz: “Taking over the domain name business was mistakenly regarded as a straightforward and chiefly technical exercise. In reality we were trying to create a business to give service to customers, when we weren’t really clear who we were serving and what we were actually giving them … There was no advanced planned of how to tell people about domain name charging, little on how to fund the company’s activities, staff, premises, even computers for administration were not considered, and least of all marketing.”
Jim Higgins, who had employed O’Brien, and was at the time chairman of both Domainz and ISOCNZ, empathised with the position the new Domainz CEO found himself in. “His job was to make Domainz work, to put systems in place to collect money and resolve disputes. It was an environment no one had found themselves in before and he was the one who copped all the flak. We had domain name hijackers and people registering thousands of new names and he was trying to put in place a structure to cope. He was under pressure and had to do what the society asked of him. He was a business man with an objective to achieve. I went with him to see various people but some of them were unbelievably rude and offensive. He just had to hunker down underneath all of that.” By 1997, according to McNair, there were 516,000 New Zealanders on the Internet.
So who put you in charge
From the outset O’Brien found about a third of his time was taken up with legal issues, including weekly meetings with lawyers. There was the Cadbury-Sanyo-Xerox domain name dispute in 1996 and later hijacking cases involving Steinlager and L.V. Martin. There were legal disputes when ISPs registered client domains in their own name, and domain name ownership issues arising after marital or company breakdowns.
Complaints to the Commerce Commission in the first quarter of 1997 alleged Domainz was involved in ‘monopoly abuse and overcharging.’ This followed the decision to deregister domain name holders who refused to pay the new re-registration fee. The commission also looked into Domainz ability to take this action, given that the dot.nz domain space was a technical monopoly and ISOCNZ held exclusive franchise. By June the Commission cleared ISOCNZ of any breaches of the Commerce Act.
Even the privacy commissioner looked into the affairs of Domainz, questioning its use of personal data, through its policy of making the identity of domain name holders public through its web site. It took more than a year for the commissioner to investigate and report that there was nothing irregular about the policy. “When Jim invited me into the job, I thought it was to actually build a registry business – now I realise my job is to keep ISOCNZ councillors out of jail. Generally you’re trying to make sure there’s no exposure for the society and protect the domain name holder,” said Patrick O’Brien.
The criticism kept coming, much of it directed at O’Brien personally. He got a chance to set things straight when he was interviewed by journalist Russell Brown at the conclusion of the TUANZ conference in 1997.
Domainz was soon generating a healthy revenue stream. It had reduced its debts from late-paying customers to 20 percent and improved its internal accounting and DNS management, although it was still looking into the parameters for a new management system. Rather than having to deal directly with Domainz, individuals or companies could now register their domain names through ISPs, Web designers, and specialist domain name providers who in turn dealt with the wholly-owned ISOCNZ subsidiary.
Hijackers make and break the law
From May 1998 ISOCNZ had been deeply involved in its second major domain name hijacking case with Oggi Advertising and defendant Cameron McKenzie. There had been high hopes that ISOCNZ’s position as an impartial body might have been clarified in the 1996 case: Cadbury, Sanyo, and Xerox v David Ward of the DNC. Now it was being sued as the fourth defendant, with Internet Registries Ltd (Domainz) named as the fifth defendant. Its first come, first served approach was being challenged. This was one of the first court cases of its kind involving a country code registry in the world, and became the focus of widespread media attention.
Oggi Advertising had alleged ISOCNZ conspired to infringe its trademark and was party to the act of ‘passing off,’ or attempting to use someone else’s trademark in a deceptive manner. The main defendant, Cameron McKenzie, had registered oggi.co.nz and attempted to sell the name back to Oggi Advertising. In previous cases the trademark holder, once convinced of ISOCNZ’s independence in the matter, had targeted the individual or company that had registered the infringing domain name. ISOCNZ chairman Jim Higgins and Domainz chief executive Patrick O’Brien both denied the allegations. In fact Domainz’s terms of service made it clear that accepting registration of a domain name indemnified ISOCNZ and Domainz against any liability in trademark disputes. When the case eventually went to court it was Oggi Advertising Limited v McKenzie (June 1998). The Court held that McKenzie’s registering of the domain name would hinder Oggi in its business activities and was calculated to damage Oggi’s goodwill.
Peter Dengate Thrush acted as counsel and Gavin Adlam was solicitor for ISOCNZ and Domainz. “We took no part in the argument about domain names. We said from the outset we would comply with the orders of the court. There were no other orders made about us, no finding of any fault and ultimately an out-of-court settlement was reached between Oggi and McKenzie. Up until this point it had been a perfectly routine case; cyber squatter goes to court and the judge says, give the name back to the owner who’s got a better claim. We were simply sitting on the sideline and agreeing to transfer the domain name if and when ordered to do so.”
There was frustration that ISOCNZ and Domainz had been joined to this litigation in the first place. Oggi had not achieved anything by involving the two parties, other than what was offered prior to the proceedings. Having spent a lot of time and effort preparing their defence, the two parties sought costs. Oggi resisted but ended up having to fork out. “We got a substantial amount of our $50,000-$80,000 cost back. No one else was going to have a go after that,” said Jim Higgins. In summing up, Judge David Baragwanath in his second judgment agreed ISOCNZ and Domainz were unnecessarily implicated and had only been acting in the public interest as an impartial body.
The Oggi case confirmed that people with intellectual property rights could have a claim on the domain name space, and affirmed the first come, first served approach. The judge’s comments attracted worldwide press. “It was now clear that a ccTLD registry following our policies was safe from thousands of law suits. That was a fantastic vindication for us as we sought to balance intellectual property rights and the need to get large numbers of people onto the Internet quickly,” said Dengate Thrush.
This was put to the test again in July 1998, when Electronic Media registered the names of 230 business, sport, and entertainment personalities. This was another clear case of ‘domain name squatting,’ where an unauthorised party registered Internet domain names belonging to major companies in order to sell them back for a profit. ISOCNZ was hoping this case would add further weight to establishing an international legal precedent to simplify the way disputes were handled in the future. However this was also settled out of court.
While the precedent had essentially been set, there were still those who felt Domainz should be doing more to protect the right of brand name owners. Tim Wood, director of ISP Ihug, had earlier in the year found someone had hijacked his domain, and while it had since been retrieved, he was concerned that the whole area was still a bit messy. “The main issue is that large corporate players are getting onto the net and finding that their domain name space has been taken by Joe Entrepreneur and it’s taking a lot of time to go to court and get it back. Oggi and Ihug got back their domain names back but the Internet is still a bit like the Wild West. It would be better if it was a bit more regulated with a more hands-on, active roll and more funding allocated to controlling what domains are registered.”
In August 1998 Jim Higgins claimed New Zealand was ahead of most of the world in terms of the efficiency of its DNS and the way it represented users. It had registered more than 20,000 domain names at a cost of $96.75 for the first year and $74.25 for every subsequent year and was taking on new registrations at a rate of 1000 per month. In fact Domainz, a non-profit organisation, was now taking in $1.5 million a year and still considered to be in start-up mode.
In October Patrick O’Brien insisted he had made good on promises to bring down domain prices. New Zealand now had one of the lowest domain fees globally and one of the highest service levels available for global registries. There were now 24,000 domain names registered, which meant New Zealand rated 12th out of 259 country codes. “Over 99 percent of names are listed within one business day – this will cost you about $250 in the UK, $300 in Australia and above $500 in Germany. In 1997 only 40 percent of customers paid on time and delinquent accounts averaged over four months; a year later over 80 percent were settled on time.”
However Domainz’s dual role of registry and sole registrar continued to drive intending registrar and ISP owner, Peter Mott, crazy. “Mott’s argument was that the people he sold domain names to were his customers, it was his data and he was the one who should keep track of where they lived, what their phone numbers were and take the money off them. All the registry should do is keep track of the data and point to him,” said ISOCNZ legal counsel, barrister Peter Dengate Thrush. That view was contrary to many on the ISOCNZ council at the time. “There were these legal and mystical arguments about who was responsible for the client. We thought it was important to maintain a direct connection between the registry and the client. In our experience the only real trouble was with the registrars; they were commercial businesses and could go broke.”
After attending international meetings representing the dot.nz country code throughout 1999, Patrick O’Brien became convinced of the value of moving to a shared registry model. A policy paper he presented in August 1999 proved controversial, envisioning that New Zealand Internet Registries Ltd, the parent company of Domainz, should act as contract manager, putting many of the operational components of the DNS out to tender. This wasn’t viewed favourably by those who had opposed domain registration becoming a lucrative business in the first place. While service delivery had improved considerably, and access was now opened up to a new breed of service providers, Domainz was still sole supplier and manager of the market. New Zealand’s approach to the second level domain was generally regarded a sound model, however key governance questions remained, and the ownership structure of the domain, and Domainz’ role as ‘sole service provider’ continued to resurface as an issue. 
Pressure to perform
O’Brien announced that he wanted help in developing next generation technology that would enable him to further automate the registration of domain names, and called for volunteers for a working group. A number of those wanting to be registrars, including Peter Mott, got involved in the process of investigating what was required for the Domainz Registration System (DRS). The first problem was that O’Brien wanted the development done using Microsoft software, when most in the ISP community were Unix people, said Dengate Thrush. He then required them all to sign non-disclosure agreements in the hope this would encourage the sharing of ideas. If they didn’t feel safe putting their ideas forward in the planning meetings, O’Brien was concerned he would not get the information he needed to design the new system.
However the non-disclosure agreement also had the effect of preventing discussion within the Internet community. “You have to remember that this kind of discussion goes on under the constant spotlight of the most vigorous mailing list culture. People would ask, ‘What is going on within the new registry?’ and those on the working group would say ‘We can’t tell you.’ What had been conceived as an idea for open sharing was soon turned around with statements like ‘We’ve been gagged by Patrick O’Brien.’” This contributed to mounting disinformation and misunderstandings.
By the end of 1999 New Zealand had the third-highest ratio of domains per capita in the world, behind Denmark and Switzerland, and ahead of Sweden, Australia, the United Kingdom, Germany, Canada, Italy, Japan, and the United States. It cost about $60 a year to register a domain, one of the lowest fees charged by an Internet registry. Charges had dropped by 22 percent in the year to 31 March 1999, with substantial discounts for high-volume registrars. Most domain name registrations were submitted by ISPs, Web designers, and specialist service operators. Few users now approached Domainz central registry directly. About 88 percent of all domain names registered in New Zealand were in the dot.co.nz second level domain, up 38 percent on 1993. A healthy number of new registrations were from overseas companies wanting dot.nz versions of their Internet domain names to protect their trademarks, copyright, and corporate image, often as part of an international marketing strategy.
Domainz now employed nine staff at its Wellington headquarters and was operating seven days a week. The first profit in its three-year history was announced at its AGM, reporting after-tax earnings of $451,007 to 31 March 1999. At the end of 1999 Domainz was handling more than 3000 applications a month and processing most in a single business day. There were 45,000 dot.nz business domains registered in New Zealand and demand was rising about 80 percent a year. It was now obvious Domainz was in a position to begin paying quite large dividends to its shareholder, ISOCNZ.
Jim Higgins put forward a proposal that a foundation be formed to help fund Internet development, Internet education, and ‘good works.’ This further incensed those who believed the society should be operating on a not-for-profit basis and did not believe it should be developing mechanisms to spend this large profit. This further complicated Higgins’s dual role as chairman of ISOCNZ and Domainz, and led to several approaches to Peter Dengate Thrush to stand for council.
“When Jim decided it was time to step down from the chairmanship of ISOCNZ, he was reluctant to leave until he felt it was in ‘safe hands.’ This was a bit of an ask, as the role had a high workload, was essentially a voluntary service, and very high pressure on the political front. No one seemed terribly keen on the job. Councillors at this stage were elected from the membership, and the council then chose officers from among themselves, based on skills and willingness, to stand for the chairman’s role,” said former executive director Sue Leader. “Jim made a persuasive case that the time had come to make the chairman’s honorarium attractive enough to bring some new blood in; it was set at $20,000 at the September 1999 strategic planning weekend.” When Higgins’s term as chairman – a title interchangeable with president – was up, he nominated Dengate Thrush as his successor, a position he took up in mid-December. Higgins remained chairman of Domainz.
The ‘maiden profit’ was to be invested in redevelopment of Domainz systems in order to cope with future growth. A proposal had been put forward to invest $500,000 in the DRS technology upgrade, which was expected to deliver easier navigation for users, e-commerce payment options, greater process automation and the ability for registrars to actively manage their name holding base. This was due for implementation in early 2000 with operational centres in Auckland and Wellington. Ample evidence of the need for that technology upgrade came when the Domainz web site went off air for about 24 hours in mid-March 2000, due to a fault at Wellington Internet provider Actrix. web sites hosted by Actrix, including the pages belonging to Domainz, remained inaccessible until the fault was rectified. Although a replacement card for the server was sent from Auckland it proved to be the wrong one, prolonging the outage. The problem was seized on by the anti-Domainz faction as further evidence of incompetence.
Peter Mott, founder of the ISP 2Day, found it extraordinary that an Internet infrastructure provider could put itself in a position where its site was down for so long. Mott had developed a business registering names, claiming to be the largest registrar behind Xtra. While 2Day’s automatic domain registration system interfaced directly into the .nzRegistry server at Waikato University, after the switch over in May 2000 it would be totally reliant on Domainz. O’Brien said the new system would be run on mirrored servers in Auckland and Wellington, so there should be no downtime. Mott claimed the system, being developed by Domainz with Advantage Group subsidiary Glazier Systems, was unnecessarily complex and would be expensive for ISPs and customers. He said Domainz managed the database and set the terms and conditions for all those who wanted to register a name and had proceeded with its plans despite industry concerns.
ISOCNZ chief executive Sue Leader said there was a general misunderstanding that the .nzRegistry DNS had gone off-line but insists that never happened at any stage. What had occurred was that resellers couldn’t get access to the web site to conduct their business. The DNS itself was never at risk. Leader said Mott regularly complained about the slowness of ISOCNZ in responding to queries but she remained determined to keep on the case as quickly as she could. “I spent the majority of my time working on-line, and my email program – Pegasus Mail, of course! – popped an alert as every email came in. A common daily email load ranged from 50 to 100 messages, many from the different mailing lists I was on. I made a point of responding as promptly as possible, especially if they were from members. One day I opened an email from Mr Mott was time-stamped as being sent one minute earlier and, as I was reading it one minute later, the phone rang. It was Mott wanting to know why I hadn’t responded to his email! I explained that I was reading it as we spoke, and then dealt with whatever business it was about.”
Breaking the monopoly
Opposition to ‘the Domainz monopoly’ escalated, with many in the technical community becoming engaged in what has been described as ‘a religious war’ over which style and philosophy of registry management was most suitable for the future. Domain name services consultant Joe Abley echoed the growing concerns that Domainz was acting as both registrar and registry. He said Domainz was competing with its own customers by maintaining a commercial relationship with the end user, or registrants, as well as ISPs that on-sold services to end users.
Much of the controversy could be traced back to the plan by international domain name governance body ICANN, under contract to the US Government, to turn monopoly domain name hosting company NSI into a shared registry system. It had previously had a US$5 billion contract with the government and the transformation meant it would now only be a registry with multiple competing registrars. In many ways this was the catalyst that got people thinking New Zealand should adopt a similar approach. That was certainly the model favoured by Abley, who had worked with Clear Communications and 2Day.
O’Brien had also been inspired that the NSI model but it was the way he was planning to adopt his SRS model that was the source of the growing frustration. Abley wanted a system that would allow any number of companies to operate as registrar, and saw no reason why numerous registrars couldn’t operate with one register or list. “The areas of responsibility would be split up – there would be a list of domain names; a registry that would administer the list and a number of registrars, that could sell domain names to anyone who wanted them.” Abley wanted to see Domainz act only in one role or the other, either as keeper of the registry on which all domain names were listed, or as a reseller of services to those name holders but not both.
Patrick O’Brien believed the key issues boiled down to whether you had a thick or thin registry model. The ‘thick registry model’ meant registrant and registrar details were held in the same database. This was the model established in July 1996 when the agreement was struck with Waikato University, and under which ISOCNZ contracted Domainz to run the dot.nz space. The ‘thin registry model’ essentially came out of the ICANN process, originally created for the dot.com space, where only details of registrars were maintained, and they in turn managed details of registrants.
The religious war about thick and thin, and several variables in between, touched on fundamental beliefs about what was appropriate for dot.nz, and first came to the surface during early meetings at Waikato University over who would manage the domain name process and how. O’Brien insisted Domainz, created by its sole shareholder ISOCNZ as a ‘legal and commercial firewall’ to its members, had become an easy target, particularly through the period of changes to the licensing.
A motion to adopt a shared registry system was initially ‘heavily voted down’ at the 1999 ISOCNZ AGM. A working group was established to investigate shared registration systems and other registry models. The SRS Working Group, Rick Shera, Steven Heath, David Farrar, Don Stokes, and chairman Professor John Hine of Victoria University of Wellington, was eventually established on 31 March 2000 and consulted with hundreds of people within the Internet community. This was largely a listening process, which reviewed the issues and the best overseas models.
Eager to be rid of the remaining portions of DNS management which it was still managing on contract for ISOCNZ, Waikato University had set an initial deadline of April 2000. Eyebrows were raised across the community as Domainz Glazier-Advantage DRS implementation came perilously close to deadline. Concurrently there were public meetings in Auckland and Wellington and a process for submissions on the future approach. The clear consensus throughout was that the current model wasn’t working well.
This was confirmed when the .nzRegistry, ‘down for maintenance’ for a maximum of four to eight hours in May 2000, remained off the air for three days after further problems were encountered. People couldn’t register new domain names or make changes to server details during that time. By the time the new Domainz registry system was up and running in August 2000, it was now allegedly costing $750,000 and at the centre of a huge controversy. “People said it was way over budget but it wasn’t; it was just that we spent more money than intended because we were forced to stay with Waikato for three months longer while we sorted out some bugs,” recalled Jim Higgins.
There were wide-ranging views about how things should be done and while many discussions had the air crackling, other opinions suggested more arcane outcomes. While not necessarily in a form that would easily translate into a motion at an InternetNZ meeting, Perce Harpham’s contribution certainly gave pause for thought. Harpham, technology industry visionary, Computer Society Fellow, and regular attendee at InternetNZ meetings, believed the system of domain names in New Zealand was unnecessarily complex, and he was uncomfortable about the way Domainz was handling things. In a submission to the Ministerial Inquiry into Telecommunications, he indicated it might be preferable, for the preservation of the dot.nz domain space, that it be owned by government rather than a private organisation.
Meanwhile the SRS Working Group, which had been established to review the registry options for the future, had put forward nine specific recommendations to the council about the need to remove the registry from Domainz so that it became both a registry and registrar, with the registry having no contact with the end user. The council didn’t reject the report, but did reject the recommendations as premature, ordering they be struck from the report that went to the AGM.
Long-serving ISOCNZ council member David Farrar was among those who wanted to see the monopoly position of Domainz significantly reduced. He described the new registration system and the technology used to manage it, as a disaster. “They didn’t carry their clients with them, they didn’t test it properly, the project management structure was absent and the registry was down for two or three days as they tried to transition. There were over 100 faults reported and Domainz weren’t even keeping a list of them. People, including myself, started to keep a list of the faults publicly and that was probably the final straw that made people switch to the mindset that we had to change it.” Farrar said a number of committee members were determined to get their way and inserted the recommendations for a shared registry in the general business section of the agenda for the forthcoming June 2000 AGM.
Outburst becomes catalyst
Many of the early Internet community boffins were not the type to keep their opinions to themselves. If they had a beef about something they would discuss it openly and often fiercely on relevant newsgroups and mailing lists. Anyone logging on would be met with a tirade of concerns, complaints, and criticisms often expressed in ‘inflammatory and intemperate language’ deriding ISOCNZ, Domainz, various members of either group, and often specifically, Patrick O’Brien.
Several journalists regularly logged on to observe the chaos, knowing that certain threads would provide ready-made copy, which served to fuel wider concern about the internal politics of Internet governance in New Zealand. As well as the petty exchanges, there were genuine disputes, policy issues that needed addressing, and confusion as everything transitioned from the virtual anarchy of old. ISOCNZ was so frustrated with how its was being perceived, largely through the newsgroup postings and subsequent media coverage, that it even hired a PR firm to advise it on how to improve its image, to little avail.
Then four years of frustration seemed to come to a head with an acrimonious outburst from Manawatu Internet Services founder Alan Brown, who targeted his angst at Patrick O’Brien in the ISOCNZ mailing list. The resulting defamation court case seemed to catalyse support for Brown, not necessarily because he was the most likeable character, but because the legal action seemed to strike at the heart of the central premise of the on-line community, namely freedom of speech. While it had long been known that the same law that applied on terra firma also applied to cyberspace; and several individuals had been warned about the fine line they were treading, no one had been foolish enough to test it. Alan Brown had been riding the line for some time, then stepped way over.
Some say the court action initiated by Domainz on behalf of its chief executive was the point where much of the Internet community lost confidence in Domainz, resulting in a greater solidarity among those who sought to overturn the old guard at ISOCNZ. Others simply saw it as a long-overdue response to frequent misuse and abuse of the open forum environment. Brown’s unfortunate post was essentially an over-reaction to a series of seemingly trivial events, chronicled by an over-zealous systems administrator in the belly of the WCC IT department. In September 2003 David Zanetti, Unix systems administrator and postmaster for the council, decided to post his side of the defamation story on Usenet and his personal blog.
Zanetti managed the WCC DNS entries and was listed as the technical contact for the wcc.govt.nz domain. In late 1999 Domainz embarked on a ‘data scrubbing exercise’ and sent emails to domain administration contacts, asking them to submit corrections. The domain information details had been updated two months previously to include Zanetti’s boss Jos Van Herk, who received the email. The contact details were correct, other than the need to replace a fax number. In his reply to Domainz, Van Herk indicated two changes should be made: the fax number and adjusting the name holder from Wellington City Council – ITS, to ‘WCC – IS,’ reflecting a simple shift in the business unit name.
Nothing more was heard until a confirmation email was sent to Van Herk a month or so later. The request for changes had slipped his mind so he passed the email to Zanetti with the comment that he couldn’t recall asking for any changes and was surprised anyone could have made them without using the council’s Domainz key. Zanetti then set out to determine who had requested the changes. He called Domainz on Wednesday 22 December 1999 but a customer service representative would only state it had been requested by the name holder Van Herk. He asked to speak to Patrick O’Brien, who wasn’t available. In the interim Van Herk recalled his reply to Domainz email. “I was reasonably annoyed with Jos at the time, and by the time Patrick called it was quickly sorted out that Jos had made the request.”
What Zanetti now regretted was his subsequent phone conversation with O’Brien and having posted his frustrations about the way the changes were handled on the ISOCNZ list. “Patrick was actually very helpful in resolving the problem, and I admit I was probably more combative than I should have been. I did mention the media but said I would be sorting out with the WCC what I’d be doing about questioning the standards publicly.” Near the end of the call O’Brien asked to speak to Zanetti’s supervisor. Zanetti alleges he sought Van Herk’s permission to post the details of the exchange and the perceived security problem that was highlighted to the InternetNZ mailing list. He insists permission was granted but that a disclaimer be added that these were his own opinions and not those of the WCC. “Jos did not mention that he’d actually agreed with Patrick that any further issues would be discussed with him first. I would discover that later.”
Zanetti said he wasn’t in the right mood to be making a posting as he was agitated by a series of events, so he headed home and later in the evening wrote the posting in a calmer, clearer mood. As requested, a disclaimer was added to his message before it was sent from his home address. Zanetti’s posting on 22 December outlined the series of exchanges and questioned the procedures of verification for domain name changes, considering this had been enabled through a simple exchange of emails. Didn’t that invalidate the use of Domainz authorisation keys and was there, in fact, high enough security at Domainz to prevent others from maliciously manipulating domain name details?
The next day, 23 December, Zanetti discovered that his overnight posting was the centre of a controversy. Patrick O’Brien had sent an email of complaint to Van Herk. Zanetti was hauled into his boss’s office and instructed to ‘cease all use of Internet discussion forums, both at home and at work.’ He’d been gagged. Zanetti admits he continued connecting with others in the Internet community through IRC. Among those he hung out with on-line was Alan Brown, who wanted to post about the gagging affair. “I made it very clear he was not under any circumstances to post about it. He did, and I expressed my annoyance to him, but he was far too involved in wanting to use my situation against Domainz.”
Before he left work Zanetti was asked to remove the Web page on the advice of council’s lawyers. “I explained it went to a mailing list, and then on to Usenet, and had no real way to expunge it. The request was dropped.” A further meeting was called at the WCC, at 9 a.m. on the morning of Christmas Eve 1999, to decide what the next step would be. He was met by his boss, his boss’s supervisor, and a human resources person. “A section of the WCC code of conduct was pointed out to me saying that that no employee will bring the WCC into disrepute, and I had done so by having a complaint made against me and the council. I argued that I had not done so, that I had only posted with permission, and that Patrick’s assertions about it coming from a WCC email address were clearly wrong.” At that point Van Herk insisted he had not given permission and that there had been a misunderstanding. “I was pretty gutted that when the chips were down my boss couldn’t recall if permission had been given … He was a good boss and whether or not I had permission or not made no difference really.”
Patrick O’Brien had requested an apology. Zanetti insists both the WCC supervisors agreed there was nothing the WCC should be apologising for and that the concerns raised in the posting were valid although they didn’t agree with the way in which they had been expressed. The human resources person however remained adamant that an apology must be made and the lawyers had already negotiated a chunk of it. They considered the threat of a defamation suit was serious and clear. “At one point the question was raised, why we were bothering with a supplier who we spent $50 with? The relationship with such a small supplier didn’t seem to make sense [to them] but I pointed out that not doing business with Domainz doesn’t give you a lot of options for holding a .nz name. ‘Of all the days, why’d you pick Christmas Eve!’ asked the HR manager.”
The apology was drafted for discussion with O’Brien following the meeting. Zanetti was then provided with a copy of the apology and asked to post it. Once that was done he was asked by members of the ISOCNZ list if he was under any pressure to make the post. “Well, bluntly, I am bound by my contract to follow reasonable instructions, and I didn’t feel like losing my job over this. Besides the HR manager had mentioned that I might want to keep a low profile, as ‘O’Brien seems to be gunning for someone,’ and that someone might be me if I was to aggravate the situation.”
O’Brien insists the offending posting wasn’t an isolated incident. There had been some earlier issues regarding employees and emails at WCC, which may well have influenced his strong reaction. However, talk of him being involved in a gagging, he said, goes too far. While Zanetti got off lightly, the day after his posting a response was made to his on-line statements by one Alan Brown. He questioned how long it would before O’Brien would stop wasting Domainz and ISOCNZ money ‘by again threatening baseless legal action in order to gag public criticism.’ He accused O’Brien of ‘barratry.’ He then proceeded to put his foot further into his mouth with a number of unpleasant descriptions of O’Brien and his motivations, which he claimed were not in the interests of the welfare of the Internet in New Zealand, concluding with ‘roll on the govt removal of the ISOCNZ/Domainz profit-driven monopoly.’
Dengate Thrush said the board of Domainz saw Brown’s actions as an attack on Domainz and its CEO that would only escalate if left unchecked, a move that was supported by most committee members. “It was a corporate decision made for business reasons to protect an employee. They felt that if they didn’t protect this CEO they’d never get another one.” Alan Brown was now facing defamation charges. If that wasn’t enough, Brown then reacted to the threat of action by scanning the statement of claim, which contained the original alleged defamation, and posting it on his own web site, then posting several more messages to the list. Other ISOCNZ members retrieved his original message and posted it to the society’s public mailing list and newsgroup, ensuring vastly wider distribution.
In December 1999, the first time ISOCNZ allowed on-line voting, the disquiet about Domainz was openly displayed, but a move by Zanetti to undermine its commercial base was dismissed, drawing comment on the ISOCNZ newsgroup.
Working from the inside
Keith Davidson from Wairarapa ISP Winz (later wize.net) had maintained a vague interest in the governance of the Internet from the mid-1990s. “I was quite taken with this idea being promoted by the ISOC that the Internet would be a tool for everybody whatever their maxim and that it was about the principles of sharing, open source, and all those concepts alien to someone coming out of the capitalist Murdoch empire. It was a different methodology and structure and it quite took my fancy so I kept a watchful eye on development and on the society.”
In 1998 Davidson decided to get involved, stood for council and became the second ISOCNZ treasurer. Some aspects about the structure of the registry, including the monopoly over the dot.nz space, and the direction of the organisation were of concern. “I thought, ‘Its no good arguing from outside; you’ve got to get inside if you want to help shape these things.’ Bigger registrars got a bigger pricing break and I was thinking, ‘This should be a level playing field where everyone’s treated the same, so that there’s no barrier to entry.’”
Even as treasurer, his concerns increased. “From a financial perspective I couldn’t get access to information from Domainz. I would only get a copy of the annual report at the annual general meeting. I was thinking, ‘Now we’re the 100 percent shareholder and I’m the treasurer, so why can’t I see our subsidiaries’ figures until after AGM? Why the need for such secrecy? Where’s our commitment to openness and transparency?” He believed the ‘secrecy’ was simply Domainz director Patrick O’Brien’s method of business; to him information was power and he didn’t want to share that, he wanted to keep it as close as possible. “There was no doubt he was under pressure but I think his DNA was more suited to the corporate world, where you never reveal any information unless you had to; unless you were standing in court or under obligations to the stock exchange.”
Davidson wanted to turn that traditional model on its head and put everything in the public arena unless there was a good reason for confidentiality. He and a number of others on the ISOCNZ council, with growing support from the wider Internet community, were tiring of the endless debates about Domainz and the technology for managing the registry.
 Position paper: Domainz, the New Zealand Internet Registry Ltd, ISOCNZ inc for governance in the .nz DNS, prepared by Patrick O’ Brien, CEO Domainz, March 1999
 ISOCNZ was formed in November 1995
 Russell Brown, interview with Jim Higgins and Patrick O’Brien, Friday Fry-up, Computerworld, 12 August 1997
 Council meeting, 14 November 2006, elected Jim Higgins as chairperson. Donald Neal was re-elected as secretary and Colin Jackson as treasurer. All of the officers were elected unopposed. Source: http://www.Internetnz.net.nz/proceedings/agm/archive/1996/agm96election-results.html
 A reference to Telecom Xtra’s advertising campaign to win over Internet customers
 Ruling the NZ domain, Infotech Weekly, 13 December 1999
 Aardvark article by Bruce Simpson, 17 March 1997
 Aardvark, 14 January 1997
 Aardvark, 20 January 1997
 Aardvark, 4 February 1997
 Stephen Bell, ‘The keeper of the keys’
 Russell Brown interview with Jim Higgins and Patrick O’Brien
 ISOCNZ AGM minutes 1998/99
 Stephen Bell
 Russell Brown
 The Lawlink Group Ltd and article at http://www.findlaw.com/12international/countries/nz/articles/1184.html
 NZ Herald, 28 July 1998
 Previously unpublished quote from 1998 interview
 Keith Newman, ‘Net’s future management dominates conference,’ NZ Herald, 4 August 1998
 Patrick O’Brien posting on nz.org.isocnz newsgroup 7 October 1998 in response to questions from Peter Mott and David Farrar
 Position paper: Domainz, the New Zealand Internet Registry Ltd, ISOCNZ inc for governance in the .nz DNS, prepared by Patrick O’ Brien, CEO Domainz, March 1999
 ‘Ruling the NZ domain,’ InfoTech Weekly, 13 December 1999
 Domainz AGM minutes 1999
 Adam Gifford, ‘Domainz takes flak after server failure,’ NZ Herald, 14 March 2000
 Paul Brislen, ‘Alternative registry model put up against Domainz plan,’ Computerworld, 13 March 2000
 MOVED : (Farrar/Heath) That ISOCNZ Council set up an open working group to investigate a full proposal on possible shared registration systems and other registry models after consultation with Domainz. CARRIED : 6. Abstentions: Harris, Vorstemans, Adlam, Higgins, P Dengate Thrush, Scott” Minutes at http://www.Internetnz.net.nz/proceedings/agm/archive/1999
 Computer industry visionary Perce Harpham started the country’s first software development company in 1968 then pushed computer-based learning through his own purpose-built Poly computer. In the mid-1980s his educational computing company Progeni was on the verge of pulling off a major deal with the Chinese government when it collapsed
 Material sourced from Zanetti’s blog: http://hairy.geek.nz/2003/09/07/background-to-alan-browns-defamatory-post/, and Google’s archive of Usenet, where the mailing list in question was gated to