From...

July 2, 1999
Web posted at: 11:04 a.m. EDT (1504 GMT)

by Nancy Dillon

(IDG) -- Network Solutions Inc. (NSI) Wednesday confirmed that the European Union is furthering its antitrust investigation into NSI's monopoly over Internet domain name registration.

"Just in the past week, they asked us for some interrogatory information on whether or not NSI contracts with other registrars violate EU antitrust laws," said Brian O'Shaughnessy, a spokesman at NSI. "We feel they do not."

Until recently, NSI enjoyed a U.S. government-sanctioned monopoly over the registration of top-level Internet domains .com, .net, .org and .edu. Since last November, a not-for-profit agency charged by the U.S. Department of Commerce has been working to introduce new competitors into the market.

The organization, called the Internet Corporation for Assigned Names and Numbers, is helping five "test-bed" organizations around the world to connect with NSI's domain name databases for the purpose of competitive domain name registration. The five companies are Melbourne IT, America Online Inc., the Internet Council of Registrars, France Telecom and Register.com, a division of New York-based Forman Interactive Corp.

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Critics of the contract NSI struck with the five companies have complained that the terms unfairly favor NSI. They say one example of imbalance is a $100,000 performance bond each company must post for NSI and which NSI can collect if it finds the partner in breach of contract.

The latest development in the EU investigation comes just two months after the U.S. government launched a similar antitrust probe. In April, the U.S. Department of Justice began investigating NSI's claim that it has exclusive rights to the customer data associated with the millions of domain names it has registered since 1992.

But not everyone involved in the market privatization scheme share the antitrust concerns raised by the EU and the Justice Department.

"The cool thing is to be an NSI basher at the moment," said Clive Flory, general manager at Melbourne IT in Melbourne, Australia. "But these guys really bent over backwards for us on the technical front. Any issues that we've had getting up and running, they've fixed."

Melbourne IT's registration site, called Internet Names WorldWide, went live this week. It is only the second site after Register.com to make it to market so far.

"When we first looked at the [NSI] contract, we balked," Flory said. "But we eventually signed it because we wanted to get into this business. ...And you can't blame NSI for trying to protect its own stake."