ICANN, VeriSign Come to Terms on Landmark Deal

Amid Congressional scrutiny, the Internet Corporation for Assigned Names and Numbers (ICANN) and VeriSign, Inc., have worked out an agreement designed to allay concern about the domain name registration provider remaining whole.

On a teleconference Monday morning, the 12-member board of the the Internet governing body voted in favor of a contract extension allowing VeriSign remain a combined registrar and registry business and keep its hands on the lucrative .com domain until 2007, with concessions. Three members voted against the measure and one abstained.

Among the concessions, after VeriSign’s contract with the .org registry expires in 2003, it will give $5 million to the as-yet-unnamed non-profit organization that takes over management of the domain.

Also, the company will fund up to $200 million for the research and development of a universal WHOIS database to list the name and owner of every domain name in the global Top-Level Domain (of ICANN-approved domains of course).

The .net domain will stay with VeriSign until 2006, when it will go up for competitive bids.

Vint Cerf, ICANN chairman said the contract was a good deal for the Internet community.

“These new agreements are a significant improvement over the original agreement negotiated in 1999,” Cerf said. “The DNS world and ICANN have changed enormously since then, and VeriSign’s acquisition of Network Solutions in 2000 means that company has undergone significant change as well. These new agreements reflect both the increasing maturity of ICANN and evidence that VeriSign wants to be a cooperative participant in the ICANN process.”

With all the spontaneity of genuineness of the Eminem/Elton John hug at the Emmy’s this year, emails sent by principals at the Internet Corporation for Assigned Names and Numbers (ICANN) and VeriSign, Inc., this weekend set the stage for the ICANN’s approval, outlining what they hoped were worthy amendments to its controversial contract negotiations.

In an open email to VeriSign’s Stratton Sclavos, president and chief executive officer of VeriSign, Inc., M. Stuart Lynn, the ICANN president and chief executive officer brought up several proposals that would seal the deal between the ICANN and VeriSign.

Public outcry to the proceedings has been loud and numerous, and the emails this weekend might have done more harm than good in the eyes of many.

Ellen Rony, co-author of “The Domain Name Handbook,” said the email letters this weekend were a sign that the ICANN doesn’t understand what a public forum is all about, and that concessions are just tokens to keep other registrars happy.

“These are things that VeriSign and ICANN shouldn’t be deciding between themselves,” Rony said. “This is supposed to be international, global and concession-based and this is something that these two major players should not be hammering out on the weekend before they vote.”

At issue is what many consider the ICANN’s policy flipflop after announcing it was allowing VeriSign to keep its combined registrar and registry business, in exchange for concessions.

In 1999, the ICANN promised the Department of Commerce it would require VeriSign to divest ownership of its registry and registrar businesses.

On top of that, critics say, the community was given less than a month to sort through and debate the merits of a very complex contract renegotiation.

“This (policy change) is huge and to just spring it on the world the way its been done instead of giving it time and letting registrars weigh in and think about it. I think the whole thing is offensive to the people who have been trying to work within the ICANN structure.”

Hoping to appease the many registrar complaints about VeriSign’s billing structure, Lynn called for VeriSign to drop the one-time $10,000 charge for access to the SRS and $6 transfer fee for every domain name switched from one domain to the other.

Lynn also said VeriSign’s volume discount schedule considerably favored companies like Network Solutions, Inc., which it acquired last June, a practice that should be discontinued.

Another sticking point for competitive registrars was VeriSign’s registry business requiring 60 days to comply with changes in registry services, prompting Lynn to call for 90-day notification.

VeriSign officials said they would divest its .net and .org registries while keeping its hands on the lucrative .com registry until 2007, in addition to keeping its company structurally intact.

Sclavos agreed to the terms in the responding email, saying his company wanted to do what was best for the Internet community.

“VeriSign has been, and will continue to be, both a good corporate citizen in the larger sense and a responsible participant in the Internet community and we’ve looked at the various concerns that have been expressed from that perspective,” Sclavos’ statement read.

Bruce Keiser, president and chief executive officer of domain name registrar Namezero.com, said that the agreement should be good news for the registrar community.

“In the long term, I think the deal is pretty good,” Keiser said. “There are registrars going out of business all the time, and eliminating the fee will save us money, even though the transfer fee doesn’t make up a large part of the costs we incur.”

Monday’s decision still requires the approval from the Department of Justice before it can be implemented, a process that will be scrutinized closely by Congress.

Just last month, the U.S. House of Representatives sent a letter to the Commerce Department “encouraging” them to ensure that the proceedings are conducted properly, as promised by Vint Cerf, the ICANN chairman, in hearings conducted on the Hill last month.

“…We urge you to exercise your oversight authority to ensure that ICANN’s final decision is made and implemented in a transparent fashion,” said Chairman of the Committee on Energy and Commerce Rep. (R-LA) W.J. Bill Tauzin in his letter.

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