ICANN to Decide on VeriSign DNS Registry Settlement

The question of who will run the Internet's domain name registry is on the table, and stakeholders are speaking up.

A key decision determining who will run the Internets domain name registry in the future could be made as early as Feb. 28, when the Internet Corporation for Assigned Names and Numbers board convenes its next meeting.

At the top of the ICANN agenda is a proposed settlement to end litigation with VeriSign, which operates .com, the largest Internet domain registry.

The litigation began in 2003 when ICANN ordered VeriSign to shut down its SiteFinder service (which routed mistyped Web site addresses to a VeriSign portal), but it evolved into questions of contractual agreements between the two parties.

To settle the matter, ICANN and VeriSign drafted an agreement last fall outlining the registry operators future rights and responsibilities, but the proposal is coming under increasing fire from eight of the largest domain name registrars, who have indicated that ICANNs litigation woes wont end if it approves the proposal.

/zimages/6/28571.gifClick here to read more about the ICANN-VeriSign lawsuit.

According to the registrars, the competitive nature of the registry system, and consequently the prices charged to register names, is at stake.

"Based on the pricing and perpetual management terms in the current proposal, we believe that litigation is far better than capitulation in this case," Jonathon Nevett, vice president at Network Solutions, based in Herndon, Va., said in a conference call with other registrars and reporters Feb. 23. "If ICANN approves the revised proposal, it only will be trading one lawsuit for others."

The proposed agreement gives VeriSign a right to "presumptive renewal" to its contract when it ends, and it states that the same renewal provision must be included in future contracts. From the registrars perspective, this effectively eliminates the possibility of competition for the .com registry.

The current contract allows VeriSign presumptive renewal on a number of conditions, including justifying price increases. The proposal permits VeriSign to raise the price of domain name registration by a set percentage annually without cost-justification.

/zimages/6/28571.gifICANN plays down the U.S. influence on its actions. Read more here.

These terms irk the registrars, who complained that litigation should be settled on its own without being linked to the .com registry agreement, and that they have not been allowed to play a substantial role in the negotiating process.

"There is an absence of a policy framework to guide ICANN to important decisions," said Jordyn Buchanan, director of policy at Register.com, based in New York. "This results essentially in a series of bilateral contract negotiations."

Charging that the registrars "speak only in their own narrow economic interests," VeriSign Chairman and CEO Stratton Sclavos said that they did not reduce the prices of their services when VeriSign reduced the price of registering a .net name.

"This small group of registrars is seeking to prevent infrastructure investment among registry operators through a freeze on registry prices which would result in the registrars maximizing their profits at the expense of the broader Internet community and continued investment in the DNS [Domain Name System] infrastructure," Sclavos said in a Feb. 18 letter to ICANN board chairman Vint Cerf.

Noting that the protracted litigation is expensive for ICANN, Sclavos said the settlement will bring stability to the organization and will ensure needed investment in the DNS infrastructure.

"VeriSigns stewardship of the .com registry is critical to a secure and reliable DNS, especially now when the security and stability of the Internet and DNS face new and increasing threats of attack and increasing demands for reliability," he said. "The proposed .com agreement establishes the structural and economic framework necessary to preserve a stable and secure DNS."

According to a growing number of stakeholders weighing in, however, there are additional reasons ICANN should reject the proposal. Other nations are watching ICANNs performance, and giving VeriSign an "unregulated monopoly" over the .com registry could lead them to question the organizations management structure.

ICANNs At-Large Advisory Committee, which represents the interests of Internet users around the world, recommended that the board reject the proposal, go to trial with VeriSign, and initiate a rebidding process for the .com registry.

"The ALAC understands that one of the litigation risks to ICANN is that the legal foundation on which ICANN was built will be eroded. We believe that this is a risk worth taking," the committee said in a Feb. 20 letter to the board. "An ICANN that cannot ensure competition and protect registrants from monopolistic pricing is not an ICANN worth retaining."

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