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November 29, 2005

ICANN community slams VeriSign deal

Almost all sections of the ICANN community yesterday stood up against a proposed deal that would give VeriSign Inc the ability to raise the price of a .com domain name by up to 50% by 2012.

By CBR Staff Writer

As ICANN’s annual meeting kicked off in Vancouver yesterday, representatives of ICANN’s various constituencies groups added their voices to the chorus of people saying that VeriSign’s proposed new .com contract is unfair and anticompetitive.

ICANN and VeriSign are trying to settle a two-year-old lawsuit in which VeriSign accused ICANN of illegally regulating its business. ICANN had previously blocked services VeriSign wanted to launch on the grounds that they would harm the internet’s stability.

The settlement includes an agreement to extend VeriSign’s lucrative contract to run the .com domain, one which also allows it to raise prices and have less oversight when it plans new services that could harm competition or internet stability.

ICANN’s board are set to vote on the deal on Sunday as the Vancouver meeting wraps up, but if it takes into account the current outpouring of criticism, it seems inconceivable that the board would approve the contract without changes.

At a meeting yesterday, ICANN’s constituencies were invited to make comments on the proposals. Those that took the floor to comment were uniform in their criticisms.

Bhavin Turakhia, chief executive of Directi, a domain registrar, represented the powerful domain name registrars constituency. He said: ICANN is sort of acting more like a private business… they’ve demonstrated don’t specifically care about the community that much.

The settlement was negotiated privately, which some ICANN participants say went against the bottom-up policy development process that ICANN was founded upon.

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Turakhia also claimed that giving VeriSign the ability to unilaterally raise prices shows that ICANN is not upholding its fundamental tenet of upholding competition.

Competition directly means reduced prices, he added, pointing out that when VeriSign was forced to compete to retain the .net contract, that resulted in prices going down.

He also said that the deal harms the security and stability of the internet by removing clauses from the contract that would oblige VeriSign to invest hundreds of millions of dollars in the .com infrastructure, and by removing competitive incentives to do so.

Indeed, many of the speakers at yesterday’s meeting questioned whether VeriSign had ever fulfilled its previous .com contract commitment to invest $200m in its infrastructure. If the company has, it has never publicly accounted for the investments.

The registry constituency, of which VeriSign is the most powerful member, had no prepared statement yesterday. The non-commercial users constituency, expected to be against the deal, also did not.

The ISPs’ representative said: It is essential that any future ,com agreement provides fairness and equity for the whole internet community, and the current agreement with VeriSign does not meet this standard.

Also expressing some concerns were the intellectual property holders constituency, worried about VeriSign’s ability to mine .com traffic metadata for profit, and the at large constituency of individual net users.

But VeriSign itself was to some extent gagged yesterday, given two lawsuits filed in California by domain registrars on Tuesday, which claim the proposed deal breaches competition law.

It was ironic, given that VeriSign’s original lawsuit against ICANN was filed the day before its meeting in Rome early 2004, which appeared to have been filed at that time to stifle proper debate.

Our hope is that a settlement can be reached so we can end litigation against ICANN, so we can move forward on working together on other things, Chuck Gomes of VeriSign told the meeting.

ICANN itself questioned the timing of the two latest suits: The lawsuit appears to be an effort to divert the Internet community discussions during the ICANN Meeting, to the issues raised by a specific industry sector.

That sector is the expiring domain names registration market, which are behind the two lawsuits.

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