Fledgling registrar NameSecure.com today criticized alleged anticompetitive aspects of the deal in a letter signed by a prominent Silicon Valley antitrust lawyer Gary Reback, of Wilson Sonsini Goodrich & Rosati.
Another Network Solutions (NSI) competitor, Register.com, submitted similar comments this morning to a mailing list run by a delegation known as the Domain Name Supporting Organization, according to NameSecure's president, Jeff Field. Others are expected to endorse the complaints soon, Field added, although he said there has been little cooperation so far.
"Strangely enough, we were not contacted about joining forces," Field said. "This is a very competitive business."
Register.com did not immediately return a phone call seeking comment.
In their written comments, both companies voiced similar concerns over last month's deal, which settled a brewing dispute about Net governance between NSI and the nonprofit Internet Corporation for Assigned Names and Numbers (ICANN). The agreement, which still has to be approved by ICANN, also ensured that NSI will continue to run the Net's primary domain name registry as a wholesale business for four more years.
NameSecure's primary complaint concerned what it characterized as NSI's unfair position to profit from domain name registration renewals under the current proposal.
The more than 5 million registrations for ".com," ".org," and ".net" domains--which NSI had controlled under an exclusive six-year government contract--must be renewed annually after an initial two-year sign-up. For the past few months under a test-bed program, five companies have been able to compete alongside NSI. But in the future, unless a registrant requests a new registrar or cancels, NSI could get that registrant's business by default.
"One of the key principles in revamping the domain name system was to facilitate competition in the domain name registrar market," NameSecure's letter reads. "Instead, [the agreements] effectively hand NSI the ongoing registrar duties for the approximately 5 million registrants that were registered through the InterNIC system. Absent of any mechanism to address this problem, inertia is likely to bring NSI's new registrar business the majority of these renewals."
The InterNIC is the organization that maintains a database of domain names that allows users to search to see which names are available for registration.
NameSecure estimates that such residual business is worth $100 million a year.
Brian O'Shaughnessy, an NSI spokesman, said that ICANN and the Commerce Department have ultimate authority over the final shape of the proposal, and that his company is not involved in the public comment process. But he defended the current proposal, saying that most registrants currently contract with NSI, regardless of whether they were referred by another company.
ICANN's interim chairwoman, Esther Dyson, was unavailable for comment. The Commerce Department's Becky Burr, who oversaw the agreements, also was unavailable.
Another point of contention
Register.com's comments are more detailed but also focus on alleged anticompetitive elements of the deal.
The company wants restrictions placed on proceeds from NSI's sale of the domain name registry, which will most likely be separated from the company's domain name registrar business if the September proposal is adopted. Register.com estimates the registry could fetch $1 billion and wants to ensure that money is not plowed back into NSI's registrar business.
Register.com also wants ICANN and the Commerce Department to amend the current proposal to clearly limit NSI's ability to enter into exclusive contracts; to lift a requirement that all registrars receive prepayment before activating an account; and to change a proposal that hands pricing power to registrars that control two-thirds of the total registration fees.
"Given that, for the foreseeable future, NSI will account, on its own, for this percentage of registrar-level fees, NSI will have the sole approval right," the company wrote. It suggests giving pricing power to the five largest registrars instead.
Lastly, the letter calls for setting customer service standards.
NameSecure's Field said he only became aware of the renewal problem last week. "Names registered through us should be returned to us," he said. "Although it probably won't put us out of business, it will have a detrimental effect overall" if the proposal isn't changed.
Who will govern?
The critical comments come as ICANN is in the midst of filling three newly created board positions through its first elections, aimed at making the body more responsive to its constituents. As of today, two seats have been filled.
Representing Latin America for a three-year term is Alejandro Pisanty, a professor at National Autonomous University of Mexico. Representing Europe, in a two-year term, is Amadeu Abril i Abril, a professor at the Ramon Llull University Law School in Spain.
The last seat, which comes with a one-year term, could also be captured by a non-U.S. resident. In the running late today were Canadian copyright attorney Jonathan Cohen, New Zealand lawyer Peter Dengate-Thrush, and Nii Quaynor of Africa, who has been the chairman of the Developing Countries Networking Symposium of the Internet Society for several years.
The top candidates from the United states include Former Rep. Rich White (R-Washington) and NSI senior vice president Don Telage.
The results of that race were due tomorrow, but the election will not be completed until Monday because of technical difficulties in the online voting system being used.