China has been witnessing an unprecedented and continued development of its Internet economy. This has given rise to the need for more detailed and specific regulations to clarify functions and requirements for parties involved in this development. To assist with this endeavor, the PRC Ministry of Information Industry promulgated the revised Procedures of Administration of China Internet Domain Names (“the Procedures”) on November 5, 2004. These new procedures came into effect on December 20, 2004.

The revised Procedures have (i) restructured and clarified the respective functions of domain name registration administrators and domain name registration service providers; (ii) defined the requirements of setting up domain name root servers and establishing domain name root server operators, and; (iii) further clarified the requirements for establishing domain name registration administrators and domain name registration service providers. Each are described in further detail below:

•  Functions of Domain Name Registration Administrators and Domain Name Registration Service Providers

Prior to the revision of the Procedures, a domain name registration administrator would have also been involved in the registration service. In somewhat pyramidical fashion, domain name registration administrators and those holding domain names at all levels were responsible for the registration and servicing of domain names at one level lower. This has now been replaced with a more segmented administering style defined by respective functions, i.e., administrators will focus on the administration of domain name systems, while service providers will be dedicated to registration services. Definitions of these parties are:

Domain name registration administrator : Institution responsible for operating, maintaining and administering top-level domain name systems.

Domain name registration service provider : Institution that accepts applications to register domain names, and that directly registers domain names in the domestic top-level domain name database. Also directly or indirectly registers domain names in foreign top-level domain name databases (by such amendment, domain name registration service providers are now expressly allowed to provide the service of registering domain names in foreign top-level domain name databases).

•  Requirements for Setting Domain Name Root Servers and Establishing Domain Name Root Server Operators

Under the revised Procedures, the requirements for setting domain name root servers and establishing domain name root server operators have been further defined and strengthened (subject to the approval of the Ministry of Information Industry).

For setting domain name root servers and establishing domain name root server operators, the applicant shall fulfill the following requirements:

•  Have necessary capital and qualified professional personnel;

•  Have conditions and technical capacity to ensure safe and reliable operation of domain name root servers;

•  Have sound security measures to protect the safety of networks and information;

•  Have the ability to meet the requirements of Internet development and stable operation of domain name system;

•  Other conditions required by the States' regulations.

•  Requirements for Establishing Domain Name Registration Administrators and Domain Name Registration Service Providers

To establish domain name registration administrators, the applicant shall fulfill the following requirements:

•  Maintain top-level domain name server (excluding image server) within the PRC, and corresponding top-level domain name systems are to be in accordance with international Internet domain name systems and the PRC' s Internet domain name system;

•  Have necessary capital and qualified professionals specializing in activities relating to domain name registration;

•  Have solid track record and operating experience in the field of services related to domain name registration and maintenance;

•  Have an established reputation or capacity for providing long term service to users;

•  Have business development strategies and appropriate technical plans;

•  Have sound mechanisms for monitoring domain name registration service and security measures safeguarding networks and information safety;

•  Other conditions required by the States' regulations.

To establish as a domain name registration service provider, the applicant shall fulfill the following requirements:

•  Be a “legal person” enterprise or non-profit business legal person incorporated in accordance with PRC law;

•  Have registered capital of not less than RMB 1 million, have an established system of domain name registration service within the PRC with technicians and customer service staff specialized in domain name registration service;

•  Have an established reputation or capacity for providing long term service for users;

•  Have business development strategies and appropriate technical plans;

•  Have sound security measures safeguarding networks and information safety;

•  Have sound withdrawal mechanisms for domain name registration service;

•  Other conditions required by the States' regulations.