The company responsible for issuing the Internet's most popular domain names is the object of an antitrust investigation by the Justice Department
Network Solutions disclosed in documents filed July 3 for a proposed initial public offering of stock that it and its parent, Science Applications International Corporation, received Justice Department requests for information on June 27.
"SAIC received a civil investigative demand from the U.S. Department of Justice issued in connection with an investigation to determine whether there is, has been, or may be a violation of antitrust laws...relating to Internet registration products and services. Neither SAIC nor [Network Solutions] is aware of the scope or nature of the investigation," the filing states.
The investigation comes as Network Solutions is locked in a power struggle to hang onto the world's most lucrative and powerful Internet domain name registry. Network Solutions' government agreement, which ends in March, authorizes the company to assign second-level domain names--the "news" in "news.com"--used in the most popular top-level domains, including ".com" and ".org." The company has registered 1.3 million names in less than five years and collected almost $80 million in fees.
Network Solutions representatives have said the company will keep the registry even after the agreement expires because it has intellectual property rights in the database and software it has created and maintained under the agreement.
However, critics say the registry isn't for Network Solutions to keep, since it only held the monopoly on the seven domain suffixes (".net," ".gov," etc.) by the grace of a federal agreement. Whoever owns the so-called generic top-level domains would be not only rich but also powerful and could exercise de facto control over the Internet, critics worry.
Domain names that end in the ".com" suffix are in such demand that one recently sold for a record $150,000. Under its government agreement, Network Solutions fees are capped at $100 for the first two years and $50 for each year thereafter. In March, after the agreement expires, the registry might be free to charge what it pleases.
However, many of Network Solutions' customers have complained that the company simply hasn't been doing its job well. They charge it has bungled billing, cutting off domain names that have been paid for while keeping active others that are unpaid. Network Solutions acknowledges its collection problems, attributing them to the Internet's explosive growth rate, and says it's taking steps to remedy the problems.
A plan to take over and expand Network Solutions' registry was endorsed by 80 organizations and individuals in Geneva, Switzerland, in May. Opponents of that plan, however, have also sparked public discussion and hearings from the Commerce Department, leaving the future of the registries murkier than ever.
Network Solutions is also currently the object of an antitrust suit filed by PG Media in March. The PG Media suit alleges Network Solutions has conspired to keep other registries out of its lucrative business by exercising control over the Net's "root" servers--the computers that propagate routing information, something like phone books--across the Internet.