VeriSign faces challengers for .net

At least three rival companies will publicly bid to run .net, one of the Internet's most popular domains.

Jan. 25, 2005 12:00 p.m. PT

3 min read

As long as the Internet runs smoothly, few people think too much about its workings. But later this month, the system's underpinnings will become a topic of debate when rival companies publicly bid to run .net, one of the Internet's most popular domains.

This will be the first time that VeriSign's .net franchise will be challenged. While .net is not as ubiquitous as .com, it has more than 5 million registered domain names, which translates daily into millions of page views, 155 billion e-mail messages and some $1.4 million in commercial transactions, according to VeriSign, the Mountain View, Calif.,-based company that also manages .com.

About 40 percent of government domains allow access through .net, including the White House, the U.S. Senate, Homeland Security agencies and the Social Security Administration, making it a vital Internet transportation layer, said Tom Galvin, a spokesman for VeriSign.

So far, at least three companies in addition to VeriSign have indicated that they plan to vie for the franchise, which expires June 30. They are NeuStar, a Sterling, Va., company that runs .biz, and Afilias, which manages .info. A nonprofit firm in Frankfurt, DENIC, which manages Germany's 8 million registered .de domain names, has also indicated that it is planning to bid.

Selecting the domain manager is the job of the Internet Corporation for Assigned Names and Numbers (ICANN). But ICANN finds itself in a ticklish position because it has publicly clashed with VeriSign over the company's on-hold Site Finder service, which would redirect queries from inactive or defunct Web addresses to a search engine supported by advertisers signed up by VeriSign.

When ICANN concluded that was an unacceptable diversion and refused to allow the service, VeriSign accused the group of overstepping its role and filed a lawsuit. The initial case was filed in federal court but set aside. VeriSign refiled it in California state court, where it is pending.

To avoid "any perception of bias because of the litigation," ICANN has decided to appoint an independent body to evaluate the applications, which are due Tuesday, said ICANN Chief Operating Officer Paul Twomey. A .net administrator is to be selected three months before VeriSign's contract expires.

"We are on record that the operator could be the present one," said Twomey.

The important point, he emphasized, is that the .net operator must have the technical capacity and the security safeguards to keep the domain up and running smoothly. The bidding process is also a sort of dress rehearsal for about 10 new domain names that are to be introduced and put up for bidding, he said. They include .jobs, .travel, .post and .mobi (for mobile phone content).

If VeriSign loses, it would not be the first Internet registry switch. In early 2003, VeriSign, as part of its deal to keep control of .com, agreed on competitive bidding for the management of .org and .net. The Public Interest Registry, a nonprofit group, won the bidding for .org. VeriSign is lobbying actively to hold onto its .net stewardship, however, lining up written support from major players including Microsoft and IBM.



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At $5 a year for each domain name, VeriSign earns an estimated $30 million annually from administering .net--far less than its revenues for .com, which has 200 million names at $6 each.

Galvin said that because of its effect on the United States economy, deciding on the .net manager was "the biggest decision ICANN has had to make so far." More than a third of the top e-commerce sites--including much-visited sites like Walmart.com--actually use a .net server, he said, making the domain more important than the number of names would indicate. In fact, the 5 million registered names only amount to about 8 percent of all domain names.

VeriSign is campaigning on what it says is a stellar track record of keeping .net running continuously, though its rivals say that the California company has lagged behind on technological innovations that would make .net run more reliably. VeriSign has administered .net since 2000, when it acquired Network Solutions, which had operated the domain since 1992.