It nearly goes without saying that if “.CA” means and should continue to mean, “Canada”, the registration of a .CA domain name ought to involve some tie to Canada. As Canadian Internet Registration Authority (“CIRA”) CEO, Byron Holland, aptly put it, “The fundamental requirement of having a Canadian presence in order to get a dot-ca domain name make sense…because it is a country code and there is an assumption that there is some “Canadian-ness”. And that is why, in a nutshell, I support a Canadian ‘presence requirement’ for the registration of .CA domain names. Nevertheless, the question of what constitutes an appropriate ‘presence requirement’ is an interesting issue, and one which deserves some attention and debate. CIRA’s Canadian Presence Requirements (“CPR”) have held up generally well over the past ten years, but nevertheless, certain aspects of the CPR deserve a review.

The CPR has not undergone any changes for over seven years, since June 5, 2003. To put this in perspective, back in 2003, only about 10% of the world’s population was online, and now it is nearly 30%. Canadian Internet usage has also risen, from about 63.8% penetration in 2003, to over 75% in 2010. In 2003, there were only 333,256 .CA registrations, and now in 2010, there are nearly 1.5 million. Facebook was not even launched until February of 2004. In case you have forgotten where you were in 2003, it was the same year that the space shuttle Columbia was lost. This was a long time ago, and was ‘ages’ ago, by Internet standards.

But CIRA’s CPR actually went into effect much earlier; originally on November 8, 2000, and only subsequently underwent minor revisions in 2003. In 2000, the state of the Internet was a whole other story. In December of 2000, there were only 60,000 registered .CA domain names. The increase in .CA registrations has grown alongside the growth of Internet usage in Canada. Internet usage (as a percentage of total population) in Canada was only 40.3% in 2000. In 2000, Google had only recently moved out of their garage office and into a real office. Once again, to put the year 2000 into perspective, this was the year of the Florida election debacle and the year the ‘dot-com bubble’ burst. A very long time ago…

CIRA’s CPR expressly states that “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”. Considering the foregoing, it may be that ‘time to time’ should be now.

From my consultations with CIRA members and .CA domain name owners, the consensus view appears to be that people, of course want the .CA registry to remain ‘Canadian’, meaning that the registry should continue to be committed to Canadian presence requirements, and indeed this does appear to be in the public interest. But can the registry remain Canadian and still undertake a review of the CPR in order to ascertain whether any updates are possible or required? Surely the answer to this question must be, “Yes”, as there is hardly a policy, let alone an Internet-related policy, which cannot sustain some examination after the passage of ten years. Moreover, although I support Canadian presence requirements, there is ample evidence of areas within the CPR which are of concern and should be reconsidered. During the 2010 election for CIRA’s Board of Directors, I hope that these issues will be considered by all concerned, with an open mind. The following are some of my concerns regarding the current CPR which I believe should be addressed.

The ‘Canadian/Provincial Corporation’ Category

Pursuant to Paragraph 2(d) of the CPR, “a corporation under the laws of Canada or any province or territory of Canada” may register a .CA domain name. In law, a corporation is considered a legal person, so a Canadian corporation is treated the same way as a Canadian individual, i.e. both are permitted to register a .CA domain name.

As a result of Paragraph 2(d), anyone, anywhere in the world, can incorporate a corporation in Canada and thereby gain the right to register a .CA domain name. In British Columbia, New Brunswick, Nova Scotia, Prince Edward Island, and Quebec there are no residency requirements for directors of a corporation, thereby enabling a foreigner to incorporate by merely using a registered address for service, and not actually being Canadian or even having a single director or shareholder being Canadian.

Accordingly, Paragraph 2(d) of the CPR is a wide-open doorway for any foreigner to register a .CA, provided that they can pay the several hundred dollars in provincial government filing fees, any legal fees, and file annual tax and corporate returns. This is a small hoop to jump through for foreign companies and individuals who are willing to pay the entrance fee. The question then arises, if the CPR requires a “Canadian presence” in order to maintain “Canadian-ness”, why permit such a category to exist? The reason, ostensibly, is that a legal provincial corporation has the same legal rights, for the most part, as a Canadian individual, as aforesaid, and it is far beyond the jurisdiction of CIRA to change corporate law in Canada.

Nevertheless, if the CPR only requires, in essence, a registered address for what is really a foreign domain registrant in substance, how does this really keep the registry Canadian? If this is all that it takes to be considered to have a “Canadian Presence”, i.e. a registered office address, then why maintain this facade at all? Why not forego the requirement for a corporation altogether and merely require the registered address in order to qualify as a “Canadian Presence”? The only difference between the two approaches is a payment to the provincial government of several hundred dollars to incorporate. This is an issue that should be discussed if and when a review of the CPR occurs.

A Real Canadian Presence Means Activity in Canada

Perhaps the main consideration in determining a Canadian presence should not be something as artificial as a registered address alone, but rather whether there is a bona fide intention, or actual, activity in Canada. Bona fide ‘activity in Canada’ seems to be a much better gauge of whether a Canadian presence exists. This is the approach taken by some other national registries. 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).

The Canadian government’s mandate to CIRA was to operate the registry as “a key public resource, helping to promote the development of electronic commerce in Canada and important to our country’s future social and economic development”. Accordingly, does the CPR, in its current form, with regard to Paragraph 2(d) in particular, operate in accordance with the public interest? A real question is raised here since Paragraph 2(d) appears to favour a facade of “Canadian Presence”, instead of a genuine Canadian presence that is contingent upon bona fide and actual activity in Canada. A genuine Canadian presence, e.g. economic activity in Canada would appear to promote Canada’s mandate to CIRA, which is at least in part, is to promote the development of economic commerce in Canada.

Certainly, the aforementioned mandate to CIRA plainly states that the development of electronic commerce in Canada is an important policy objective, but where the debate lies, is whether the development of electronic commerce in Canada is best served by a more isolationist approach, or by a globalized approach.

People who favour the more isolationist approach would interpret CIRA’s mandate to help develop electronic commerce in Canada, as obligating CIRA to restrict the use of the .CA, as a Canadian resource, to Canadians, as much as is possible. As such, favouring Canadians’ use of the .CA ccTLD to the exclusion of foreigners is seen as the best way to ensure that Canadians have free and uncompetitive access to the ccTLD, thereby allowing Canadians’ use of the Internet to flourish, and enshrining the Canadian-ness of the ccTLD so that it is consistently identified with Canada and Canadians.

On the other hand, people who favour a more globalized approach would interpret CIRA’s mandate to help develop electronic commerce in Canada, as obliging CIRA to permit non-Canadians to register a .CA provided that they are actively involved in electronic commerce in Canada, such as the provision of goods or services via the Internet to Canadians. As such, the nominal “Canadian Presence” required by Paragraph 2(d) is seen as an unnecessary barrier to trade and commerce that inhibits the development of Internet commerce. Supporters of this view are not concerned that allowing foreigners who trade with Canadians will dilute the Canadian-ness of the .CA ccTLD ‘virtual real estate’ any more than allowing foreign business to buy or rent actual Canadian land.

Free Trade or Certain Restrictions on Trade?

The isolationist-globalization debate is nothing new in Canada. It perhaps reached its apex during the lead-up to the North American Free Trade Agreement (“NAFTA”). NAFTA came into effect on January 1, 1994. The purpose of NAFTA was to promote fair competition and eliminate barriers to trade. As stated in NAFTA’s objectives, at Article 102(a), the purpose of NAFTA was, inter alia, to:

• eliminate barriers to trade in, and facilitate the cross-border movement of, goods and services between the territories of the Parties;
• promote conditions of fair competition in the free trade area; and
• increase substantially investment opportunities in the territories of the Parties.

Article 1204 of NAFTA states that:

No Party may require a service provider of another Party to establish or maintain a representative office or any form of enterprise, or to be resident, in its territory as a condition for the cross-border provision of a service.

It is no surprise, that in 1994 when NAFTA was implemented, there was no mention of the Internet as an area or industry that Canada intended to maintain protections over, from a Canadian cultural or identity perspective; the Internet, as we know, simply it did not exist. Had it existed, it may well have been listed in Annex I to NAFTA, which set out Canada’s reservations of existing measures and liberalisation requirements, i.e. areas that Canada was carving out from NAFTA, for various reasons. Furthermore, had CIRA existed in 1994, it may well have asked the Canadian government to specifically list the ccTLD as an area that Canada wanted to maintain as a “non-conforming measure”.

Nevertheless, the .CA ccTLD was of course not shielded from the liberalisation of trade practices that NAFTA espoused, and NAFTA became the law of Canada. As such, an interesting question exists as to whether CIRA’s CPR are currently in accordance with NAFTA. From a review of Article 1204, supra, a foreign person that wants to offer services to Canadians must not be met with obstacles to trade, such as residency or maintenance of an office. This sounds an awfully lot like CIRA’s CPR. Nevertheless, it may be argued that such a foreign person may offer services to Canadians freely, whether the foreign person has a .CA or not, since the foreign person is able to offer such services over the Internet from any number of TLD’s, therefore no violation of Article 1204 in fact exists. Nevertheless, Article 1102 might then come into play, as this provision prohibits Canada from treating American or Mexican investors any differently than Canada treats its own investors, and the CPR does intentionally discriminate against non-Canadians.

Whether the CPR breaches provisions of NAFTA or not, the issue of the most appropriate approach to CIRA’s mandate to help develop electronic commerce in Canada is a subject that deserves debate and discussion. There are good arguments on both sides of this issue, with all view points directed at helping to develop electronic commerce in Canada.

Enforcement

The issue of enforcing the CPR also deserves some attention. For any Canadian presence requirements to be effective, they must of course be enforced. When CIRA enacted its new Whois Policy on June 10, 2008, the ability of the Canadian Internet community to police the CPR nearly evaporated overnight. No longer would individual Canadian Internet users be able to see Whois details in most cases, and therefore would be unable to report violations of the CPR. This was an unintended consequence of the new Whois Policy, and unfortunately contributed to widespread violations of the CPR which could only be detected by CIRA’s staff, with limited resources. Accordingly, any discussion of a review of the CPR must necessarily also involve how the Whois Policy operates to decrease enforcement and increase violations.

Furthermore, anecdotal evidence from .CA registrars and Canadian Internet users suggests that violations of the CPR are occurring on a massive scale, and go largely undetected. Unlawful .CA registrations are occurring as a result of individuals using fraudulent registration details, and also as a result of unlawful proxy services. The evidence of this is easily ascertainable on the Internet. Many users of these proxy services are even unaware that the proxy service is non-compliant with CIRA regulations and policies. Accordingly, I believe that any discussion of the CPR must necessarily also focus on the degree of effective enforcement available.

Disclaimer: I am running for election to the single public seat currently available on CIRA’s 2010 Board of Directors. I would appreciate your support so that I can continue to raise issues of public importance for the betterment of CIRA and the Canadian Internet community. My campaign web site is http://zak-for-cira.ca/. You can read about by background at http://www.dnattorney.com.