Improper collection of domain name fee by Taiwan Network Information Center
Chinese Taipei
Case:
Improper collection of domain name fee by Taiwan Network Information Center
Key Words:
internet, domain name, website
Reference:
Fair Trade Commission Decision of November 25, 1998 (368th Commission Meeting); Letter (87) Kung Yi Tzu No. 8700477-005
Industry:
Telecommunication Industry (6320)
Applicable Laws:
Article 10 of the Fair Trade Law
Summary:
According to the complaint, the Taiwan Network Information Center (TWNIC) is the only domain name registrar in Chinese Taipei. Originally, the application for registering domain name was free of charge. The TWNIC, however, started to collect a "domain name user fee" of NT$250. Such an act is tantamount to monopolization. According to the Fair Trade Commission’s (this Commission) investigation, the TWNIC, which currently consists of 47 members, is a sub-organization of the Computer Society. Its directors include representatives from: (1) Computer Center, Ministry of Education, (2) Highspeed Computer Center, National Science Council, (3) Chung Hwa Telecom Co., and (4) Institute for Information Industry. The supervisors include representatives from: (1) Research, Development and Evaluation Commission in the Cabinet, (2) Directorate General of Budget, Accounting & Statistics in the Cabinet and (3) National Science Council in the Cabinet. The TWNIC's business activities include the allocation and registry of website domains and domain names ending with ".com", ".org", or ".net", and the promotion of inter-network connection and related international exchange matters. The domain name registry matter handled by TWNIC is authorized by the APNIC and the INTERNIC. Prior to October 1997, services provided by the TWNIC were free of charge. However, in consideration of maintaining its normal operation and the pay-to-use principle, it was resolved by the TWNIC's board of directors and supervisors that a registration fee of NT$500 and an annual fee of NT$1,000 should be collected from registrants of domain name ending with ".com", ".org", or ".net".
The Commission consulted with the National Information Infrastructure Steering Committee (NII Steering Committee), whose opinion is summarized as follows:
In order to meet the rapid growth of the Internet and its sound development in the future , the network information center plays a key role in terms of its purposes and function. The NII called a meeting between the Computer Center (Ministry of Education), Directorate General of Telecommunications (Ministry of Transportation and Communication) (DGT), and the TWNIC on April 15, 1998. In the meeting, it was resolved that the network information center should be a non-profit corporate foundation which is officially credible and authoritative. Since the competent authority of the Internet is the DGT, it is determined that DGT will be responsible for organizing a corporate foundation to operate a network information center. Currently a committee formed by impartial members is responsible for the related work. The DGT and the TWNIC are joining hands to tackle the preparatory work of organizing a corporate-foundation information network center. Consideration is being given to refund those domain name fees which the TWNIC has collected.
This Commission convened a seminar for opinion exchanges regarding Issues Relating to the Registry of Domain Names and Websites on October 1, 1998. Scholars, experts and representatives from related agencies were present to discuss problems arising from the allocation of domain names and websites, the planning of relevant administrative measures, and whether mechanisms ensuring competition should be introduced into the business of domain name and website registry. Most of the scholars and experts present in the seminar agreed that the registrant should pay to register. It was agreed, however, that the role of the TWNIC should be more clearly specified and that it should be operated as a civilian organization.
The 368th Commission Meeting reached a decision which is summarized as follows.
The TWNIC provides domain name and website registry services and collects fees for its services. It is an independent entity continuously engaged in economic activities which meets the definition of "enterprise" under Article 2 of the Fair Trade Law (FTL). Therefore, it is subject to the governance of the FTL. The structure for the management of domain name and website registry is hierarchical in nature: basically, INTERNIC is in charge of overall worldwide planning; APNIC is responsible for the Asia-Pacific region; and TWNIC handles the registry in Chinese Taipei. Due to this special management structure, user of domain name ending with ".com.tw", ".net.tw", and ".org.tw" can only register their domain names through TWNIC. Nevertheless, as the Internet is an emerging channel for information flow in which boundary is unknown to the users, for those economic activities occurred therein, it is inappropriate to apply the conventional geography or state-based approach to define their relevant markets. Although the TWNIC is the only registrar providing domain name and website registry service in Chinese Taipei, users may still register their domain names and website with the upper level registrars, i.e. the APNIC and the INTERNIC, through the Internet. Therefore, the TWNIC is not the sole registrar of the Internet market in Chinese Taipei. Currently, the pay-to-register system is widely adopted in the world for the registry service regarding domain names ending with ".com", ".net", and ".org." To be in conformity with the pay-to-use principle, the TWNIC decided to collect fees from the registrant. Insofar as it does not engage in any activities that may restrict competition or result in unfair competition, it will not be held to have violated the FTL for TWNIC to collect registration fees. Nevertheless, to avoid the recurrence of similar disputes and to cope with the universal trend of introducing mechanisms ensuring competition into the market of domain name registry, this Commission makes the following three points which may serve as references for the competent authority to manage the industry:
(1) Registry of domain names and the allocation of website are by nature exercises of official power. If such services are undertaken by the private sector, the responsible entity should be a non-profit organization with official credibility. In addition, there should not be any restriction on competition.
(2) Since the TWNIC is the only local registrar of domain names ending with ".com", ".net", and ".org", its collection and management of the registration fees should be supervised by the competent authority.
(3) The TWNIC currently provides both the registry and the registrar services. In order to effectively introduce mechanisms ensuring competition into this market, these two services may be separated and the registrar service be provided by other persons.
Summarized by Liao, Hsien-Chou
Supervised by Hsin, Chih-Chung