Network Solutions Inc, the company that oversees domain name registration on the Internet, could pull the plug on as many as 200,000 domain names in the next few weeks if delinquent domain owners do not cough up their registration or maintenance fees. Officially, NSI says it has identified and begun sending out 15- day notices to 100,000 customers identified as being in arrears. Sources close to the company say the actual number of mailings is considerably more. The problem is that the company is presently unable to account for registration fees on literally hundreds of thousands of domains it has registered. In September 1995, NSI implemented the $50 fee for already-registered domains and a $100, two-year registration fee for new domains. Last spring, NSI began pulling the plug on domains that had not paid their fees. However, after a number of high-profile clerical errors, whereby paying customers like Microsoft Network and the Burton Group had their domains pulled, NSI decided to hold off on further disconnections until it could get its book keeping in order. One problem it has encountered is that it is often unclear who needs to be billed. Some domains are registered by service providers, some by site administrators. To avoid problems, and more potential embarrassment, it has sent electronic mail notices to every person, technical and administrative connected with delinquent domains. NSI Internet business manager David Graves says the company made a conscious decision to allow domains to be registered without payment rather than to begin disconnecting.
Delinquent domains
He says, we’ve decided that it’s worth it to our customers for us to carry names for a while in an unpaid status until we’re sure we’re doing the right thing. Once the 15-day period has expired, he adds, the delinquent domain will be put on hold in NSI’s registry – meaning that it cannot be looked up on the Internet. If the balance still hasn’t been paid 60 days later, the domain will be freed up. NSI says the initial 100,000 domains officially in question represent 8% of all domains currently registered. The actual number of delinquent domains is certainly much higher. At $50 per domain, the minimum NSI could be charging, the company stands to take in another $5m from this mailing – 30% or $1.5m of which would be earmarked for an Internet infrastructure fund set up by NSI under its deal with the National Science Foundation – the organization that granted NSI its domain registration monopoly. As of November 1996, NSI claims to have about $10m in this fund – not counting any interest – and no plans on how to spend it. Graves says he intends to make specific recommendations on the fund to NSF this week. If Network Solutions is right about the amount of money in the infrastructure fund, it appears that even more than 200,000 domains must also be in arrears. As of November 1996, Network Solutions says it has registered 688,499 new domains at the $100, two-year registration rate. So, 30% of those fees would equal $20.7m. However, NSI says it has collected only $10m. So where is the rest? NSI says there is a lag between when domains are registered and when it receives the money, but when you do the mathematics, the lag becomes gigantic. According to NSI’s November numbers, it had collected fees from only 400,000 domains. NSI had registered that many in May of 1996. In November it had 825,547 on the books – a discrepancy of 425,000 domains. The National Science Foundation says it has looked at NSI’s books and it is confident that everything is on the up and up. It says NSI erred on the side of allowing unpaid domains to remain rather than disconnecting paying ones. If NSI’s rumored plans for an Initial Public Offering are true, the books will have to balance. With 425,000 domains to be paid for, that means NSI could be doing a lot more mailings.
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