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April 5, 2005

Spurned .net bidder cries foul

The dispute over which company should run the critical .net internet domain could be about to get messy.

By CBR Staff Writer

Sentan Registry Services, which was narrowly pipped at the post by VeriSign in the running for the prestigious contract to run .net, said yesterday the evaluation of the two bids was flawed, and that it should have won. VeriSign called sour grapes.

The company said yesterday that it has identified several fundamental problems in the evaluation report that materially and unfairly advantage the incumbent [VeriSign, which has been running .net for many years] to the detriment of Sentan.

If its complaints are upheld, it could create a messy situation for VeriSign, which is already negotiating a new .net contract on a tight deadline, but ICANN’s chairman indicated yesterday that it’s not impossible that this could happen.

VeriSign’s contract to run .net expires at the end of June. Five companies, including VeriSign, applied to domain name system oversight body ICANN, the Internet Corp for Assigned Names and Numbers, for the next six-year contract.

ICANN, eager to appear objective in the face of its ongoing and acrimonious lawsuit with VeriSign, outsourced the task of evaluating the five bids to Telcordia Technologies, an essentially independent third party. And VeriSign won.

But second-placed Sentan, following on the heels of fourth-placed Denic eG, now says the Telcordia analysis of Sentan and VeriSign bids was flawed to the point where, if the mistakes were corrected, Sentan would win.

A correction of one or more of these errors would result in a statistically significant scoring change and a different selection. A thorough and immediate review must be made to ensure the equal treatment of all parties, Sentan CEO Richard Tindal told ICANN.

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ICANN chairman Vint Cerf said here at the organization’s meeting in Argentina that Telcordia has already agreed the assessment [of Denic] had an error, and corrected the report accordingly. But this did not change the ranking of the five bids, he said.

Telcordia will be asked to look at Sentan’s objections too. While not addressing the complaints directly or giving any weight to their accuracy, Cerf suggested that the true winner will not be known until the ICANN board makes a choice.

The concerns will be addressed for resolution to Telcordia, Cerf said at a press conference yesterday. The ICANN board will have the ultimate decision…The board could decide to negotiate with the second-placed candidate.

Sentan has two major beefs with the Telcordia report that should be easily provable one way or another. First the company claims that Telcordia did not hold VeriSign and Sentan to the same standards regarding their data centers’ geographic distribution.

The Telcordia evaluation, which scored VeriSign and Sentan either green (good) or blue (very good) against all the criteria, gives Sentan a green and VeriSign a blue for the geographic diversity of their respective data centers.

The report even says that it scored Sentan lower because it approach to geographic diversity is slightly risky due to [the] proximity of primary and backup sites.

Sentan’s sites, in Virginia and North Carolina, are over 300 miles apart, but are in the same electricity region. VeriSign’s application makes it clear that its primary and backup sites are just 10 miles apart in Ashburn and Dulles, Virginia.

It seems clear that Sentan was penalized for data centers that are 400 miles apart and VeriSign was rewarded for data centers just 10 miles apart, Tindal told ICANN. Sentan also has a cold backup site in Japan.

It seems fairly straightforward. But VeriSign’s senior vice president of naming and directory services, Mark McLaughlin, tells us that the company has a third site, in California. This site does not appear to be listed in the company’s .net application.

Sentan also says that VeriSign gets a blue score, where Sentan gets a green, on one matter where the Telcordia report says that only Sentan properly answered the question.

All applicants were asked to detail what value-added services they planned to provide, and outline the benefits and burdens of each one. The evaluators found that All [applicants] described the benefits of proposed services but only Sentan gave detail on burdens.

Sentan CEO Tindal said: It seems unreasonable for the incumbent to have received a score higher than Sentan despite being not in compliance with a specific requirement of the RFP [the .net request for proposals].

Sentan also dares to bring up the VeriSign-ICANN lawsuit to show that VeriSign should have been downgraded for not abiding by ICANN policy in the past when it introduced the controversial Site Finder service in late 2003.

ICANN states in its legal filings against VeriSign that launching Site Finder, a URL redirection system that was widely criticized by internet experts, made the internet less secure and stable, and that VeriSign refuses to recognize its contractual commitments under the .net agreement.

Tindal points out that past technical performance was considered by the Telcordia evaluators, and that past behavior should have been too. Evidence of past performance is the best indicator and measure of future behavior, he told ICANN.

I don’t think the lawsuit says anything about us not being policy compliant, said McLaughlin. True, Sentan only quotes ICANN saying VeriSign broke contract, not policy, and the Telcordia team did not evaluate contractual compliance.

There was an evaluation process, and there has to be a ranking, said McLaughlin. It’s not surprising that those who did not get the top ranking are now disputing it.

Sentan, a joint venture of pre-IPO infrastructure provider NeuStar Inc and .jp operator Japan Registry Services Ltd (JPRS), makes four complaints in total. In each case, it says either it should have been scored higher, or VeriSign lower.

Due to the scoring mechanism, it may only need two changes to be made to the evaluators’ report in order to emerge as the top-ranked candidate. Currently, Sentan has 12 blue scores against VeriSign’s 14.

But it’s a very big if. If Sentan and Denic can find flaw with the report, VeriSign could be able to also.

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