Ending more than 18 months of what ICANN president Paul Twomey called a pretty full-on lawsuit, VeriSign and the organization it called its regulator have also agreed on rules of engagement for new services such as the controversial Site Finder.

The settlement calls for ICANN to approve a new .com contract, one that extends VeriSign’s control of .com from 2007 to 2012, creates a 90-day service approval process, and creates new pricing controls.

VeriSign sued ICANN in February 2004, saying ICANN dragged its feet on approving new domain name services, and that it had unlawfully forced the company to turn off Site Finder, which could have made VeriSign more than $20m a year.

Site Finder leveraged VeriSign’s control of the .com registry to return advertisements and a search engine whenever a web user typed in a misspelled or non-existent domain name. ICANN said it posed an internet stability risk.

ICANN has the power to veto registry services under a 2001 .com contract with VeriSign, but the definition of registry services was vague. ICANN said Site Finder was one, VeriSign said it was not.

The old situation led to pretty much paralysis around innovation and services said Mark McLaughlin, senior vice president of VeriSign’s domain names business. This settlement effectively hits the reset button on ICANN-VeriSign relations, he said.

It also means VeriSign shareholders get the security of knowing their company is not likely to lose its most dependable cash cow any time soon. VeriSign will very probably start introducing more revenue-generating .com services too.

But McLaughlin said there are no plans to bring back Site Finder . The service was online for two weeks in late 2003, long enough to become wildly unpopular within the technical community.

If it were to attempt to relaunch Site Finder or any other registry service, ICANN would have to refer its technical concerns to a committee of experts, and any commercial concerns to national trade regulators. The process would have to wrap up in 90 days.

The new contract, which is now subject to a public comment period before final approval by ICANN, says VeriSign will not be able to raise the price of a .com registration above $6 a year until after January 1, 2007, Twomey said.

VeriSign would also have to continue to offer 10-year registrations, so buyers can lock-in their price. The company would also be banned from tying its registration services to any of its other products, Twomey said.

Twomey said the extension until 2012 was not a major concession. The VeriSign agreement had to expire by 2007, but we were supposed to start to renegotiate it at the end of this year, he said. This just moves it forward a few months, he said.

VeriSign also had a presumptive right of renewal on .com. It was not to be re-bid in 2007 the way .net was earlier this year. This presumption clause will be in the new contract too. VeriSign can only lose .com if it seriously breaches contract.

The new deal actually came after a three-way negotiation between ICANN, VeriSign and the US Department of Commerce, which retains additional powers over .com because, as easily the largest namespace, it has special considerations.

The new deal includes two provisions that could be perceived as weakening ICANN’s ties to the US, which could be a useful perception given that some international governments are trying to wrestle ICANN’s powers from US control.

Next month’s UN-backed World Summit on the Information Society will see some governments push for a UN-linked forum to replace the US Department of Commerce as ICANN’s overseer, or to replace ICANN entirely.

Under the settlement, ICANN and VeriSign have agreed not to sue each other in the US. Instead, contractual disputes will be handled exclusively by the International Chamber of Commerce, the Paris, France-based arbitrator.

We don’t want to be in the situation of having to fight very expensive legal disputes, Twomey said.

The proposed contract, which had not been published by press time, may also turn out to dilute the Department of Commerce’s involvement in .com. Commerce will have a role over changes to the pricing provisions in the deal.

The timing of the announcement, less than a month before WSIS, was a complete coincidence, Twomey said.