Muscovitch: Canadian ccTLD Registry Rules in Need of an Overhaul

by Zak Muscovitch

[In this guest article, Zak Muscovitch argues that the .ca domain name needs to be liberalized. Muscovitch is a domain attorney who is running for a seat on CIRA’s 2010 Board of Directors. -Andrew]

While many countries such as the United Kingdom, Germany, and India, have opened up their ccTLD registries to foreigners, the Canadian Internet Registration Authority (“CIRA”) has been stuck with the same closed-door policy since it enacted its “Canadian Presence Requirements” in 2003.

CIRA’s Canadian Presence Requirements (“CPR”) make it exceedingly difficult for those residing outside of Canada to register a .ca domain name. According (pdf) to CIRA’s CPR, “CIRA is committed to reviewing these Canadian Presence Requirements from time to time in order to ensure they remain in the best interests of Canadians and the .ca registry”. An election is now underway for the Board of Directors of CIRA, and a re-examination of CIRA’s “Canadian Presence Requirements” should be a primary topic of debate throughout the election, with a view to finally making some substantial policy changes afterwards.

In a new study (.doc) of 12 ccTLD’s by DNattorney.com, we have concluded that Canada has one of the most restrictive presence requirements of any registry. It requires, inter alia, a prospective registrant to have a registered Canadian trademark or Canadian/provincial corporation, thereby closing the market to those who wish to easily expand their business into Canada or invest there.

The only country of the 12 reviewed, which appears to have more onerous restrictions on registration requirements, is China. China excludes all overseas registrations of their .cn domain name. By excluding all overseas registrations, they have severely restricted their market. This is evident, according to the Domain Name Industry Report 2009 (pdf) conducted by Nominet, which takes note that subsequent to the .cn registry restricted foreign registrations, the “growth in Chinese domain name has not continued, resulting in ccTLD growth rates falling”

While countries such as the United States and Australia permit registration by organizations, individuals and trademark holders who reside outside of the country but engage in activities within the country (such as trade, the buying and selling of goods or providing services to customers), Canada’s policy falls far short in comparison. It requires a Canadian corporation or Canadian trademark registered in Canada, even if the foreigner does business in Canada.

By requiring a registered trademark or corporation within the country before .ca domain name registration is permitted, CIRA limits its market and potential for investment in Canada. According to a study (pdf) conducted by EURid, the registry for the European Union, registration of ccTLD’s significantly increased with the liberalization of domain name policies. According to the EURid study, after Spain “liberalized [its ccTLD policy] in June 2005, its registry grew from 85 000 registrations in 2004 to 1.2 million in 2009”. Countries that employ a more progressive and liberalized approach to domain name registration appear to have higher domain name growth rates.

Overall, India and the Netherlands hold the most progressive approaches by providing very little restriction on domain name registration and permitting any party worldwide to register the .in and .nl ccTLD’s, respectively. According to the SIDN, which is the Netherlands’ registry, this progressive approach appears to be beneficial; .nl has become the fourth largest country code top level domain name in the world, with 4 million domain names registered, only appearing behind domain name giants such as Germany, the United Kingdom and China. It is predicted by SIDN, that at this rate of growth “we should see the five- millionth .nl domain name within the next few years.” This massive growth rate is not by coincidence; it is directly attributable to liberalized registry policies.

Many countries within Europe such as Germany and the United Kingdom, who have engaged in more progressive approaches towards foreign domain name registrants, have seen vast growth in registration. In Germany for instance, all that is required for registration is a VAT number, an administrative contact and postal address. According to Nominet (pdf), with these few restrictions, Germany’s ccTLD has “continued to see [a] steady growth and regained its position as the largest ccTLD by volume” surpassing that of even China (which has actually decreased).

The approach of Germany, India and the Netherlands to ccTLD registration appears to be a model that CIRA should at least consider. By looking at the vast growth rates of registration amongst these countries, in such short periods of time, and their position in the global market, it appears that Canada and CIRA are currently at a disadvantage. Patrick Pichette, the CFO of Google said it best; “Every company now is global… Canadian companies [shouldn’t] miss the boat because we’re not set up [globally].” Mr. Pichette’s words about Canada lagging behind in the digital economy apply equally to Canada lagging behind in the registration of domain names. According to the Domain Name Industry Brief by VeriSign, Canada fails to even make it within the top 10 ccTLD’s by number of registrations. It lags behind Brazil, Italy and Poland. Clearly it has work to do. Although .ca registrations appear to be on an admirable “upward trajectory” according to CIRA CEO, Byron Holland, who has led this charge, when compared to other ccTLD’s, Canada clearly has an opportunity to greatly expand its registry. This will come, largely through liberalization of the registry together with greater promotion of the ccTLD.

Muscovitch’s campaign web site is zak-for-cira.ca. He prepared this article with the assistance and research of Natalie Ledra of DNattorney.com. You can download the ccTLD Foreign Registration Comparison Study here (.doc).