From:           Inland Revenue, Sharon Mullins
Received:    26 September 2012

Thank you for your letter dated 30 May 2012, addressed to the then Commissioner of Inland Revenue, Bob Russell.  This email sets out Inland Revenue’s response to the proposal from the Domain Name Commission to extend the .nz domain name space by allowing registration of domain names at the second level. 

We do not support registration of second level domain names for the following reasons:

1.    The current domain name format is effective from Inland Revenue’s perspective and we cannot identify any tangible benefit for us or tax payers from changing from domain names such as KiwiSaver.govt.nz or ird.govt.nz. 

2.    If .nz domain names are released, it is likely we would seek to register all of Inland Revenue’s current domain names at the second level as we:

·         would not want anyone else to use our domain names (e.g. as a phishing site or a porn site); and

·         would want to protect our intellectual rights in our registered trade marks. 

As a result, we (as well as others in the same position) would incur monetary and time costs in:

·         administering those additional domain names; and

·         making the background technical changes that would be required.

Tax payers would derive little or no extra benefit from Inland Revenue incurring those additional costs.

3.    The current second level domain names provide information to tax payers about the nature of the organisation that owns the name (e.g. KiwiSaver.govt.nz is an official government site).  This feature would be lost.

While the Domain Name Commission proposes restrictions on certain second level domains, it is doubtful that it can restrict all variants.

Unwitting tax payers may mistake sites with a .nz name as being an official government site.  This puts them at risk of being scammed by persons in other jurisdictions (e.g. Nigeria).  

We believe that the proposal could result in domain names that compromise public trust as well as the legitimacy of existing websites.

 4.    If the proposal proceeds, we agree with the rationale for a sunrise period that would allow existing .nz domain name holders to have first chance to register names at the second level. 

However, we believe that registered trade mark holders should have the first right to register related domain names (for example, Inland Revenue should have the right to register KiwiSaver.nz).  We believe that this would be a fair way of determining which third level domain name holder should have the right to register a .nz name.

We prefer this option to requiring all third level name holders to consent to one party being able to register a .nz name.  The reasons for this are that it:

 ·         recognises the efforts that a registered trade mark holder has put in to protect its trade mark; and

·         prevents a disgruntled party from stopping a genuine party from registering a .nz name.
If is also unclear how long a prohibition on registering a .nz name would last if a third level name holder does not consent to another third level name holder registering a .nz name.  Does the prohibition end if the holder who withheld consent allows its domain name to lapse?  If this occurs, do the surviving third level name holders have to go through the same process again if they want to register a .nz name? 

Will the Domain Name Commission have enough staff to resolve these types of domain ownership issues in a timely manner?

5.    If .nz domain names are released for registration, and our suggestion that registered trade mark holders have priority rights is not accepted, then we agree with the proposal that all third level name holders would need to consent to one party being able to register a .nz name.

We have concerns, however, about the costs that third level name holders will most likely incur with having to deal with the consent process.

Inland Revenue considers that the disadvantages of the proposal (as discussed in a number of submissions available on your website) outweigh its advantages.  In this regard, we support the submission provided by the Ministry of Business, Innovation and Employment on 13 August 2012.

Regards

Sharon Mullin | Senior Solicitor, Corporate Legal | Inland Revenue