Why we should operate .net

Five companies officially announced this week their bids to win the contract to operate the master database for .net domains, a job currently performed by VeriSign.

VeriSign is trying to convince the Internet Corporation for Assigned Names and Numbers (ICANN) to renew its contract, which expires June 30. In addition to VeriSign, the other bidders are DENIC, a Frankfurt-based nonprofit that handles Germany's .de domain names; NeuLevel, which oversees .us and .biz domains; Afilias, which runs .info; and Core++, a global consortium of domain registrars, registry operators and telecommunications and networking companies.

Currently, VeriSign collects $6 for each .com and .net domain, which effectively imposes a price floor for those top-level domains. If ICANN grants a contract to a company that charges less for .net this time around, prices for those domains likely would fall. (VeriSign's contract to operate the master registry for .com expires in November 2007.)

CNET News.com spoke with Sabine Dolderer, a director of DENIC, while she was in Washington, D.C., and again in a follow-up phone conversation. They discussed ICANN, VeriSign and the .net competition process.

Q: Why is DENIC the best-qualified to run the .net registry?
A: One of the major advantages we have is long-standing experience in bringing highly reliable technical service in the registry area. We are coming from a truly not-for-profit background. We are very focused on our mission in providing stable services.

How would you characterize the job that VeriSign has done with .net?
It's difficult to describe. In some instances, they have abused their dominant position. I think it's important that there is some competition in that area. Only if there is competition will you see better services for everybody.

You're categorically denying you'd ever do anything like VeriSign's heavily criticized SiteFinder project?
Yes, definitely. We are in the position that we usually coordinate very very carefully with the community what services the community expects and do the rollout of our services in cooperation with the community. We will never just by accident start a new service that nobody expects.

When you say community, who do you mean?
The users and the registrars and the (individual owners of domains). We try to encapsulate any of their needs.

In your proposal to ICANN, how much will DENIC collect per domain?
It will be 10 percent less than the current fee (which is $6, making DENIC's fee $5.40). We expect in the long run that we will be able to go further down.

You have to be aware that this fee encapsulates a new 75-cent fee going to ICANN. So there's an even greater reduction.

What's your view of ICANN's fee of 75 cents per domain, which has attracted some opposition?
It's difficult to say as an applicant. It's strange, and it's not equally shared with all generic top-level domains. It's a burden to .net and the operator of .net. All the other gTLD (Generic Top-Level Domain) registries and registrants don't have to take that burden. It's a little unfair. I'm not sure if it's good for competition.

I haven't seen a deeply thought-through proposal about how the money raised from that fee will be spent. Maybe I'll change my mind.

Do you think that ICANN will try to extend its 75-cent-per-domain fee to other gTLDs?
I would expect that if they put it on other gTLDs they would reduce it from 75 cents. If you were to put it on .com, it would be a huge amount of money.

But I don't know what ICANN wants to do. I'm waiting for a proposal that clarifies the idea a little bit more.

What brought you to Washington?
We thought that most people hadn't heard very much about DENIC. It was to educate and give people a chance to meet with us.

When you were visiting staffers and members of Congress, did you ever get a feeling that they were suspicious about .net being run by a non-U.S. company?
Not really, actually. I found the meetings very open and productive. People in general are very interested and seem to be very open-minded.

In meeting with the Commerce Department, did you get a feeling that they had a point of view on the .net registry or were going to leave it in the hands of ICANN?
As far as I know, the Commerce Department wants to stay as neutral as possible.

When would you expect to reduce DENIC's proposed $5.40 fee even more?
As you might know, under the current registration structure with VeriSign, it's possible to register domains for more than one year--even two or three or four years. The fees that registrants have paid will not be refunded to their owners.

Will they be transferred to you?
No. (Eventually) it will be possible to reduce the fee much further. We have that information detailed in the proposal. We hope that people will not register with VeriSign for longer than June 2005.

Can you release the proposal?
The business plan detail is confidential. But what we have done is (calculated how much multiyear domain name registrations paid to VeriSign) will cost us. In the most optimistic approach, we believe we can reduce the fees in two years.

To what level?
The most optimistic scenario is that we would reduce the fees in 2008 to $4.80 and in 2009 to $3.60. That's the most optimistic figure.

You run the .de domain, but those domain registrations would be cheaper than .net. why?
It has something to do with .net having a worldwide customer base. So you have to provide many more languages and provide the service 24 hours a day because of time zone differences. The personnel costs are higher.