The deal, which lasts until September 2000, requires the publicly traded firm to open up its Net name registration coffers to competitors by next summer but start transferring technical control of top-level domains to an international nonprofit board by March.
The transition has been in the works for more than a year, and Network Solutions' government contract to administer domain names was supposed to end last week. But important details are still being hammered out by a seemingly closed circle of players, including Network Solutions.
The outcome will affect the entire Internet. At stake are millions of dollars in domain name registration fees, as well as the protection of brands that have been built solely on the Net, such as "amazon.com."
Also on the table is the stability of the technical system underlying domain names, which are easier to remember than the 12-digit numbers behind them.
Under the agreement hammered out by the Commerce Department's National Telecommunications and Information Administration, Network Solutions has to develop by next June software to give future competitors access to top-level domain root servers so they can register the names.
In addition, Network Solutions will have to officially acknowledge the rules set up by the new nonprofit board and release its database, software, documentation, and technical expertise to the board. Once a shared registration system is set up, Network Solutions will get a set dollar amount, which hasn't been determined, to cover the cost of maintaining the main root server for domain names.
The agreement "delivers on the promises that the Department of Commerce outlined in the white paper and demonstrates Network Solutions commitment to robust competition in DNS management," Becky Burr, associate administer of the information administration, said in a statement.
Network Solutions won't likely have a problem deferring to the new board.
The company helped propose the composition and rules of the nonprofit board--the so-called Internet Corporation for Assigned Names and Numbers, or ICANN--and helped draft its bylaws along with the Internet Assigned Names Authority (IANA), a U.S. government-funded organization that runs the servers that handle the 12-digit Internet numbers behind domains.
Analysts also say that despite the changeover, Network Solutions will still have a corner on the market because Net registrants will probably still turn to it to set up names and renew existing registrations. Its government contract to run the registry for ".com," ".net," ".org," and ".edu" helped the company rake in $45 million in revenues in fiscal 1997, and revenue through June 1998 totaled nearly $37 million, the company said. The company has registered 2.3 million names.
The Network Solutions-backed plan was handed over to the White House last week along with two other proposals. But IANA's plan is expected to be adopted after public comment ends October 13.
The ICANN board is supposed to be neutral and include people who have not been involved in the ongoing, heated debate over the future of the domain name system.
The plan proposed that the new corporation will be run by a board of 19 people. The board will be chosen by an initial group of nine people, including members from Europe and Asia, who will serve until next September.
U.S. members will include popular technology pundit and Electronic Frontier Foundation board member Esther Dyson; Frank Fitzsimmons, senior vice president at Dun & Bradstreet; Gregory Crew, chairman of Australian Communications Industry Forum Limited; Hans Kraaijenbrink, chairman of the Association of European Public Telecommunications Network Operators, and Linda S. Wilson, president of Radcliffe College in Cambridge, Massachusetts.
The initial members will be charged with solving a number of complex issues, such as international trademark disputes over domain names. The group also will have to oversee technical details for opening up Network Solution's domain name registration business to competition, without disrupting the stability of the domain name "root" servers.