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ICANN wins round in Internet suit

A federal judge hands VeriSign a preliminary setback in its dispute with the Net regulators over proposed new features in .com and .net addresses.

A federal judge on Tuesday handed domain name registry VeriSign a preliminary setback in its dispute with Internet regulators over proposals to add controversial new features to .com and .net addresses.

U.S. District Judge A. Howard Matz dismissed allegations that the Internet Corporation for Assigned Names and Numbers had violated federal antitrust laws in its attempts to bar VeriSign from adding services like Site Finder, which effectively took control of all unassigned .com and .net domain names and redirected them to the company's Web site.

During a hearing Tuesday morning, Matz gave VeriSign until June 7 to try again to make its antitrust claims stick, which the company said it would do. "We ultimately believe we'll prevail on the matter," VeriSign spokesman Brian O'Shaughnessy said. "This is part of the process...Antitrust certainly has a higher burden. When a court asks for more detail and more specificity in essentially proving your claim, that's what you do."

ICANN General Counsel John Jeffrey said in a telephone interview after Tuesday's hearing, "We're pleased that the judge is applying the law and looking at the statute very carefully."

VeriSign's suit claims that ICANN has transformed itself over the last six years from a modest technical coordinating body into the de facto regulator of the domain name system. One focus is VeriSign's now-suspended Site Finder service. Last fall, ICANN ordered VeriSign to halt Site Finder, which had drawn fire from some network administrators and software developers who said it was disruptive.

Matz's ruling does not cover ICANN's attempts to dismiss five other claims in the lawsuit that allege breach of contract. The reason: Because of a procedural twist, if the antitrust charges are no longer part of the case, it would likely be moved to state court. Matz is expected to release a written ruling of about 10 pages by the end of the day.

The dismissed antitrust allegations argued that ICANN violated the Sherman Antitrust Act by "restricting or purporting to 'regulate'" VeriSign's services. ICANN has "unreasonably restrained and restricted competition in the market for the operation of (top-level domain) registries," the lawsuit says.

VeriSign's breach-of-contract arguments say "ICANN issued the Suspension Ultimatum, demanding the suspension of Site Finder without...acting in an open and transparent manner and without having independent review policies in place." ICANN did convene open meetings in Washington, D.C., to evaluate Site Finder's potentially harmful impact.

ICANN is no stranger to controversy and litigation; it's been sued about 10 times in its relatively brief existence. But this lawsuit is unique, because it calls into question the organization's ability to function as a kind of Internet regulator.