By Nick Patience
The future competitors to Network Solutions Inc in the domain name registrar market are yet to raise their heads above the parapet, but one that is sure to be a major player is NetNames. However, managing director Ivan Pope is still uncertain exactly what will be required of his company just four weeks before a test phase of new registrars is set to begin.
The Internet Corporation for Assigned Names and Numbers (ICANN) has set April 26 as the start of a two month so-called testbed phase for five registrars – chosen by ICANN – to begin testing NSI’s shared registration system. NSI won the contract from the US government to register names in .com, .net and .org name spaces back in 1993 and has controlled both the registration of names and the central database of names since then. At the end of the two month test period in late June the market is set to be opened up to any companies that meet ICANN’s minimum set of standards for registrars.
Pope says NetNames intends to apply to be one of those five testers, though whether it is successful or not is anybody’s guess as applications only opened last week and nobody is declaring their hand yet. We are still hearing that the major telcos around the world will gobble up the majority of the test places, but pure-play registrars such as NetNames are no doubt on ICANN’s radar as well. Companies that sign to be a registrar, whether in the testing phase or later on, have to sign two contracts: one with ICANN and one with NSI.
However, Pope believes that ICANN should not be in the business of regulating the registrar market by setting minimum financial criteria for companies to meet. It should merely regulate the contract between the registry (the controller of the database of names) and the registrar. At present NSI is both the registry and registrar, but will have to erect so-called Chinese walls between its two business to ensure that its registrar, WorldNic does not gain an unfair advantage from being so close to its registry. Pope wonders if that includes financial cross-subsidization, that is, will NSI be able to fund its registrar from the money it gets being the registry ? NSI tells us that there will be separation across all its functions: technical, operational, administrative and financial but are subject to negotiations with the US government.
Pope believes that London-based NetNames can make a successful business out of being a registrar alone. At present it is one of the 150 or so resellers of NSI’s .com, .net and org services as well as registering names in most of the world’s country-code names, such as .uk and .jp and holding the contract as the registry in a few of the smaller domains as well. Pope notes that the contracts for some of the larger country-code names are coming up, including Canada and Australia and the .us market is still very much in the nascent stage. NSI put a placeholder of $16 per name per year for companies to pay NSI for processing each name in .com, .net and .org once the market is opened up. But Pope reckons there will be a lot of companies looking to swallow that cost themselves and rely on getting revenues from other sources – mirroring the portal model. Similarly, on the registry side, Pope reckons there will be companies who will step in and offer ICANN a registry run at as little as $4 per year once NSI’s current registry contract expires in September 2000.
NetNames has registered tens of thousands of names in .com, .net and org – but below 50,000 – through NSI’s reseller network, but when the market opens up to competition, all those registrants will likely end up as NSI WorldNic customers. Pope understands that that is how the market works at present and NetNames itself has about 300 resellers of its own around the world.
Overall, Pope’s argument is that both ICANN and NSI are playing a non-internet game. Neither has been as open with the internet community as they could have been. ICANN’s board meetings are not open, it has given itself the right t
o audit registrar’s books to check how many names they have registered, which will be the basis of a per-name fee levied by ICANN. Prospective registrars will not be able to see the shared registration system until they sign a contract with NSI.
If such restrictions had been in place when NetNames was getting of the ground in 1995 it never would have made it. There are hundreds of potential NetNames out there, reckons Pope, but he doubts whether they will be able to survive in the brave new world of ICANN-regulated competition in the domain name registration market unless it is deregulated further. Meanwhile, look for expansion from NetNames in the coming months around the world as it gears up for the next stage of its life. In addition to London, NetNames has offices in London, New York, Sydney and Copenhagen.
