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November 28, 2005

VeriSign and ICANN sued over settlement

A new lobby group calling itself CFIT, for the Coalition for ICANN Transparency, has sued VeriSign Inc and the Internet Corp for Assigned Names and Numbers for alleged anticompetitive conduct in VeriSign's proposed .com registry contract.

By CBR Staff Writer

The Washington DC-based organization, currently believed to be membered purely by, a Canadian domain name services firm, claims the deal would allow VeriSign to extend its monopoly as .com registry into adjacent markets.

The proposed .com deal will come under intense scrutiny and debate at this week’s ICANN annual meeting in Vancouver. The deal, which would allow VeriSign to raise the price of a .com by 7% a year, has already been hit by unprecedented public criticism.

Momentous, via CFIT, is concerned with the provisions of the deal that would dilute ICANN’s powers to block VeriSign’s new registry services, potentially enabling VeriSign to muscle in on Momentous’s market.

The proposed deal came as part of a settlement between ICANN and VeriSign of a lawsuit in which VeriSign accused ICANN of breaching antitrust law by blocking such services. ICANN, it seems, has a rock/hard-place dilemma.

It is VeriSign’s proposed secondary market domain auctioning service, the Central Listing Service, formerly known as Waiting List Service, that Momentous fears it will have to compete with.

Indeed, Momentous subsidiary sued ICANN and VeriSign over the same matter two years ago, when the WLS idea was first publicly disclosed.

CLS would allow VeriSign to skim off 10% of the sale price of re-registered domain names, names that were previously registered but are about to see their registration expire, or drop, for whatever reason.

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Such properties often already have traffic associated with them, and are valued by domain name speculators.

Currently, dropping name registration services are the domain of a handful of retail-level service providers such as VeriSign’s CLS could essentially make these services redundant by pre-empting them at the wholesale level.

Hence the lawsuit. In the complaint, filed in the District Court in San Jose, California yesterday, CFIT alleges breaches of the Sherman Act, which governs monopolistic practices, as well as unfair competition and cybersquatting.

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