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Why Overseas Registries Shouldn’t Worry About China’s New Domain Name Regulation

On March 25th, 2016, the Ministry of Industry and Information Technology (MIIT) officially posted its revisions to the “Chinese Measures for the Administration of Domain Names” (2016 edition) for public comment. A decade has gone by since the latest administration measures were introduced in 2004 (2004 edition). Registries and registrars have been longing to see this update for a while, and it is therefore no surprise that the new edition has drawn substantial attention at home and abroad.

It is understandable that different stakeholders of the domain name industry—registries, registrars, registrants, and even hosting providers—may have different opinions and concerns regarding the new regulation. This article will focus on the provisions for registry licensing. First and most important, the establishment of registry operators in the territory of the People’s Republic of China must obtain a license from MIIT, which has not changed in the 2016 edition from the original 2004 regulation. Second, when it comes to application requirements for MIIT approval, the 2016 edition lists them in detail in Article 11, while the 2004 edition does so in Article 12. It is worth also noting that Article 11 combines some items listed in Article 14 of the 2004 edition. The following table compares the similarities and differences between the two editions.

2004 Edition (Article 12)2016 Edition (Article 11)Comparison
(1) [The registry] shall set up top level domain name server (excluding a mirror server) within the PRC, and the corresponding top level domain name shall comply with the global and domestic domain name system;(1) The top-level domain name management system is to be set up within the PRC, and the top-level domain names they hold are to conform to relevant laws and regulations as well as the requirements of the safe and stable operation of the domain name system;“Top-level domain management system” in the 2016 edition replaces “top domain name server” in the 2004 edition.
(2) [The registry] shall have funds and professional personnel suited to engaging in activities related to domain name registration;(2) [The registry] shall be legal persons lawfully established within the PRC, the said legal persons and their main investors, and main operational and management personnel shall have good credit records;The requirements for a legal person is contained in Article 14 (1) of 2004 edition, but the 2016 edition removes the requirement of registered capital. In addition, edition 2016 adds the requirement of “good credit records” for the main personnel.
(3) [The registry] shall have good performance and experience in conducting domain name related businesses;(3) [The registry] shall have sound business development plans and technical plans, as well as premises, funds and professional personnel suited to engaging in top-level domain name operations and management, as well as information management systems conforming to MIIT requirements;Line (3) of the 2016 edition is basically the same as lines (2) and (5) of the 2004 edition.
(4) [The registry] shall have the credit standing and ability to provide customers with long-term services;(4) [The registry] shall have complete network and information security protection measures, including management personnel, network and information security management structures, emergency response processing plans and corresponding technological and management measures, etc.Line (4) of the 2016 edition is basically the same as line (6) of the 2004 edition. It is basically the same but refined on “sound network and information security measures”.
(5) [The registry] shall have business development plans and relevant technical plans.(5) [The registry] shall have the capability to engage in real name verification and users’ personal information protection, and the capability to provide long-term services as well as sound service withdrawal mechanism;Line (5) of the 2016 edition adds requirements regarding capabilities for “real name verification” and “personal information protection.” Moreover, long-term services and service withdraw mechanisms are basically the same with Article 12, Line (4) and Article 14, Line (6) of the 2004 edition.
(6) [The registry] shall have sound monitoring mechanism on the registration service and safeguard measures regarding networks and information security;(6) [The registry] shall have sound domain name registration service management systems and monitoring mechanisms for registrars;Basically the same. The 2016 edition has a new requirement regarding “domain name registration service management systems.”
(7) [The registry] shall meet other conditions prescribed by the state.(7) [The registry] shall meet other conditions provided in laws and administrative regulations.Basically the same.

Excepting for subtle differences in statements, word selection and the order of the sentences, any overseas registry operators intending to enter into the Chinese market should pay special attention to essentially four aspects. First, one million CNY in registered capital is no longer a requirement for registry approval. Second, the “TLD management system”, a term with broader scope in the new edition, replaces “TLD name server” in the old regulation. The exact meaning of the term is defined for the first time. The TLD management system, according to the regulation, includes the shared registration system, registration database, domain name system, WHOIS system, and real name verification system, etc. Third, registry operators are explicitly required to have the capacity for real name verification. This is a confirmation of the practices that have already occurred in reality. Fourth, the new edition states that a registry license will be valid for 5 years (Article 16). Overall, the revised edition of the regulation provides a more explicit and specific guideline for registry license applications. The requirements are not only reasonable but also practical for all applicants.

Over the past half a year or so, all overseas applicants we know have prepared their application materials strictly in accordance with the new edition of these regulation. The release of the request-for-comments regulation will ensure that what they have done is correct. As we have emphasized in other places, the most critical thing for foreign registry operators is to find the right partner in China that can satisfy the requirements of the TLD management system. As the number one New gTLD market, the Chinese domain name market is still booming. We have no doubt that new registry players will be allowed to engage in it soon, which will certainly make it a better place.

By Jian Chuan Zhang, Senior Researcher at KNET and ZDNS

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