ICANN, VeriSign make strange bedfellows

By Ross Rader

Story last modified Mon Nov 21 04:00:00 PST 2005

The Internet Corporation for Assigned Names and Numbers recently announced a
proposal intended to end a long-standing dispute with VeriSign,
administrator of the .com registry.

The organizations claim the proposal clears the way for a "...new and
productive public-private partnership" between VeriSign and ICANN "...for
the benefit of the Internet community."

Not so fast. This deal is actually a signal that the end of the Internet
community's role in determining its own future may be imminent. This is a
$1.5 billion giveaway that proposes to permanently transfer important public
infrastructure to VeriSign. The deal proposes to:

€ Lock in domain registration price increases, adding significant cost
increases to consumers over the next seven years--to the benefit of only
ICANN and VeriSign;

€ Allow for the expansion of VeriSign's natural monopoly, to the detriment
of competitive segments of the market; and

€ Grant VeriSign permanent control of the .com database.

VeriSign's role as a generic top-level domain administrator, as defined in
RFC 1591, is to "perform a public service on behalf of the Internet
community." (RFCs are documents that describe Net standards.) Implementing
this relationship through ICANN has been a boon for all involved. VeriSign
has supported the .com public infrastructure as a cornerstone of the digital
economy; ICANN has been guaranteed a steady revenue stream via surcharges it
receives from domain registrars; and VeriSign has captured $6 for every .com
domain name registration or renewal.

Despite this apparent "win-win-win," VeriSign has historically been unhappy
with its role as a top-level domain administrator. VeriSign takes the
position that the company can and should be able to cash in on the domain
name system. VeriSign CEO Stratton Sclavos has said that "DNS response is an
obligation we took on when we inherited (the .com administration contract).
But it would be commercially unreasonable for anyone to suggest that we
shouldn't be allowed to build incremental services on top of that."

This puts VeriSign directly at odds with the community it was designated to
serve and has resulted in hefty legal fees and a flawed settlement proposal.
Rather than reinforcing the relationship between the two parties, the
proposed settlement agreement redefines it. VeriSign successfully leveraged
the litigation into a complete renegotiation of its contract with ICANN
staff who seemingly played right along to avoid further litigation.

VeriSign should be rewarded a fair commercial return on its investment as
the administrator of .com, but the community cannot assign it irrevocable
rights to .com.

Any settlement must make it clear that VeriSign does not own .com.
Additionally, it must encourage the creation of more competition in the
industry, not less. Fixed terms for the administration contracts and
predictable pricing structures need to be extended to all registry
administrators. Further, ICANN has to clear the path for registries to
compete, by regularly re-bidding registry management contracts and creating
new generic top-level domain administrators. This will drive registration
fees lower, rather than higher as proposed in the pending settlement.

ICANN is currently seeking input on the proposed settlement via its Web
site. It needs to hear from the community.

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