Internet users rarely give any more thought to domain names than the oxygen
they breathe. But, like clean air, Net names aren't free and some
businesses would love to control the supply.
That's why later this week or early next week, the Clinton administration is
expected to announce a plan to turn over the stewardship of domain names
to the private sector.
For the past several months, President Clinton's Internet policy adviser, Ira Magaziner, has been
sitting in the referee's chair, trying to judge a game with many teams and
even more competing interests.
So far, the plan appears to be leaning in the direction of a loose coalition
of independent businesses that favor individuals retaining rich pieces of
the domain name pie in the form of databases of domain names.
One of the less controversial points appears to be the government's plan to
transfer power of the Internet
Assigned Numbers Authority (IANA)--the body that oversees the actual
mechanism that makes domain names function--from the Defense Department
to the private sector, where it would be managed by a private nonprofit
company.
And the group that expected it would get the lion's share of the
business--the group that for months has been promising seven new top-level
domain names, even though it never had full authority to
deliver on those promises--looks like it is going to be disappointed.
The transfer is risky: If it is not completed in an orderly
way it could literally bring the Net to a halt. The domain name system
controls everything from the way valuable Net addresses are distributed to
delivery of information.
No one is more aware of that than Magaziner and those who have been
discussing, studying, and holding hearings about this issue since last
March. Those meetings have intensified dramatically in the last few weeks
as the government attempts to achieve what some say is impossible:
consensus on the issue.
"There are a lot of interests, and the community of Internet stakeholders
is growing and expanding as rapidly as the Internet itself is expanding,"
said Becky Burr, the senior Internet policy adviser for the Commerce Department, which will
release the so-called green paper that outlines the government's transfer
of power. "It's a very delicate process. Our goals are to end the U.S.
government management of this in a responsible manner that preserves the
stability of the Internet, and to end the government's involvement as soon
as possible."
Whenever a Netizen registers a new domain name, it costs money. Right now
Network Solutions (NSI) holds the lucrative government
contract to register domain names under the most top-level domains (TLDs),
such as ".com," ".net," ".org," and ".edu."
But NSI's contract with the National Science
Foundation runs out in September.
And there are a lot of companies, including NSI, lining up to
try to pick up a piece of the business.
As for NSI, the company has publicly stated that it supports competition.
In fact, it has been preparing for the inevitability of its contract ending by creating a new
registration service at WorldNIC.
Magaziner is planning to split the tasks of those who register domain names
and those who run the actual databases. Right now, NSI not only runs the databases for its TLDs, but it also runs the registration services at InterNIC. Under Magaziner's plan, NSI would
have to allow others to also register the TLDs it runs.
NSI's claim that it is in favor of competition may
sound like a politically sensitive answer--and it is--but it also makes good
business sense.
Competition among those who register domain names would
open up the business to free price-setting. Right now, NSI is held
to a $100 price point for a two-year registration of a new domain. But valuable domain names often are resold for
thousands--sometimes tens of thousands--of dollars. Registrars with valuable
domains could reap big profits from a system where they can set prices.
Along with the money that companies would get directly from registration,
NSI has been
putting aside a portion of its domain name fees to "preserve and enhance"
the infrastructure of the Internet. The fund now stands at
some $34 million.
Congress has tapped into some of that money, but questions remain as to how the
rest of it will be used.
But the bigger question is, who will run the show? While the struggle to get all or some of that business is being waged, there are plenty of
accusations of greed and anticompetitive behavior to go around.
Though Magaziner is hoping to make a decision that will balance all sides,
when he finally does release the green paper, there will be
winners and losers. And all sides will, no doubt, continue to add their
input to the wealth of feedback both Magaziner and Congress already have received.
The paper was originally due in November, but has faced several delays due
to the complexity of the issue.
"You have sort of a collision of different perspectives--the collision
between values associated with intellectual property, network
administration, growth of the Internet, and the free market," said Brian
Kahin, a senior policy analyst for the White House and chairman of the
interagency task force on domain names. "And nobody really knows how much
money is at stake. We know people will pay a lot for domain names, more
than they pay NSI to register them."
While there are plenty of sides to this story, right now the main opposing
camps have dominated discussion on the issue.
On one hand, there is the Policy Oversight
Committee (POC), also known as iPOC, a powerful international group
that has been working for several months on its own domain name plan.
The POC is basically a savvy group that represents the old guard of Internet
programmers and academics, many of whom have run the domain name system by
consensus from the beginning of the Internet. POC, which grew out of the
Internet Ad Hoc Committee (IAHC), formed a group called CORE, the Internet
Council of Registrars, a group of 88 businesses worldwide that each paid
$10,000 to start their own registry with seven TLDs.
The POC advocates a plan in which it would start seven new top-level
domains and collectively share the ownership of them among all members of
Council of Registrars. Council members, in turn, would be able to sell registrations of the domain names.
The POC's idea is that competition among the CORE members would keep individual
prices down and provide real competition to Network Solutions.
Members of the POC and CORE have been promoting the plan for months as a done
deal, saying that it had reassurances from high-level government officials
that the plan was a go. In fact, not only has the POC collected money from
registrants, but its registrants, in turn, have been out on the market
selling its seven domains.
But the problem is, for the POC's business plan to work, the government
has to accept it as a whole. Right now, the government is taking a cautious
approach of limiting the total number of TLDs that any one party can have
to prevent chaos during the transfer of power.
The plan now is to allow each party that meets a certain set of criteria--which is still being developed--the authority to run one to two TLDs.
For instance, one company would own the database with all the ".web" or
".shop" domain names, should those TLDs be accepted.
At the same time, the plan calls for there to be competition to actually
register the names. So several companies might be able to go out to the
Internet public to sell domain names in ".web or ".shop," for example, while another company would manage the physical database.
But even if the plan is expanded to allow each company to have more than
one or two TLDs, it's unlikely that the POC would get all seven. If the government did that, it would probably have to allow any group or
entity to have seven TLDs, and that could prove to be too many.
Nobody really knows how many TLDs the Internet can handle, both from an
infrastructure and a social point of view. The government is more
likely to err on the side of caution--that is, fewer domains.
That could spell disaster for the POC, which has hundreds of thousands of
dollars invested in its plan.
If its business plan fell apart, that would be just fine with many on
the other side (although in the strange universe of domain names, there is
an overlap between the two sides), who for months have been critical of the
POC plan. That side is primarily composed of individuals and businesses that
have long been fighting to get their own TLDs accepted into the
registration system.
While not an organized or unanimous group, that side
largely believes that to have true competition, the domain name system
must be opened up to all comers.
And so far, the government plan--whether intentional or not--appears to
favor their philosophy over CORE's.
"We're extremely ecstatic that the process that Mr. Magaziner has used and
the conclusions they have come to," said Jay Fenello, president of
alternative registry Iperdome."We've
won the war, but we're not sure if we've won the battle yet. We think the
U.S. government is doing the best for the long term of the Internet."
He also called CORE's plan exclusive and anticompetitive, and said
Magaziner's plan as it now stands would represent a triumph of the Davids
over the Goliaths.
"For the most part, we're a small, rag-tag group of people who have felt
philosophically there was something wrong here, and we think the U.S.
government agrees with us," he said.
Members of the POC, on the other hand, are taking the offensive, trying to
convince Magaziner and others that their plan is best.
POC members say allowing individual companies to run TLDs would fuel
increases in price within each TLD. For instance, the owner of ".web" could
compete with other TLDs by offering a good price, and then the next year
turn around and sell the same TLDs for three times the price. Companies that
have invested in the domain name would be stuck with the tab because it is
too expensive to change domain names, they charge.
Backers of the plan, however, call the criticism misleading, adding that
any TLD manager that dramatically raised prices would go out of business, even with the high
cost of shifting domain names.
The best idea, said David Maher, chairman of the POC, would be for the
government to simply say that it is getting out of the domain name
business entirely, without presenting any sort of plan.
"Magaziner had a grand scheme for what I would say is micromanaging the
domain name system, setting up competing registries," Maher said. "The
reaction of the CORE was that, you're making all these changes, many of
which will have a severe impact on all our businesses. This won't work. We
can't blindly say go ahead. Some of this would have such a serious impact
that CORE would be out of business."
"CORE met and concluded the best way to approach this would be to ask the U.S.
government to get out, just withdraw at the end of the contract period," he
said.
Of course, if that were to happen, it would mean a victory for CORE.
"Jon Postel [who runs the Internet Assigned Numbers Authority] said he wants to implement the CORE and POC
proposal," Maher said.
In response to questions about the potential anticompetitive nature of
that move, Maher was clear. "We're convinced that CORE has the only viable
plan that anyone has proposed," he said. "There are simply no other [viable] plans in
existence."
But in spite of what may appear to be retractable viewpoints, the
government is still determined to come up with a workable solution.
"It's really important to us to stress that it's not in anybody's interest
to split the Internet," said the Commerce Department's Burr. "We need to
proceed to achieve consensus, and that's what we've been working towards."