18(c) What operating rules will you adopt to eliminate or minimize social costs?

Prototypical answer:

What operating rules will you adopt to eliminate or minimize social costs (e.g., time or financial resource costs, as well as various types of consumer vulnerabilities)? What other steps will you take to minimize negative consequences⁄costs imposed upon consumers?

Social costs have been identified by us to be:

- Costs related to defensive registrations
- Costs related to processes of recovering a domain from an abusive registrant
- Time spent in the above processes
- Time wasted because of confusion

Costs related to defensive registrations and costs related to processes of recovering a domain from an abusive registrant: Our operating rules aimed at minimizing these social costs are:

- We will not incentivize defensive registrations.
- We will implement URS, UDRP and every other standard rights protection mechanism.
- We will use the means at our reach to promote and facilitate URS processes regarding potential infringement of trademarks.

These policies and procedures are the tools ICANN has put in place to reduce the costs when abusive registrations occur. A registry such as the one planned for .LEGAL will have open registry policies and therefore is not absent to this situation. Nevertheless we will focus a lot on that our marketing strategy communicates the processes available for trademarks to react to abusive registrations.

Furthermore, our allocation of domains will be done through an ordered plan that seeks to assign domains in a fair organized and consistent manner. The Gradual Offering Plan we have detailed in the policy section also aids in the reduction of social costs by providing an organized distribution structure.

We will hold Sunrise, Landrush, the Geographic protection program, and will open up for General Availability at pubic and well communicated moments in time. There will be enough time between them and enough communication and outreach activities to ensure information is available to all interested parties. The Sunrise period, intended to allow IP right holders to protect themselves. The Landrush period, to allow early registration of domain names before the General Availability time after which the First Come, First Served rule will apply. And the Geographic Protection Program to give priority to governments and local authorities. This will allow us as stated before to launch the extension through a consistent and fair process.

i. How will multiple applications for a particular domain name be resolved, for example, by auction or on a first-come⁄first-serve basis?

Multiple applications for a particular domain may only happen on the Gradual Offering plan of the extension. This plan includes Sunrise, Landrush, and Geographic protection program phases.

If two applications for the same domain were to be received the following rules apply:

- If two requests are received for the same domain under the Geographic Protection Program, the Registry will reserve that domain and at the cost of the Registry will create a landing page that redirects to sites as instructed by the contending applicants in a fair manner. Registration fees will be assumed by applicants and will be divided among the contending applicants. The Registry reserves full rights to modifying the landing page and exclude the presence of any applicant´s presence if the applicant were to cease payment or any other reason as determined by the Registry.

- If a request under the Geographic Protection Program were to match a Sunrise request, the Geographic request will prevail and the Sunrise request will not be entertained. Every valid request on the Geographic Protection Program phase will be temporarily reserved by the Registry until the outcome of the registration is defined.

- If any other two requests are made by any two applicants in the same phase (Sunrise or Landrush) the following rules also detailed in the policy section apply:

Auction rules:

When contention occurs in any initial phase of the launch of the domains under the extension an auction will apply between qualified applicants. All the auctions will take place at the same time. The Registry has considered both the possibility of running the auctions internally or outsourcing the auction process.

The following considerations have been initially drafted:

Timeframes:

- Auctions will be held for a period of 60 days with every auction lasting 5 days or 120 hours.
- Batching of the auctions will be done by alphabetical order.

System:

- The auctions will be conducted through an online bidding system.
- Applicants must agree to the terms and conditions of the online bidding system. If the applicant does not agree to the terms and conditions the auction will still take place and the winner of the auction will be assigned the domain name. The Registry, the auction provider if any, the registrar and any other related party will not be liable in the case an applicant fails to use the auction system.

Bidding:

- Bidding will start at 1 dollar and will have increments as implemented in the auction system.
- Proxy bidding will by allowed in the auction system.
- Extensions will also be done in case bidding is active at the final periods of the auction.

Payment:

Applicants will be required to pay within 30 days of the end of the auction. Notices of the payment will be sent every 5 days to the applicant. If payment is not received by the term provided, the domain will be reauctioned between the other applicants 45 days after the initial auction ended.

This process will repeat until a successful payment is received. If only 2 applicants are participating in the auction and one defaults in payment, the domain will be awarded to the other applicant free of fees.

Allocation:

The winner of the auction will have the name registered at the registrar through which the application was submitted.

After the domain is available for public registration domains will be awarded by a first com⁄first serve basis.

ii. Explain any cost benefits for registrants you intend to implement (e.g., advantageous pricing, introductory discounts, bulk registration discounts).

We are planning the following pricing strategies along with our Marketing campaign:

First year registration price reduction. To incentivize registrations and reduce barriers to registrants we may have temporary campaigns where we will reduce the price for the 1st year of registration. This will allow us to structure marketing campaigns with our Registrar partners to promote the extension.

iii. Note that the Registry Agreement requires that registrars be offered the option to obtain initial domain name registrations for periods of one to ten years at the discretion of the registrar, but no greater than ten years. Additionally, the Registry Agreement requires advance written notice of price increases. Do you intend to make contractual commitments to registrants regarding the magnitude of price escalation? If so, please describe your plans.

Commitment of price escalation: We are committed to serve our registrants in the best way possible. We understand the importance of having a consistent price structure and policy. Therefore our commitment to registrants will be the following.

- For the first five years of operation of the .LEGAL registry there will be no price increases. No one year term of registration or renewal will be higher than 15 USD as per our pricing strategy.

- After the 5th year the highest increment in the domain registration prices will be 5% yearly, or as low as commercially practicable.

These policies will be implemented at the wholesale level. Registrars may or may not transmit this structure to their registrants.

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