ICANN OKs VeriSign Settlement

Internet Corporation for Assigned Names and Numbers’ (ICANN) board of directors Tuesday approved a settlement to end a dispute with VeriSign Inc. over the latter’s ability to introduce new services.

Under the settlement, ICANN allows VeriSign to renew its contract for management of the .com registry in 2012, with US$6 from each domain registered going to ICANN. During the six years in between, VeriSign may raise domain registration fees by a maximum of seven percent in four of those six years.

VeriSign must also pay a one-time US$625,000 fee to ICANN, for “meeting the costs associated with establishing structures to implement the provisions of this agreement,” a copy of the settlement on ICANN’s Web site said. VeriSign representatives could not be reached for comment.

The domain registrar sued ICANN in 2004 over what it saw as the governing body’s resistance to wanting to roll out new services, including domain registry wait-listing.

ICANN’s Board voted nine to five in favor of the settlement agreements with one director abstaining, the organization said in a statement. The U.S. Department of Commerce must approve the settlement for it to be finalized, ICANN said.

ICANN is an independent organization established to manage and coordinate the Domain Name System (DNS) to ensure that every address is unique and that all users of the Internet can find all valid addresses. VeriSign manages the registry of both .com and .net domains, although other companies may resell registry services for them.

The settlement has already provoked reaction from members of Congress, ICANN watchdog groups, and other domain registration companies over the control the deal gives VeriSign over the .com registry.

In a letter dated February 17 to Secretary of Commerce Carlos Gutierrez, Rep. Rick Boucher (Democrat for Virginia), a member of the House Judiciary Subcommittee on the Internet and Intellectual Property, expressed reservations about the settlement. “I am concerned that the agreement would assure VeriSign the perpetual right to manage the .com TLD (top level domain), regardless of the maximum price it charges for initial and renewal registrations,” the letter says. Boucher cites Article IV of the agreement, which states the contract will be renewed upon expiration except in the case of a serious breach by VeriSign.

Boucher sent a similar letter, also dated February 17, to Assistant Attorney General for Antitrust Thomas O. Barnett, stating, “I urge your careful review of what appear to me to be the serious anti-competitive implications of the proposed settlement.”

BulkRegister LLC, a VeriSign registration rival, announced its opposition to the settlement, stating that control of .com domains will potentially generate as much as US$3.29 billion for VeriSign. “The revised agreement also gives VeriSign unprecedented control of the .com registry by allowing it to automatically renew its management of the registry in 2012 without first going through a competitive bidding process,” the company said in a statement.

“Voting in favor of a bad deal doesn’t change the deal’s dynamics, it just confirms ICANN’s refusal to listen to legitimate criticism coming from every corner of the Internet community,” said John Berard, spokesperson for the Coalition for ICANN Transparency (CFIT), a watchdog group, in a statement.

“Increasing prices without justification, allowing a monopoly to expand without review and giving VeriSign perpetual ownership of the .COM registry were wrong when they were first proposed and they’re still wrong,” the statement said.

CFIT called the settlement “one of the most important issues ever to confront the Internet community.”

Don’t forget to keep checking in at our CIO News Alerts page for updated news coverage.

-Steven Schwankert, IDG News Service