Network Solutions Settles Lawsuit, Almost

A U.S. District Court Judge dismissed nine of ten counts in a class action suit filed against Network Solutions, Inc. over Internet domain registrations, but reserved judgment on potential damages related to the Infrastructure Fund portion of registration fees.

The original lawsuit filed in October 1997 by William Thomas, et al., claimed that the National Science Foundation did not have the authority to allow Network Solutions to charge for Internet domain registration services, and to collect 30% of those fees for improving the infrastructure of the Internet.

Judge Thomas F. Hogan of the U.S. District Court for the District of Columbia issued an injunction earlier this year aimed at preventing the government from using any of the $46 million collected until a decision was made on whether or not the fees represented an illegal form of tax.

In a statement released today, Network Solutions acknowledged that the government’s right to use the fund was at issue, but said that Hogan reserved judgment on the Infrastructure Fund until a further court ruling.

Network Solutions added that Judge Hogan recognized that the U.S. Congress still retains the power to ratify the Infrastructure Fund by legislative action.

“We are very pleased with this decision as it relates to Network Solutions,” said Gabe Battista, Chief Executive Officer of Network Solutions, in a statement. “This decision amounts to business as usual for Network Solutions by affirming that our position as the exclusive registrar of domain names in .com .net .org and .edu is legally constituted and that NSI can charge a market rate for providing its services.”

Beginning April 1, 1998, an amendment to the National Science Foundation’s agreement with Network Solutions called for the elimination of the Infrastructure Fund portion of fees for all new domain registrations and renewals. The change resulted in a $30 savings to those registering new .com, .net, or .org domain names, lowering the fee from $100 to $70.

The move followed the release of the Department of Commerce’s Green Paper, “A Proposal to Improve Technical Management of Internet Names and Addresses.”

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