By Nick Patience
Network Solutions Inc could be on the verge of signing a five- year extension to its contract to run the domain name registry for .com, .net and .org, according to an analyst who follows the company. In a note sent to investors Friday, BancBoston Robertson Stephens’ NSI-watcher Steve Birer claims to have heard that NSI will get a renewal of its agreement that will take it through to around 2004, but with the caveat that the current price charged to registrars ($9 for each name registered) would be pushed back to around the $5 level.
The report also suggests that NSI’s requirement for two years’ payment up front in its registrar business will be dropped. NSI claimed to have no knowledge of how BancBoston could have come to such conclusions, saying it had not spoken to analysts about this matter. Birer did not return calls on Friday. NSI has had the exclusive contract to run the registry since 1992 and only faced its first competition in the registrar market in June.
It feels that its relationship with the Internet Corporation for Assigned Names and Numbers (ICANN) as the registry for .com, .net and .org should be put on a firmer footing. That’s slightly odd, given that NSI has so far declined to sign a registrar agreement with ICANN, as the ICANN-accredited registrars have done, but Birer reckons it will do soon. Nevertheless, NSI tells us it would feel a lot better about things if its registry role, which is formalized in an agreement with the Department of Commerce and which is currently due to terminate in September 2000, was set out in the form of a contract between itself and ICANN. This could all be posturing however, as ICANN has said numerous times that it would like to see the registry move to a non-profit model after NSI’s current agreement is up – the registry for .uk is run along those lines – but that presupposes that ICANN has the authority to make such decisions.
NSI says the possible extension of the agreement is one of the key elements of the company’s discussions with Commerce, which is seeking to map out the landscape when the competition testing phase is due to end. NSI obviously would like some guarantee that its registry agreement would be extended beyond next year, but ICANN and Commerce have said in the past that it would probably not be extended. Commerce officials familiar with negotiations with NSI confirmed Friday that it is one of the items on the agenda, but declined to give an indication of how close an agreement might be.
Meanwhile, NSI says it is disappointed at the changes ICANN made to its bylaws last week. It says the non-profit body made the decision without clear consensus and said that 25 or so comments posted on its web site and a few hecklers at the back of a room does not constitute a consensus among the internet community, which is the basis upon which ICANN says it makes its decisions. When asked how ICANN should gauge the consensus differently, NSI did not have a direct suggestion, but says if ICANN did really listen to the community, it would know that the feeling out there is to make no decisions at this stage. The main change ICANN made will have the effect of diminishing the influence NSI has over domain name policy in the future.
Birer finished his note with a fine piece of stock pumping: we encourage investors to get off the sidelines and back into the stock. NSI’s share price has fallen from $80.50 at the start of July to close at $55.25 Friday, having inched up 25 cents on the day.
