Domain Name Controversy Explodes

[Sydney, AUSTRALIA] Internet industry representatives were up in arms following an
announcement that Melbourne IT would
provide 80 percent of the funding for regulatory body
.au Domain Administration (auDA).
Melbourne IT has a monopoly on domain name registration in
Australia, but chief executive Professor Peter Gerrand said the funding
would not mean it would have an unfair advantage over potential competitors.

In return for the funding contribution, Melbourne IT has been recognized as
the sole provider of domain names until the auDA committee
completes its regulatory framework for the introduction of competition in
the domain sector.

Gerrand refused to comment on claims from competitors, such as Net Registry that auDA is
Melbourne IT’s “kicking dog”. He did, however, refute claims that the
funding provided would affect auDA ‘s development of its competition model.
“No, not at all,” he said. “AuDA developed a timetable following advice
from the Federal Government and the ACCC in terms of a proper process for
public consultation. They need funding to support them and they’ve asked
each of the six monopoly registrars [such as, which
registers domain names, and iiNet, which registers] to
contribute in proportion to the current market share. As we have about 80
percent of the market, we’ve agreed to pay 80 percent of the costs.”

He also denied that the funding was the reason behind the delayed
implementation of competition in the industry. “They’ve recognized that to
do it properly more time needs to be dedicated to industry consultation.
The industry is very young and its been a learning process. Some members
have no experience in proper self-regulation,” he said.

NetRegistry managing director Larry Bloch saw other reasons for the delay
in implementation of competition. “The government is using any means
possible to delay implementation of competition because they don’t want it
to backfire on them. There’s no need for this extensive public consultation
on an issue which is comparatively easy to resolve. The government set up
the body but is making it jump through hoops, and won’t give it control. If
I were on the board, I would resign, and I would recommend the rest of the
board did too. After two years it has achieved nothing: no reduction in
domain costs, no competition, not even an increase in debate over these
issues. The whole process has more or less been a whitewash.”

Bloch was equally unimpressed by claims from Professor Gerrand that Melbourne IT
was the only organization which was equipped to supply the domains.
Professor Gerrand said “We’ve put effort into growing the market, providing
discounts for volume, and forming relationships with the ISPs and providing
a really strong help desk service and service level guarantees on
performance. We’re the only one serious about providing good service.”

“Well that’s just complete and utter rot isn’t it?” Bloch responded. “Most
companies that provide domain name services would be committed to a high
level of service, as would Net Registry. I don’t think its [Gerrand’s]
place to speak for other companies.”

Bloch criticized statements made in Melbourne IT’s announcement of the
funding, which indicated it would continue to have the monopoly on
until October 2001. “I would question whether that’s a misrepresentative
statement to the market as the government may decide to implement
competition sooner.” Melbourne IT’s shares surged 25 cents to $10.30 on the

Melbourne IT’s potential influence on the auDA board does not end with the
80 percent funding announced. Two representatives of the company are on the
board, an

d it has attempted to influence the selection of other members.
“There was the option of adding two independent directors, to the auDA
board, with experience in governance principles industry self-regulation.
We haven’t been invited to veto any names but one of my executives is a
board member and has the opportunity to suggest names. We’ve been told some
names which are going forward and we’re very pleased with those candidates.
I am sure the decision will be made based on the merits of individuals not
because any company has supported them. We’ve been reluctant to make
suggestions in case that meant the people selected would be perceived to be
biased. We’d rather [selections] came from others, and we will provide our
advice to them.”

Professor Gerrand predicted big changes in the domain name industry after
competition is introduced. “If anyone thinks it’s just going to be
Melbourne IT versus Net Registry and a couple of smaller players they’re
completely deluded. The local market’s going to be swamped with bigger
competitors from overseas.”

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