ICANN Targeted by Lawsuit, Yahoo

WASHINGTON-Network Solutions found itself a target of a class action lawsuit Feb. 28 charging the domain registrar with bilking consumers through a scheme forcing them to buy domain names from Network Solutions instead of competitors that charge less.

According to the lawsuit, when someone searches Network Solutions for the availability of a domain name, the company immediately registers the name for itself. Registering the name by Network Solutions prevents other registrars from selling the domain name at prices less than Network Solutions.

“Network Solutions’ scheme is made possible by ICANN,” Brian Kabateck, lead counsel in the class action suit, said in a statement. “ICANN allows companies that sell domain names to avoid paying registration fees for names cancelled within five days. Thus, Network Solutions can defraud customers at no cost to itself.”

The class action suit comes on the same day that a Yahoo executive charged ICANN (Internet Corporation for Assigned Names and Numbers) with evolving into a trade organization for domain name registrars. As a private-public partnership organized in 1998 under the supervision of the U.S. Department of Commerce, ICANN was founded to preserve the operational stability of the Internet, to promote competition and to achieve broad representation of global Internet communities.

“We are very concerned about ICANN,” Yahoo Senior Legal Director J. Scott Evans said at a review session of the relationship between the private-public group and the U.S. government. “Our job is to ensure that users are taken care of. Our voice is not being heard.”

ICANN, located in Marina Del Ray, Calif., is currently clamoring to move away from oversight of the U.S. government. On Nov. 25, 1998, the Department of Commerce signed a memo of understanding with ICANN to help the transition of Domain Name System management to the private sector.

The original timeline didn’t quite happen as expected. Nine years and 13 revisions of the 1998 memo of understanding later, ICANN believes it is ready to strike out on its own, with no federal help.

“We’ve asked the U.S. to take a hands-off approach and we’re eager to move ICANN to a private sector model,” Lynn St. Amour, president and CEO of ISOC (the Internet Society), said at the sparsely attended meeting in a Department of Commerce auditorium.

Yahoo’s Evans said he didn’t think ICANN was ready for prime time.

“We do believe that ICANN has made significant progress over the last 10 years,” Evans said at the meeting. “But we have not seen any major enforcement of contracts that are sustainable through private contractors.”

The JPA (Joint Project Agreement) between the U.S. government and ICANN is set to expire in 18 months.

ICANN is also named in the class action suit against Network Solutions. “ICANN is aware that Network Solutions is abusing this policy and yet continues to facilitate its actions,” the lawsuit states.

Network Solutions did not immediately respond for comment.

“Imagine if you asked a car dealer if they had a black convertible and were then forced to buy the car from them. Would you get a good deal?” Kabateck said. “Each time someone asks Network Solutions about a domain name, the firm creates a monopoly for itself, forcing consumers to pay the price they demand.”