RealTime IT News

VeriSign Stays Whole, Could Win Name Game

In a surprising decision, VeriSign Inc. and the Internet Corporation for Assigned Names and Numbers Thursday said they had ironed out a deal in which VeriSign will cede control over .org and .net suffixes in exchange for keeping rights to manage .com names.

Good until 2007, the deal inked between ICANN and VeriSign, which holds the world's coveted list of major domain names in addition to a digital certificate business, would result in three separate Internet registries to replace the current single one.

More importantly, it means VeriSign will remain whole.

In what some may call the "New Deal" of the New Economy because of its monumental importance to businesses and individual registrants alike, VeriSign would continue to operate the .com Registry until at least 2007 and the .net Registry until at least 2006. Editor's Note: Further details of the proposition are posted at the end of this article.

The agreement came as a shock to many insiders because it seemingly overturns an October 1999 deal with ICANN and the U.S. Department of Commerce that required VeriSign to divest ownership of its registry or registrar businesses to extend the agreement to operate the registry for .com, .net and .org for another 4 years beyond November 2003.

Those with the inside track on the ICANN/VeriSign dealmaking have speculated that increased competition in the Web address market was a catalyst for the deal.

Indeed, VeriSign now sells between 40 and 50 percent of the world's 28.2 million Web addresses ending in .com, .net or .org -- a far cry from the disturbing monopoly it enjoyed up until 1999.

That VeriSign would have had to spin off its domain name business was a stipulation put in place because of rival registrars' perceptions that if VeriSign served as both a registry and registrar, it would get a significant advantage over competitors, according to VeriSign Executive Vice President of Corporate and Business Development Robert J. Korzeniewski.

"There was a concern that the so-called Chinese Wall between the two businesses wouldn't work," Korzeniewski told InternetNews Radio Thursday. "But I think in the community, other registrars have complimented us on what an exceptional job we have done and really putting a very, very serious Chinese Wall between those two businesses so that our registrar gets no advantage out of our registry."

Again, because of the increased competition, registry opportunities have opened up for other registrars.

Korzeniewski pointed to the fact that because of the awarding of new top-level domains at the November ICANN meeting in Marina Del Ray, Calif., a handful of VeriSign rivals, including Register.com (.pro) and Melbourne IT (.biz), have also gotten registries.

"The competition has been successful earlier and to a deeper extent than ICANN thought it would be and the community thought it would be, so it's a very competitive environment, one that we have a substantial business in, but certainly but it's been easy for entrants to come in and a number of them have been successful in that business," Korzeniewski said.

One registrar was pleased with the proposed plan -- Tucows Inc., the third-largest seller of domain names and a potential bidder on .org and .net.

In an e-mail sent to InternetNews.com, Tucows President and CEO Elliot Noss, who is decidedly pro-ICANN and believes "what's good for ICANN is good for the industry" said the proposition is fair.

"We expect a more level playing field," Noss said. "This agreement has not given the NSI Registrar business to someone else, nor has it introduced a new competitor. The only alternative to this deal that would be better for us would be if Tucows got the business. So we see this as a pretty good second choice."

But VeriSign's chief rival register.com doesn't see the proposition in as bright a light. Elana Broitman, director of po