ICANN-Verisign Agreement Under Fire

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In a nine-to-five vote last week, the Internet Corporation for Assigned Names and Numbers (ICANN) board approved an extension of its contract with VeriSign for .com domain name administration through 2012. The reaction to the decision so far has been largely negative, with some of the Web’s biggest players speaking out against the terms of the new deal.


In fact, eight domain registration organizations, which together represent more than half of the market, have sent a signed letter to ICANN Chair Vint Cerf that lays out why they’re opposed to the new arrangement. The signatories, which include firms such as GoDaddy, Network Solutions, Tucows and Register.com, argue that the deal is unfair in its handling of pricing and management rights, and even suggested that the contract might violate monopoly laws.


ICANN was established in 1998 by the U.S. Department of Commerce to manage Internet domain names, and the organization contracted Verisign to perform many of its functions in 2001. The relationship hasn’t always been perfect: For example, Verisign filed a lawsuit in California that stated ICANN broke its contract when it prevented the company from providing its customers with services such as its SiteFinder and waiting-list service (WLS), which actually was one of the points addressed by the new deal.


The domain registration companies’ complaints about the contract extension, though, pertain to the potential for Verisign to change the terms of its agreements with them frequently and arbitrarily. Under the terms of the new contract, Verisign can increase wholesale prices by 7 percent during four of the next six years “without cost justification.” Experts believe that the company could reap more than $3 billion between now and 2012 as a result.


Additionally, according to the letter, “The proposed revisions would modify the renewal clauses so that the contract is essentially non-cancelable and ICANN’s right to rebid is taken away.” In other words, they’re locked into an ironclad agreement. Verisign can get away with this, they charge, because it essentially has a monopoly on the services it supplies, something the United States outlawed about a century ago.


Although the letter makes several good points about the nature of the deal, don’t expect Verisign or ICANN to budge. These organizations have some friends in very high places. (For more on this, see an </ENDTAG> column I wrote a couple of months back at http://www.certmag.com/articles/anmviewer.asp?a=1598&z=238.)

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