.zadna on its mandate

Meeting report

The Acting Chairperson said that after the last meeting with ZADNA, the entity had felt that it was not well understood and wanted the opportunity to clarify things so that the Committee would have a better understanding. There were just over 1m registered domain names but this was small given the size of the South African population of 54m. The National Integrated White Paper noted that one of the challenges was the limited regulation of the domain name space and the proposed new regulator of ICT that would be established which would inter alia incorporate the functions of ZADNA.

Briefing by .zadna

Mr Vika Mpisane, CEO, spoke to the Electronic Communications and Transactions (ECT) Act which gave ZADNA its mandate. Section 65(1) of the Act said ZADNA must manage and administer .za domains; license registries and registrars; publish relevant policy guidelines; create public awareness regarding economic and commercial benefits; conduct investigations, research & surveys; and advise the Minister of Telecommunications and Postal Services on domain policy issues. The entity did continual benchmarking to comply with international best practice.

.ZADNA was not funded by government, but from domain name registrations and therefore it was not subject to the PFMA. Changes to the budget and business plan was subject to the Minister's approval.

.ZADNA may under Section 68 promulgate domain name regulations, subject to the Minister’s approval and that Section 69 provided for Alternative Dispute Resolution (ADR) and ZADNA accredited ADR adjudicators for .co.za cases.

He then spoke on the history of .za. The first administrator, Mike Lawrie, chose a Second Level Domain (SLD) structure for .za. The SLDs were.co.za for commercial and.gov.za for government and its entities. This followed the UK, and Australian models, unlike the flat structure used in Germany.

He then spoke of the history between .za & ZADNA. The ECT Act process coincided with Lawrie’s retirement. .ZADNA was a late addition to the Bill as a compromise after serious tussling took place between the Department of Communications and Namespace ZA over the management of .za. Namespace ZA had been established by the internet community to serve as the .za manager. Government, however, saw .za as a national resource that should not be left in the hands of private individuals. The compromise was the establishment of ZADNA to regulate and manage .za which was inserted as Chapter X of the ECT Act. ZADNA was established in 2003 when the Minister appointed a nine-member Board and appointed the Chairperson.

The Act established ZADNA as a non-profit company with a membership base where every SA citizen could become a member. In this lay the complication of whether ZADNA was a PFMA entity or not. ZADNA was conflicted between being frameworked by an Act, yet operating as a company.

The Board held its first Board meeting on 9 Feb 2004. No funding was received from government until 2005. An individual director largely funded Board activities and director’s fees were not paid. The lack of funds meant staff could not be employed until late 2005 and led to directors becoming operationally involved. The

Board was composed of industry veterans and novices.

In 2005 the Board released a Public Discussion Document (PDD) for comment. The veterans on the ZADNA Board proposed opposing policy options. The Board decided to put a moratorium on new SLDs pending ZADNA policy and registry/registrar licencing. The moratorium was only lifted in 2015. The .co.za domains had 90% of the total 1.2m .za registrations and its registry operator (UniForum SA) was the most influential player as it controlled the market. ZADNA’s transformation was thus dependant on its relationship with UniForum. UniForum had its own corporate shortcomings. It had initially been a member’s entity but it stopped accepting new members and AGMs were no longer a regular occurrence. Another issue was that people knew UniForum and not ZADNA or the ECT Act. The discussion document asked key policy questions that would help inform the Board’s policy way forward on the structure of .za: whether the sub-domain structure should be maintained and should the domain be opened for direct second-level registrations.

The key outcomes of ZADNA’s consultations were that there was support for retaining the SLD structure; there was substantial support for a centralised SLD registry operations; there was support for a reseller model; and that ZADNA determine policy and allow both open and closed SLDs.

2007 marked the end of the tenure of the first Board which comprised of four white males, three black females, one black male and the Chairperson. New directors were appointed in 2007 and continued in office until 30 March 2015. A General Manager was appointed and ZADNA started participating actively in international domain name organisations and forums. A draft .za Policy & Procedures document was released for public comment, which comment showed that there was support for a Central Registry and support for developing licensing regulations. A Ministerial directive was announced in 2007, directing ZADNA to establish a central registry. Six new directors were appointed to the Board.

Key lessons learnt from the public comment was that there was a dearth of DNS practitioners of colour; there was a lack of leadership on the continent; and that there was great experience on how to build and operate a Central Registry in SA, but it resided in UniForum. ZADNA explored the possibility of it becoming the Central Registry operator but encountered significant industry backlash. The then Minister advised that ZADNA work with UniForum to implement a build, operate and transfer plan.

ZADNA started working with UniForum in formalising relations between UniForum and its registrars by introducing registry-registrar separation. Licensing regulations were released for public comment, but the State Law Adviser said only the Minister could make Section 65 regulations and it added that ZADNA may not be a Central Registry operator unless the ECT Act was first amended.

In 2009 ZADNA hoped to finalise licensing regulations without having to amend ECT Act and revised licensing regulations were released for public comment. ZADNA’s engagement with UniForum began but it was clear that reaching an agreement would be difficult. This lead to ZADNA looking at alternatives locally and internationally. ZADNA contracted consultants to develop a Central Registry business model and to develop Central Registry operational policies, procedures & specifications. Both consultants recommended ZADNA to work with UniForum if Central Registry was to succeed.

In 2011 the “build, operate and transfer” approach was confirmed by the Minister. Negotiations become more earnest and UniForum became more open-minded & accommodating in negotiations. Key transformation targets were set. UniForum directors were to accept ZADNA directors to form an interim Board with an independent Chairperson. The eventual target was to have UniForum directors exiting the Board and focus on their separate registry provider business. UniForum would be transitioned to ZA Central Registry (ZACR).

In June 2011, ICANN announced it would accept new Generic top-level (gTLD) domains applications. The cities of Cape Town, Durban and Johannesburg reported being approached by overseas commercial registry providers on launching dotCapeTown and dotDurban domains. ZADNA’s proposed ZACR dotAfrica bid received support of the African internet community.

In 2012 Central Registry negotiations resumed and were concluded and in 2014 the SLD General Policy was released for public comment following extensive internal reviews. There were signs for concern emerging however. Even though UniForum was substantially transformed, old UniForum attitudes appeared which calling for ZADNA to tighten the regulation of ZACR. These signs were that monthly reports were not submitted on time; there was no progress in implementing certain Operating Agreement aspects; there was no commitment to absorb core registry operations from the technical operator appointed by ZACR; ZADNA’s role in dotCities was under-stated, there was increasing expenditure in staffing costs, ICANN travel costs, and unwarranted costs in non-core projects like COZA Cares. These concerns increased in 2015 when ex UniForum members appointing themselves as contractors to UniForum.

Discussion

Ms J Kilian (ANC) asked how ZADNA saw their role in the new Regulator, as outlined in the ICT White Paper? Why did ZADNA exist if it allowed other entities to take over its core mandate?

Ms M Shinn (DA) asked where ZADNA’s core mandate lay; with government, to whom they were answerable, or to the ISP’s which paid ZADNA’s fees? What was the economic or commercial benefit of having.co.za or .africa domain names. What was ZADNA’s view on Afrilink’s proposal to punish governments which shut down the internet? The ZADNA board had four white males a black female and a black male in the past. What was the breakdown at present?

Mr N Koornhof (ANC) wanted a copy of the latest audited financial statements. He said the Central Registry would be incorporated into the Regulator as mentioned in the White Paper so where would ZADNA fit in?

Ms N Ndongeni (ANC) said ZADNA was established as an NPO and there were complications as to whether ZADNA was a PFMA entity. What was the current status on this matter? Did the organogram take into consideration the budget for new positions in the 2017/18 financial year budget?

The Acting Chairperson said there was mention that ZADNA outsourced because it did not have valuable skilled personnel available. What was the position about this now?

In response to the question on the role of ZADNA with reference to the White Paper, Mr Mpisane said the White Paper advocated for integration of regulatory structures, this could not be challenged. The white paper said there would be one integrated regulator for ZADNA, ICASA and USAASA. Once that regulator was introduced there would not be a USAASA or ZADNA but the registry function would not cease to exist it would be provided for or outsourced.

He agreed on the shortcomings of the ECT Act that had come back to haunt ZADNA. If there had been a proper framework in place many of the issues would have been eliminated. The way forward was the White Paper.

Regarding going forward and the implementation of the White Paper, he said there was a need to manage ZADNA’s integration and the phasing out of membership because while under the Companies Act the members decide, it is clear that in ZADNAs case the Minister decides and appoints the board. There needed to be a transitional mechanism as to who would be the representative at ICANN.

On the economic benefits of having a domain name, he said it was an attractive business from a revenue perspective, although not a huge one. There were 1.2m registrations at a cost of R45 per registration. R15-16 of the R45 went to ZADNA for fees. ZADNA lived within its means. Registrations meant money was reinvested in South Africa rather than overseas and that having.co.za was patriotic. He added however that there were other competing options for businessman. Sales, for example, could be generated via Facebook pages.

He said he would circulate the financial statements.

He said he had not responded to the Afrilink proposal because he stayed away from public policy because that was the function of government.

On whether ZADNA had the capacity to advise on internet governance, he said ZADNA was now able to provide advice although in the past it was a struggle when there were only four people

He said the issue of the .cities initiative was felt to be profound and it was discussed and government was consulted after which a decision was taken to apply. They now release an annual report on internet governance via outsourcing.

Regarding the board breakdown, he said that there were five women one of whom was Indian, four males one of whom was white.

Regarding Ms Ndongeni’s question, he said that it was a dynamic of membership and that ZADNA was not funded from the public coffers, however ZADNA voluntarily submitted itself to a high-level inspection or audit from the AG even though it was not a PFMA entity. These audits especially happened in the beginning when ZADNA received state funding to start up the entity.

He said the organogram was valid and that not all positions of the board had been filled. ZADNA would cease to exist within the near future.

Ms Kilian asked if he wanted to suggest any immediate interventions where the Committee could help with any problems ZADNA might have.

The Acting Chairperson asked if the two vacant positions would be filled and were there any other unintended consequences arising from ZADNA’s incorporation into the new regulator that the Committee was not aware of.

In reply to the Acting Chairperson, Mr Mpisane said that the legalities of the phasing out of the membership of ZADNA had to be prepared for. As well as the takeover of the functions to ICANN, the transition period should be a smooth process and not be bogged down by issues.

He said that ZADNA was on the verge of filling two positions. they were junior positions and the interviews were set for the coming Friday. He did not think that the process should be stopped as after integration, the incumbents would find a ’home’.

On Ms Kilian’s questions, he said that the White Paper was the intervention to solve the problems that existed.

The meeting was adjourned