RealTime IT News

Verizon's Cybersquatter Based in China

OnlineNIC, the cybersquatter against which telecommunications giant Verizon was awarded a record $33.15 million judgment recently, is one of the largest domain name registrars in China, InternetNews.com has learned.

According to the records of ICANN, the Internet Corporation for Assigned Names and Numbers, which manages the assignment of domain names and IP addresses for the Internet, OnlineNIC, headquartered in Xiamen, China, was accredited by ICANN on October 21, 1999.

The documents show that OnlineNIC has registered more than 300,000 domain names. ICANN did not return calls for comment by press time.

However, Verizon (NYSE: VZ) may not be able to collect on the judgment because it has not been able to locate any of OnlineNIC's U.S. offices, although the company is registered in San Francisco.

According to OnlineNIC's Web site, the company met with .ORG, the Public Interest Registry, in December to discuss ways to work together to increase .ORG domain sales.

Public Interest Registry is a not for profit corporation created by the Internet Society, or ISOC, in 2002 to manage the .org top-level domain. It took over the operation of the domain from VeriSign (NASDAQ: VRSN) on January 1, 2003. The ISOC is an international, nonprofit organization founded in 1992 to provide leadership in Internet-related standards, education and policy.

Crystal Peterson, marketing communications manager at Public Interest Registry, confirmed to InternetNews.com that the organization held talks in China with OnlineNIC in December about growing the .ORG registry.

It's a different world out there

Verizon's options for collecting on the judgment seem to be limited, and the company was cagey about the issue. "I don't know if we've been in contact with them in China," Eric Rabe, Verizon's senior vice president, media relations, told InternetNews.com. "I suspect the legal situation is different there."

Martin Reynolds, a distinguished analyst at research firm Gartner, is doubtful that Verizon can collect its money. "You can only enforce U.S. laws that accept it, and generally that means you can only collect in the U.S.," he told InternetNews.com.

Scott Christie, a partner at law firm McCarter & English and a former Federal prosecutor specializing in IT cases, said that U.S. firms seeking to collect on judgments handed down by U.S. courts from companies based abroad have little recourse.

"Even if they win a default judgment because the defendant did not turn up in court, it may be more expensive than it's worth to levy against their assets if they don't have clearly identifiable assets in the United States," Christie told InternetNews.com.

Verizon can track down one of OnlineNIC's creditors in the U.S. - ICANN - because the registrar has to pay an annual fee, Steven J. Metalitz, an attorney at law firm Mitchell Silberberg & Knupp, told InternetNews.com by e-mail.

It could try to get ICANN to revoke OnlineNIC's accreditation if the registrar's officers had criminal convictions, but the Verizon case was a civil case, so this does not apply, Metalitz said. There might be other grounds on which ICANN could revoke the accreditation but this has rarely happened, Metalitz added.

In November, ICANN revoked the accreditation of Estonian registrar EstDomains after learning its president, Vladimir Tsastsin, had been convicted of credit card fraud, forgery and money laundering.

Describing the de-registration of EstDomains as an unusual move, a source said ICANN has come under scrutiny for its lack of action against registrars who have engaged in dubious behavior. "They've been very sensitive to criticism that they haven't taken any action," the source told InternetNews.com.

Update corrects spelling of Peterson's name.