The action is the final step in sealing a deal between VeriSign and the Internet's governing body that outlines who will be responsible for administering the popular .com domain in the coming years. VeriSign's Network Solutions once held a government-granted monopoly over registering and maintaining all names ending in .com, .net and .org, but the federal government is now allowing other companies into the market.
Many had expected the deal to be approved Monday, when the Commerce Department first began discussing the issue, but commissioners had some concerns about the arrangement.
The agreement reached Friday is little changed from the original proposal. The alterations require the company to give up control of the .net domain earlier than planned. The company also will be subject to yearly audits to determine that its registrar and registry businesses remain separate.
"Our goal throughout the negotiating process was to make sure consumers reap the benefits of an open, stable and competitive Internet. These agreements achieve that goal," Commerce Department General Counsel Ted Kassinger said in a statement announcing the deal.
Under the agreement between the company and the Internet Corporation for Assigned Names and Numbers (ICANN), VeriSign will remain the registrar of the lucrative .com domain, but it must relinquish control of the .org domain by 2002. It also will have to compete for the rights to continue administering the .net domain starting in June 2005. The company will run the .com registry until at least 2007.
The deal allows VeriSign to continue to operate both a registrar and a registry, replacing an earlier proposal that would have required the company to sell the registry portion by May to encourage competition. The registry unit charges registrars to add domain names to a central database, acting as sort of a wholesaler, while the registrar sells domain names directly to the public.
ICANN determined that competition in the industry is strong enough to allow VeriSign to continue operating both divisions.
VeriSign faces growing competition from a slew of new companies hoping to cash in on the seven new top-level domains--.biz, .aero, .name, .info, .museum, .coop and .pro--to be debuted as early as this summer.