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NSI rivals open Washington lobbying effort

As a key debate over the Internet's future comes to a head, a band of small domain name registrars hope to counter their much more affluent opponent, Network Solutions.

As a key debate over the Internet's future comes to a head, a band of small domain name registrars plans to storm Capitol Hill to counter the considerable lobbying efforts of their much more affluent opponent, Network Solutions.

About 20 registrars based in North America have hired a top Washington lobbying firm to approach Congress just a week before the first of two hearings called to explore controversial Internet governance issues. The registrars, recently designated to compete against Network Solutions (NSI) for sales of the most popular forms of Net addresses, are spending upwards of $15,000 on the effort, according to registrar sources.

Well-heeled America Online, the most prominent Net player among the new registrars, is not on board, however.

The behind-the-scenes campaign aims to influence the House Subcommittee on Oversight and Investigations, which next week will explore accusations that the Internet Corporation for Assigned Names and Numbers has overstepped its authority since being appointed to take over administration of the Net and end NSI's monopoly in the registration of domain names ending in ".com," ".net," and ".org."

Congress's input on the issue will have profound consequences for the future of domain name registration and management of the Net's critical technical functions. Any finding that weakens ICANN's position is sure to strengthen NSI, which has refused to cooperate with the new nonprofit by signing an operating agreement with ICANN.

In between the warring sides are the registrars, who are hoping to get a piece of NSI's million-dollar business. Tensions among some of the ICANN-appointed registrars and NSI have been increasing.

One of the chief problems is a contract NSI requires registrars to sign before they can begin selling domain names. While NSI says the rules are necessary to protect the functioning of the Internet, critics complain that the terms put them at a severe competitive disadvantage.

Led by CORE (The Internet Council of Registrars), the registrars have hired Susan Davis International to make their case before members of Congress. "The majority of the registrars are not sophisticated Washington insiders, and we're just trying to do our very best," said Ken Stubbs, chairman of CORE. "We're sorry we even have to do this."

NSI and its parent company, Science Applications International, are consummate players in Washington and have established relationships with lobbyists and policymakers. NSI has stepped up its efforts over the past six months to harness Congressional support, just as its battle with ICANN has increased, a spokesman for NSI said.

Still, Susan Davis is no newcomer to technology policy or controversial issues concerning domain names. Besides listing AT&T Wireless Services and nearly a dozen other high-tech companies as clients, the public relations and lobbying firm also promoted a set of recommendations by the now-dissolved Internet International Ad Hoc Committee. The proposal ultimately was scrapped.

Stubbs said he will be joined by Richard Forman, chief executive of Register.com, and Bob Connelly of InfoNetworks as they visit members of the Commerce and Judiciary committees in both chambers this week.

Among the complaints they plan to present are:

  • NSI's policy for transferring domain names from one registrar to another.
    Any change of registrar is treated as a new registration, requiring the domain name holder who may have paid a year or more in advance for a domain name to forfeit the credit to move. The policy encourages NSI's built-in customer base of millions not to switch to competitors, the registrars complain.

  • Prepayment of registry fees.
    Registrars are required to pay registry fees of $18 for two years to NSI up front. NSI, which is in the unique position of being both registry and registrar, is not held to this requirement, allowing it to offer customers to reserve domain names and pay for them later. Moreover, NSI has not signed an accreditation agreement with ICANN, which would require it to charge customers up front for domain names.

  • Bonding requirements.
    Registrars are required to provide a $100,000 "performance bond" that NSI can collect whenever it can show that the registrar's actions have hurt NSI's business. NSI is not required to provide any reciprocal bonds for registrars.

  • Ownership of the Internic site.
    The site, which used to point to a scaled-down service and provide generic information about registration options, now points visitors to NSI's full service.

    NSI has defended the requirements as a necessary protection of the $25 million investment it made into the software and hardware at the heart of the shared registration system. The Commerce Department permitted NSI to include the terms in an interim contract signed by the first five registrars testing the new system. Officials from NSI and Commerce are now negotiating the terms for the permanent contract registrars will sign, according to people at NSI and the Commerce Department.

    NSI has continued its lobbying campaign in recent months, achieving some impressive results. Last month, Rep. Thomas Bliley (R-Virginia), who's spearheading next week's House hearing, publicly criticized ICANN for charging $1 for every domain name registered. The Commerce Department also has called for ICANN to drop the plan.

    Network Solutions has continued to use the services of its long-time lobbying firm, the Dutko Group. NSI also has sent paid consultants active in the domain name controversy to various meetings convened by ICANN to give input on the controversy. Most recently, the Herndon, Virginia, company sent Jay Fenello, a frequent ICANN critic, to its meeting in Berlin, Germany, NSI spokesman Brian O'Shaughnessy said.

    NSI also pays Tony Rutkowski and Richard Sexton, two other prominent figures in the public debate, for consulting work on domain name issues.

    Another high-stakes hearing near and dear to the hearts of all players in the Net's administration will take place in two weeks when the House Subcommittee on Courts and Intellectual Property takes up trademark disputes over domain names.