This complaint is filed by Bradley L. Bartz, President, Internet Access Center K.K. against the Japan Network Information Center (JPNIC) for its domain name registration rules, which constitute an unreasonable restraint of trade. This complaint consists of the following allegations and a description of the evidence which I lay before you for your review, investigation and appropriate remedial action.

• A short description of JPNIC
• The specific JPNIC rules and activities being contested
• A statement as to why the JPNIC rules and activities are a significant restraint of trade and are greatly dampening the electronic commerce and venture business spirit growth of the Japanese Internet
• Proposed changes to these rules to remedy the restraint of trade by JPNIC
• History of the interactions Internet Access Center K.K. (IAC) has had with JPNIC.
• Attached documents

The issue of "unreasonable restraint of trade" by JPNIC is a Japanese domestic issue and should be decided/investigated by the Japan Fair Trade Commission. However the opinion of the International Assigned Number Authority pointing to RFC1591 concerning the correct management of domain name registration and distribution might be sought.

A feeling exists among members of JPNIC and the Japanese Internet community that JPNIC is actually hoping that they will be involved in a legal battle so that the Japanese courts may decide these issues for them. It is time to investigate the unreasonable restraint of trade by JPNIC and to help the Japanese economy become a powerhouse in Internet commerce.

These are from English translations of JPNIC documents.

JPNIC (Japan Network Information Center) is the domestic NIC (country NIC) of Japan, and it administrates the domestic Internet resources, and controls, provides information.

In order to operate the Internet of Japan in a harmonious way, JPNIC is performing its activities by cooperating with the Internet of other countries. For example, JPNIC allocates IP addresses to all domestic organizations, this is because it is appointed by the InterNIC (formerly The NIC) through the internationally recognized IANA (Internet Assigned Numbers Authority). As well as with domain name, it is in accordance with ISO code meant for each country so that the top level of Japan ".JP" becomes an

unique domain in the world. Besides, the database service provided by JPNIC

is not only used by the domestic users, but also by users from all around the globe. Queries related to public documents and access to whois service from all around the world is 4% (mail server) and 24% respectively.

The first General Meeting of JPNIC was held at the University of Tokyo, computer centre on April 9th, 1993. The participants were related to 20 networks organizations that are the members of JPNIC. It was a new step for the information center which is meant to be a place where experts related to Computer networks of Japan would be able to share information.

What is a Domain name?

In Internet, names like "AAA.BB.JP" separated by period are used to express

domain name for organizations.

This domain name is a part of an electronic mail address and it has to be unique for all the organizations. Here the domain name after the last period (known as first level or top level (*1)) represents the country code (JP for Japan) as decided in ISO 3166 (*2). In case of Japan, considering JP as the top level, the domain name allocation group of JPNIC allocates domain name up to the third level (from now on it will be referred as JP domain name).

(*1) Domain names are read from left to right, i.e the one after the last period is referred as level 1, the one next to it as level 2 and the next one as level 3 domain name and so on.

(*2) In case of America there are exceptions like edu, com etc. But in most of the cases they have been used before the code was decided and they are kept the same because of historical reasons.

The present condition and structure of JP domain

The second level of JP domain represents the attribute of an organization by a two letter code (AC = academic, CO = commercial, GO = government, OR = organization, AD = administration (*3)), and the third level represents the organization name (known as domain name for organization). At present, JPNIC allocates one domain name per organization except for the exceptions (*4) that are approved by JPNIC.

Figure 1. Hierarchy of the NIC's around the globe

I) A company/entity is only allowed to register one domain name with JPNIC, although the company may own many businesses and many brand name products.

II) A foreign company cannot register a domain name with JPNIC unless it is

established in Japan with a registered Ikanshomeisho and a registered office in Japan.

III) An Individual (Japanese or foreigner) cannot register .co.jp JPNIC domain names.

4. You cannot buy, trade or sell a JPNIC domain name, even when the business utilizing that name is sold.
5. JPNIC activity of "blacklisting" Internet Access Center K.K. and actually encouraging companies not to do business with IAC.

Japan is the second largest Internet market in the world, behind the United States, with an estimated 7,000,000+ users. The Internet and telecommunications infrastructure of Japan are on the way to being the world's best. Right now, 95%+ of Japanese homes can be connected with ISDN circuits. It is almost certain that the Japanese Internet market will become the largest Internet market in the world in terms of number of users and in the amount of actual Internet commerce that takes place.

I) A company/entity is only allowed to register one domain name with JPNIC.

Commerce is about marketing and branding strategies. Using unique names to designate a service or product. This JPNIC rule greatly limits the ability of businesses in Japan to expand their opportunities in Internet Commerce.

Yet, and this is a significant point, as of October 01, 1997 there were only 21,075 .co.jp domain names registered with JPNIC. This compares with more than 1,500,000 .com (U.S.) domain names. [It is widely recognized that a .co.jp designation refers to a Japan address and a .com designation refers to a U.S. address.]

This incredible difference in the number of registered domain names showcases how JPNIC rules constrict the creative growth of electronic commerce in Japan. Remember that Japan is the second-largest Internet market in the world. Many companies have more than one product or service that they sell. Many companies actually sell the same

product or service using different brand names so they can reach different markets and test different pricing/marketing strategies without diluting the equity of their main brand. The limitation of "one company - one domain name" by JPNIC is an unreasonable restraint of trade.

There are numerous examples why this and other JPNIC rules are a major bottleneck to the growth of free enterprise in Japan. For example some 0120 free dial numbers are quite valuable and are bought and sold based on how easy the number is to remember. If Toyota Motor Company was restricted from naming its different car models to only one name based on the JPNIC "one-company can get only one domain name rule" it would be impossible for Toyota to differentiate each model in the consumers mind. And right now it is only www.toyota.co.jp...

In America Chrysler Motor Company operates unique domain name websites for different models, including www.jeepunpaved.com, www.4adodge.com, www.eaglecars.com, www.plymouthcars.com, www.chrysler.com, and www.chryslercorp.com. Also, in America one of the worlds’ premiere branding companies, Proctor and Gamble, have domain names like, www.pg.com, www.always.com, www.tampax.com, www.tide.com, www.diarrhea.com, www.clearasil.com, www.covergirl.com, www.olean.com, www.sunnyd.com, www.clothesline.com, www.sassoon.com, www.oldspice.com, www.pampers.com, www.pringles.com, www.parenttime.com, www.criscokitchen.com, and www.hugo.com. This is only a sample of thousands of similar U.S. businesses. What a contrast to the struggling backward rules of JPNIC!

Before JPNIC changed its rules restricting domain names to Japanese corporations only IAC was successful in registering 100+ .co.jp domain names using Delaware, USA corporations for each one. IAC is using these names for electronic commerce in Japan. For example, isdn.co.jp is used to promote ISDN phone service and the sales of ISDN equipment, callback.co.jp is used to sell International phone services, and hoken.co.jp is being used to sell insurance products on the Japanese Internet. A variety of our other .co.jp names will be used to sell unique email addresses such as tanaka@soccer.co.jp, tanaka@venture.co.jp or tanaka@sushi.co.jp.

IAC has been lucky to get these domain names and hopes that JPNIC will re-open its registration policy so other firms and individuals can also participate in creative Internet commerce activities in Japan.

II) A foreign company cannot register a domain name with JPNIC unless it is

established in Japan with a registered Ikanshomeisho and registered office in Japan.

Japan is the second largest Internet market in the world behind the United States with an estimated 7,000,000+ Japanese users. It is an unreasonable restraint of trade that foreign companies and entrepreneurs are prevented from registering JPNIC domain names and thus prevented from expanding their business on the Japanese Internet.

In today's global economy, it is imperative that Japan take a leading role in Internet commerce. Foreign companies and entrepreneurs have much to offer Japan and its citizens.

IAC is now working with a California based company that is interested in creating a Japanese website to sell its products directly to Japanese consumers. They have a great site at www.supergo.com which sells bicycles, bicycles parts and accessories to the Internet public. "We make many large, factory-direct purchases of hot new items and sell them for the lowest price," states the www.supergo.com website. They want to operate a Japanese language website to offer these great deals to Japanese consumers in the Japanese language. They want to register a JPNIC domain name to reflect to the Japanese consumer that they doing business in Japan such as supergo.co.jp or mountainbike.co.jp, but they can not under JPNIC’s bottleneck strategy.

III) An Individual (Japanese or Foreigner) cannot register .co.jp JPNIC domain names.

This rule is a significant restraint of trade against venture companies, entrepreneurs and individuals wishing to engage in electronic commerce on the Japanese Internet, not to mention average users wishing to start a website with an easy-to-remember location. Japan must encourage venture businesses and the Internet is a great method for venture companies and entrepreneurs to bring their products and services to market.

Of the 1,500,000+ .com American Internet domain names more than a few are registered to individuals dreaming of starting their own business and selling their product or services over the Internet. This dream is not available in Japan because of JPNIC. What a shame.

The Japan Fair Trade Commission can empower Japanese entrepreneurs to make the Japanese Internet a highly creative and successful venture business growth vehicle.

IV) You cannot buy, trade or sell JPNIC domain names.

This is the highest form of restraint of trade that JPNIC is inflicting on the Japanese Internet community. The history of commerce has many many examples of companies building brand equity and selling those brands to other companies. Companies and entrepreneurs hope to sell products and services through unique domain names that are somehow related to those products and services. For example, a world famous soft-drink company can only register one name even though they have over 100 different products that are targeted at different audiences.

4. JPNIC activity of "blacklisting" Internet Access Center K.K. and actually encouraging companies not to do business with IAC.

AGF Story

In March 1997, IAC suggested to Mr. John Durkin of Ajinomoto General Foods (AGF) that it register ocha.co.jp and coffee.or.jp to help sell its products on the Japanese market via the Internet. In following the JPNIC "one company one domain name" rule, the Mr. Durkin provided IAC with company information of two Gunma-ken AGF subsidiaries to purchase the rights to ocha.co.jp and coffee.or.jp.

What followed was direct intervention by JPNIC to disrupt the business of IAC. As relayed by Mr. John Durkin of AGF, the JPNIC employee that checks domain name applications is married to the controller of AGF. She scolded her husband for trying to register ocha.co.jp and coffee.or.jp using AGF's subsidiary companies. She also

told her husband that IAC is on the JPNIC "Blacklist" and that AGF should not do

business with IAC. Mr. John Durkin was in turn scolded by the controller (for getting his wife mad at him). Mr. Durkin then called IAC and told IAC to stop the registration of ocha.co.jp and coffee.or.jp because he did not want to fight with his controller because that is the person who controls his budget.

This was a very bad situation and typifies the restraint of trade issue of JPNIC policies and the harassment actions of JPNIC. IAC lost all chance of doing business with AGF. This was harmful IAC economically and in reputation.

I) Removal of unreasonable limit on the number of .co.jp domain names that can be registered with JPNIC.

II) Removal of unreasonable restrictions on what kind of entity can register .co.jp domain names.

III) Removal of unreasonable restrictions on the buying, selling and trading of domain names registered with JPNIC.

4. If necessary, the establishment of kk.jp and yk.jp to be only issued to Kabushiki Kaisha and Yugen Kaisha entities respectively.
4. Immediate restraint on the JPNIC activity of "blacklisting" Internet Access Center K.K. And an immediate stop to any JPNIC activities that actually encourage companies not to do business with IAC.

IAC was founded in 1992 in Tokyo, Japan by Bradley Bartz and Jay Smith and has been providing Internet services in Japan since 1994, then running under the name of iac-online.com. IAC now is famous in the Japanese Internet community for owning more than 100 .co.jp domain names. Our first JPNIC domain name, "iac.co.jp," was registered in cooperation with NTT Personal Communications (NTTPC), IAC's Internet infrastructure partner. This was in early 1995. In the summer of 1996 we started to request the registration of the multiple JPNIC domain names in our collection. It was then that JPNIC stated that "one company may only register one domain name." After checking with IAC'S attorney about JPNIC's rule we decided to register multiple Delaware, USA corporations to meet this requirement. JPNIC granted IAC all of our requests. This was in August/September 1996. Shortly after that, JPNIC changed their rules again so that foreign companies may not register .jp domain names without (having) the corporation actually existing in Japan with a registered ikanshomesho. Thus, JPNIC erected its own trade barrier to protect the Japanese Internet from foreign competition.

Registrations for IAC clients rejected by JPNIC

JPNIC has a history of summarily rejecting IAC requests for domain name registrations for its clients, including the following:

1. actuary.co.jp - A foreign entrepreneur living in Japan operates an independent actuary service for foreign corporations in Tokyo. His request for actuary.co.jp was rejected because he is not a corporation. This is a great example of how the JPNIC "one company - one domain name" rule excludes independent, start-up and entrepreneurial companies from doing business on the Japanese Internet.

2. A Major Softdrink Company - originally registered theirname.co.jp in 1996. IAC also suggested that this company also register other versions of their name .co.jp to make it easier for Japanese consumers to find their Internet website. JPNIC rejected the second name based on their "one company - one domain name" rule. This major soft drink company had to give up and only register one name. Please note that this major soft drink company has over 120+ different branded drinks, each .

We have more examples and suggest many hundreds if not thousands of examples exists from parties that used other Internet service companies to register domain names.

Change in Domain Name

On September 30, 1997 IAC requested JPNIC to change four domain names to

different names as follows:

sport.co.jp change to keizai.co.jp

jmen.co.jp change to desu.co.jp

x-files.co.jp change to kensaku.co.jp

spaceman.co.jp change to chat.co.jp

All four proposed changes were rejected. All of these domain names are held by Delaware, USA corporations of the same name. JPNIC is requesting the inkanshomesho. These corporations are not in Japan, but are represented by

Internet Access Center K.K. All of these domain names have been approved by

JPNIC and 20,000 yen for each name was paid in 1996. This is another example of harassment by JPNIC against IAC.

Attached is a list of IAC registered JPNIC Domain Names. IAC hopes that the Japan Fair Trade Commission will make the opportunity to register creative JPNIC domain names a competitive and open process.

IAC stands ready to respond and assist in any manner requested by the Japan Fair Trade Commission.

1. RFC 1591 in Japanese and English - RFC 1591 is understood to be the authoritative guideline for domain name registrars. It is included here for reference.
2. Briefs on domain name registration policy of ten different countries. - This information comes from www.netnamesusa.com who specializes in International domain name registrations services. This is not an official document and some country policies may not be accurate. However this give a good benchmark as to how other countries administer domain names.
3. Various documents in Japanese from JPNIC about JPNIC. - provided to give more background about JPNIC. All of these documents are available on the Internet at www.nic.ad.jp
4. Email correspondence between JPNIC and IAC - provided here are copies of email correspondence to and from IAC and JPNIC. It is only provided for reference.
5. List of IAC registered JPNIC Domain Names - This list is provided to highlight IAC’s experience with JPNIC and to help encourage the JFTC to open of JPNIC’s restrictive policies. This list should also be viewed as an example of using great domain names to compete in Internet electronic commerce.
6. Memorandum of Understanding on the Generic Top Level Domain Name Space of the Internet Domain Name System (gTLD-MoU) - This document is provided to showcase the International debate and resolutions for opening up to competition International domain name registration.
7. List of Signatories of the Generic Top Level Domain Memorandum of Understanding (gTLD-MoU) - this document is provided to show that as a signature to the above gTLD-MoU, JPNIC is stating it believes in a non-monopoly operation of domain name registration.