ICANN to can NSI's domain-name monopoly
April 23, 1999
by Elizabeth Wasserman
WASHINGTON, D.C. (IDG) -- In a challenge to the de facto monopoly over the registration of Internet domain names, the Internet Corporation for Assigned Names and Numbers has selected five companies to compete in the test of a new shared system for registering Web addresses in the .com, .net and .org domains.
Big guns America Online and France Telecom top the list chosen by ICANN, the nonprofit entity selected by the U.S. government last year to assume control of the administration of domain names. The other companies are: CORE (Internet Council of Registrars), a consortium of registrars in 23 countries; Melbourne IT, an Australian e-commerce company; and New York-based Register.com, where success springs from a great name and no charge for reselling registrations.
The five companies will be the first to compete with Network Solutions, a Herndon, Va., company that has held a government-sanctioned control over registration in those domains for the past six years. After the 60-day test period beginning April 26, ICANN officials said they plan to accredit up to 29 additional registrars to compete in the burgeoning registration market, including AT&T, Verio and a host of smaller Web hosting companies and domain resellers.
At a press conference in Washington, D.C., a U.S. Department of Commerce representative announced an agreement with NSI on two important points in the test process. Department General Counsel Andrew Pincus said the agreement encompassed contractual language and the wholesale price the companies will pay to NSI for maintaining the domain-name registry. That interim price will be $9 per name, per year, with a two-year minimum registration.
NSI now charges $70 for registering a name for the first two years, a price established under a 1992 cooperative agreement with the U.S. government. The company had proposed a $16 fee per name for a wholesale service which some in the Internet community had valued as low as $2 per name.
The announcement of the five test registrars capped a process in which 26 additional companies applied to compete. One, AT&T, chose to postpone registration until after the test is successfully concluded, which ICANN hopes will be at the end of June. An ICANN representative said today that the work has just begun.
"Our job is not simply to accredit registrars. It's to make sure the test works," said Esther Dyson, interim chairman at ICANN. Borrowing a historic phrase from the Apollo 11 mission to the moon, Dyson noted that ICANN's work was charting a course on a new frontier. "It's a few small steps for three domains," Dyson said, "and one giant leap for domainkind."
ICANN President Mike Roberts said the board of the organization considered several key factors in making its selection. The criteria included financial and technical ability to compete in the test, geographic diversity and the uniqueness of the company's business model. The applicants also paid a $2,500 fee to ICANN. Once accredited, registrars will pay a $5,000 annual fee to ICANN and a one-time $10,000 fee to license software from NSI.
The companies selected are certainly diverse. France Telecom is one of the world's leading telecommunications firms, with operations in more than 50 countries and 24.6 billion euros in 1998 revenues. The company last year acquired Oleane, the leading Internet service provider to the French business community. France Telecom also operates the country's leading consumer ISP, Wanadoo, and a new portal, Voila. "As a global telecom provider, we need global solutions," said Olivier Muron, VP of Internet governance issues at Voila.
CORE is a nonprofit association of domain-name registrars that was created in 1996 to fund, develop and run a shared registry system when the Internet Society was spearheading an effort to open the domain-name system to competitors. Ken Stubbs, chair of the CORE executive committee, said that 20 to 30 of CORE's registrars would immediately participate in the test. "This is the first of many important changes that will ultimately result in a more competitive and open process for management of the domain-name system," Stubbs said.
Operated out of the University of Melbourne, Melbourne IT is a private company with a business division, Internet Names Australia, which administers the .com.au domain for Australian businesses. It is the largest commercial administrator of domain names based on country codes in the Asia-Pacific region. It was also the first domain-name registrar in the world to offer trademark-registration checks and money-back guarantees if a name wasn't registered within a certain period of time, according to Peter Gerrand, the company's chief executive.
Register.com, a division of Forman Interactive, works with GeoCities, Theglobe.com, Spree.com, Ziff-Davis and other companies to help provide Web solutions for small and medium-sized businesses. One founder of that company, Rich Forman, asked for cooperation from NSI employees. "We're poised at the doorstep of a large and exciting market," he said. "By working together we will all be able to explain to consumers what is a domain name, the importance of a domain name and how it works."
With more than 17 million members, America Online is the world's leading online service. The company has diversified its Internet businesses through acquisitions of such companies as Netscape Communications and the promotion of such brands as the ICQ chat service.
"Today's announcement to us is proof-positive that open, nondiscriminatory competition is alive and well on the Internet," said Bill Burrington, AOL's VP for policy in Washington, D.C. "Given the history of the medium... open nondiscriminatory access has made the medium what it is today."
But ICANN's Roberts noted that he is still waiting to see yesterday's agreement between the Department of Commerce and NSI to judge whether all hurdles have been cleared.
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