ICANN, VeriSign make strange bedfellows

Tucows exec Ross Rader says proposal to end ICANN-VeriSign dispute could mean end of Net community's role in determining its future.

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.

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 the domain.

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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