In an effort to further put forward the Chinese Internet Network Information Centre (CNNIC) as the de-facto Chinese domain name registrar for the country, the Chinese Government set new registration rules for the industry, the day before Network Solutions (NSI) officially accepted Chinese domain name registration worldwide.
On November 9, China's Ministry of Information Industry (MII) issued a notice on Chinese domain name management in the nation. The key thrust of the notice stated that the activities conducted by those Chinese domain name registrars and resellers not authorised by the Ministry are against the regulation.
Chinese domain name registration service providers that are not authorised by the MII refers to NSI and its affiliates, according to industry observers.
"The news did not come as a surprise," said Gary Lai, chief operating officer of Hong Kong-based Chinese Domain Name (C-DN), a registrar for both CNNIC and NSI.
"Though the tone of the Chinese Government sounds harsher this time, they are basically reiterating the same message [that a Chinese organisation should take responsibility for Chinese domain name registration and management]," he added.
Not wishing to be seen as against the regulation, Lai said his company will adopt a wait-and-see attitude for the time being.
"After all, it's an announcement only. It doesn't necessarily mean enforcement," he added.
C-DN will continue to take applications, but whether or not the company will go ahead and register those applications with NSI remains undecided, according to Lai.
"The resolution process (when domain names are translated into IP addresses for public access) will not be done for at least a month, and we're not sure whether there will be more delays like before, we're holding on to the applications and seeing how things develop," he said, adding that applicants are fully aware of these conditions.
Lai said the regulation has not been set in stone yet, and it is still possible for CNNIC and NSI to arrive at some sort of amicable agreement over the registration issue. If the Chinese Government enforces its stance against Chinese domain name registration with NSI, C-DN will respect that directive since its core business is with CNNIC, according to Lai.
Currently, Chinese domain name registration with C-DN is conducted online. The company does not have any physical presence or conduct any activities within mainland China's borders, according to Lai.
Another Chinese domain name reseller for NSI, Sinonets, which is based in Beijing and promotes Chinese domain name registration within the country, doesn't feel threatened by the MII notice.
"As long as the Government has not made a clear decision on Chinese domain name registration, we will continue with our business," said Kang Long-jiang, head of marketing of Sinonets.
Kang said the MII notice is, in fact, informal, and if it is to be enforced, then the company will receive a formal notice directly from the Government.
"If you come into our office, you will see how overwhelming the response is. Every day there're just so many people lining up here to register for Chinese domain names. To be responsible to our clients, we cannot stop our services now," Kang said.
Meanwhile, Gartner Group is issuing recommendations on how its clients can proceed.
According to Louisa Liu, Shanghai-based research analyst for Gartner, the key is for businesses to review their needs before making any decisions.
Companies with regional or global coverage are advised by Liu to register with both NSI and CNNIC to ensure reaching as many Chinese people as possible. For China-based businesses that target only local audiences, it is better to register with CNNIC, because if disputes arise regarding domain name registration, such as brand name infringement, their rights can be better protected, she said.
"Experience has told us that when there's a dispute between a Chinese company and a foreign one (on domain name registration), say in the US, it's the Chinese companies that always lose," Liu said.
Separately, US-based trade association the Internet Society issued a press release on November 8 asking that the NSI's multilingual domain names testbed be delayed until the Internet Engineering Task Force (IETF) can develop a proposed standard for internationalised domain names.
The Internet Society "believes the commercial testbed is premature under the technical standards of the Internet,'' as stated in a press release. It recommends that ``before Internet users establish claims of ownership of particular domain names, it is now time for a hiatus in the commercial deployment of internationalised character sets in the operational DNS."
"This is very significant," said David Maher, vice president for public policy at the Internet Society. "As the umbrella organisation for the IETF and the Internet Architecture Board (IAB), the Internet Society represents a worldwide collection of the most respected engineers and technical professions on the Internet...We think this will absolutely hurt the DNS and inevitably lead to conflicts as people claim to have the rights to certain names because of this testbed."
Carolyn Duffy Marsan from US Network contributed to this report.