July 26, 1999 Web posted at: 10:15 a.m. EDT (1415 GMT) by Carolyn Duffy Marsan

From...

(IDG) -- Members of a congressional subcommittee Thursday accused Network Solutions Inc., which holds a monopoly position in the registration of most Internet names, of stonewalling the development of a competitive market for services that are crucial to the continued growth of electronic commerce.

The Commerce Subcommittee on Oversight and Investigations called 13 Internet experts from government, industry and academia to testify before a standing-room-only crowd about the privatization of the domain name system. Although subcommittee leaders said it was not their intent to "demonize" NSI, sentiments in the room were clearly against the Herndon, Va. company.

NSI has taken a "schoolyard bully approach," according to Rep. Ron Klink [D-Penn.], the ranking minority on the committee. Klink pointed out that NSI's stock has risen from less than $20 a share to $140 a share in the last year and its revenue now tops $120 million a year, as the domain name registration business has blossomed. "NSI does not want competition...they're dragging their feet."

MORE COMPUTING INTELLIGENCE
	IDG.net home page
Network World Fusion home page
Free Network World Fusion newsletters
Reviews & in-depth info at IDG.net
		IDG.net's bridges & routers page
		IDG.net's hubs & switches page
		IDG.net's network operating systems page
		IDG.net's network management software page
Year 2000 World
Questions about computers? Let IDG.net's editors help you
Subscribe to IDG.net's free daily newsletter for network experts
Search IDG.net in 12 languages
News Radio
	Fusion audio primers
	Computerworld Minute

The hearings are the latest problem for NSI, which is also being investigated by the Department of Justice for antitrust activities.

The hearings were originally focused on the Internet Corporation for Assigned Names and Numbers (ICANN), a nonprofit organization established eight months ago to manage privatization of the domain name registry business. But ICANN emerged relatively unscathed from the debate because it made several important concessions to lawmakers prior to the hearing. On Monday, ICANN said it would defer adding a $1 fee to all domain name registrations as a way of funding its operations. In addition, ICANN agreed to open its meetings to the public. And the organization said it would have nine directors elected by its first annual meeting in November.

Instead, the subcommittee's harshest criticism was leveled at NSI. NSI Chairman Jim Rutt came under intense questioning. At issue were NSI's delay in signing a contract with ICANN recognizing the organization's authority over the domain name registration business and NSI's assertion that it owns the central database of registered names.

Rutt denied that NSI was trying to delay the onset of competition. "Competition is a good thing for Network Solutions," he said. He also pointed out that it will bring additional advertising dollars into the domain name registration market, build the market overall and result in the introduction of new services that NSI can offer.

"We have spent tens of millions of dollars to introduce competition into the market," Rutt said. "There are already five other companies in business, and we are ready to bring another five on per month. A year from now, there will be 60 companies in the domain name registration business."

Rutt said that NSI was actively negotiating with the Commerce Department and ICANN over the last month and hoped to sign a contract recognizing ICANN's authority soon. "We have been negotiating in good faith and at a pretty good clip," he said. "We expect to sign a contract with ICANN soon."

Determining who owns the domain name database will be a difficult issue to resolve. NSI will maintain the database until October 1, 2000, when the company's existing arrangement with the Department of Commerce over domain names ends. At that point, NSI claims that it owns the database and can do whatever it wants with the information. The Commerce Department disagrees.

"The problem is that NSI exclusively operates the registry database without supervision," testified Andrew J. Pincus, general counsel for the Commerce Department. "NSI believes it can charge whatever it wants for the central database."

Pincus said he is hopeful that NSI and the Commerce Department can reach an agreement regarding the database without having to resort to other legal means such as seeking a database arrangement with another vendor. "We hope we won't have to go down the recompetition road...because that will not be good for the stability of the Internet," Pincus said.

In response to tough questioning by Rep. Bart Stupak [D-Mich.], Rutt admitted that NSI believes the database belongs to them. However, he added that the company "would agree to terms beyond September 30, 2000 [when the agreement between Commerce and NSI expires]....We don't believe Commerce has the right to put the registry [the database] out to bid after September 2000."

Klink accused the Commerce Department and NSI of engaging in a game of chicken with their negotiations. Witness Harris Miller, president of the Information Technology Association of America agreed, adding that "it will be terribly disruptive to the Internet if that game of chicken ended in court or with NSI walking away with the database."

NSI's position on the database also came under attack from Jamie Love, director of the Consumer Project on Technology. "We believe NSI is a monopoly that is charging too much money for its services and that it is trying to put a grab on the registry," he stated. "Somebody has to deal with NSI."

For the last seven years, NSI has been the sole registrar of Internet names ending in .com, .net and .org. Under a cooperative agreement with the Commerce Department, NSI assigns new domain names and maintains a central database of assigned names.

In 1997, the Clinton Administration targeted NSI's monopoly position. The Clinton Administration announced plans to create a competitive market for domain name registration services. In June of 1998, the Commerce Department issued a white paper that outlined its intent to hand off this responsibility to a nonprofit, consensus building organization. It chose ICANN as that organization in November of 1998.