Registrars Sue ICANN, VeriSign to Block Domain Name Service

By Matthew Hicks  |  Posted 2004-02-27 Print this article Print

The second lawsuit in two days filed against ICANN charges that a proposed domain-name wait-listing service is anti-competitive and violates consumer protection laws.

A group of eight registrars on Friday sued the Internet domain-naming oversight body and VeriSign Inc. in an attempt to block a proposed service for back-ordering Web addresses. In a lawsuit filed in federal court in Los Angeles, the registrars allege that the VeriSign-backed service is a threat to competition in the domain-name industry and violates consumer protection laws because it makes guarantees that it cannot keep. The suit is the second in as many days against the Internet Corporation for Assigned Names and Numbers, which is charged with overseeing the domain name system. It comes days before ICANN opens a series of public meetings in Rome.
First proposed about two years ago, the so-called wait-listing service, or WLS, would allow those seeking a particular domain name to pay for the right to claim it in the event the current registration expires. Only one person could place a reservation on a given domain name.
VeriSign, the registry that manages the Nets most popular domains, .com and .net, would operate the WLS and offer the service to the registrars. But the group of registrars says that it would stifle competition in the market for back-ordering services, where registrars already offer similar home-grown capabilities. The lead counsel in the lawsuit, Derek Newman, of Newman & Newman, Attorneys at Law, LLP in Seattle, said in a statement that the WLS will "unnecessarily, and in violation of a host of consumer protection laws, replace a method already working well." Prior to filing the suit, Newman threatened legal action in a letter sent to ICANN last week. VeriSign officials declined to comment on the lawsuit, and an ICANN spokesman said that the nonprofit organization had not seen the latest lawsuit and could not comment on it. As previously reported, ICANN has completed a series of negotiations with VeriSign for the introduction of the service, and the ICANN board of directors plans to consider approving the WLS during its March 6th meeting in Rome. ICANN President and CEO Paul Twomey, in an earlier interview with, said that the WLS has undergone a thorough review. This is not the first time WLS has been targeted. A different set of registrars filed an earlier lawsuit, alleging that the back-ordering service was anti-competitive. A federal judge in November sided with ICANN by rejecting a temporary injunction against the WLS, and the registrars later dismissed their case. "This all comes down to money, and it all comes down to which segment of the renewal market various people are targeting," Twomey said in the earlier interview. "I dont think ICANNs role is to determine who should be making money in a particular segment and who shouldnt be." Among the complaints in the new lawsuit is that VeriSigns proposed approach to charging for the back-ordering service amounts to "an unlawful and fraudulent protection racket." While some existing back-ordering services charge only if a Web address becomes available, the WLS requires consumers to pay upfront to be first in line for a taken domain name, whether or not it ever expires. VeriSign has proposed a $24 a year registrar fee for a WLS subscription, compared to $6 a year for a regular domain-name registration, according to the lawsuit. The registrars named as plaintiffs in the lawsuit are ABR Products Inc., which does business as; LLC; R. Lee Chambers Company LLC, which does business as; Fiducia LLC; Spot Domain LLC; !$6.25 Domains! Network Inc, which does business as Esite Corp.; Ausregistry Group Pty Ltd.; and Bid It Win It Inc. The registrars lawsuit follows a lawsuit from VeriSign on Thursday that challenges ICANNs authority to block or regulate the types of services that VeriSign can offer. VeriSign, in the suit, accuses ICANN of violating its registry agreement when it blocked or added restrictions to services such as the WLS and the contentious SiteFinder redirection service. VeriSign in October suspended SiteFinder, which sent Web surfers who mistyped or misspelled a Web address to a VeriSign-run search site, after ICANN demanded it do so. But VeriSign officials have said they hope to relaunch SiteFinder.
Matthew Hicks As an online reporter for, Matt Hicks covers the fast-changing developments in Internet technologies. His coverage includes the growing field of Web conferencing software and services. With eight years as a business and technology journalist, Matt has gained insight into the market strategies of IT vendors as well as the needs of enterprise IT managers. He joined Ziff Davis in 1999 as a staff writer for the former Strategies section of eWEEK, where he wrote in-depth features about corporate strategies for e-business and enterprise software. In 2002, he moved to the News department at the magazine as a senior writer specializing in coverage of database software and enterprise networking. Later that year Matt started a yearlong fellowship in Washington, DC, after being awarded an American Political Science Association Congressional Fellowship for Journalist. As a fellow, he spent nine months working on policy issues, including technology policy, in for a Member of the U.S. House of Representatives. He rejoined Ziff Davis in August 2003 as a reporter dedicated to online coverage for Along with Web conferencing, he follows search engines, Web browsers, speech technology and the Internet domain-naming system.

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