U.S. to Hand Domain System Reins Over to Private Body

In its eagerly awaited final
aimed at ending the government’s involvement in the Internet’s
naming system, the Clinton administration today decided to leave most of
the major decisions up to a private, nonprofit organization to be
comprised of a cross-section of individuals representing the Internet

The new plan shies away from a series of earlier proposals, including one
that advocated the addition of more new domain names, in favor of a
self-governing approach to be directed by the representative body.

The government plans to phase out its involvement in the naming system by
Sept. 30, 2000, but will continue to oversee the transition to the private
sector during that time.

While the white paper does not spell out how exactly the new nonprofit
corporation will be assembled, it does provide some recommendations as to
the kinds of policies it should adopt. These include:

  • setting policy for and direct allocation of IP number blocks to
    regional Internet number registries;
  • monitoring operation of the authoritative Internet root server system;
  • overseeing policy for determining the circumstances under which new
    Top Level Domains (TLDs) are added to the root system;
  • and coordinating the assignment of other Internet technical parameters
    to maintain universal connectivity on the Internet.

The white paper also opens the door to increased competition for Network Solutions Inc., the
Herndon, VA-based company whose exclusive five-year contract with the
government expires in September.

The government said it plans to ramp down its agreement with Network
Solutions and will require the company to make commitments regarding
pricing and equal access to ensure a more competitive domain name
registration market emerges.

The plan also calls for Network Solutions, registrar of the “.com”, “.org,”
and “.net” top-level domains, to recognize the role of the new nonprofit
corporation, cooperate on the implementation of DNS policy, and establish
licensing terms related to new and existing gTLDs.

During a conference call today, Network Solutions’ chief executive officer
Gabe Battista welcomed the government’s plan and the increased competition
his company expects to face.

When asked where he expects that competition to come from, Battista said
that no one company has stepped forward to compete directly with Network
Solutions, and added he did not know exactly who was prepared to take up
the challenge.

Battista insisted, however, that his company predicted back in April 1997
that competition was approaching for registration of the “.com,” “.org,” and
“.net” domains, and that Network Solutions is prepared to fight it out in
the marketplace.

“It now is time for all major stakeholders to move forward with this
market-focused process as we work together to ensure the Internet’s
future,” said Battista. “Individuals and businesses worldwide should
appreciate the need for the stability and security of the Internet as
reflected in the U.S. government’s plan.”

Wall Street appeared to react favorably to the role Network Solutions will
play in the naming system transition; the company’s stock was up +5 9/16 to
38 1/16, a +17.12% increase, as of 3:15 p.m. EST today.

Reaction from the Internet community to the white paper appears to be quite
positive today, with a range of companies and organizations putting out
press releases voicing support for the government’s proposed hands-off

Among the naysayers, trademark and intellectual property firm Thomson & Thomson said the final
plan does not adequately address how to prevent the conflict between domain
names and trademarks.

“The current process for creating and protecting effective domain names is
a minefield. The white paper does nothing to change this,” said Tom
Barrett, vice president of Thomson & Thomson. “These uncertainties
surrounding domain names will continue to hamper the growth of the Internet
as a vehicle for electronic commerce.”

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