A Year Ago: New DNS could bring profits for ISPs

Originally published Wed, 30 Sep 1998 15:37:23 GMT

On the eve of the deadline for ending the U.S. government's involvement in running the Internet's domain name system, few of the major issues involved in the changeover have been resolved -- and insiders say the government will probably keep a hand in the Internet game for a while longer.

But while it may be a few more months before the Internet addressing system is running itself, it isn't likely that users or Internet service providers will experience much disruption. In fact, once it arrives, the new addressing infrastructure could allow those in the business of selling Internet access to make a lot of money. "This whole process will be transparent to end users," said Network Solutions spokesperson Cheryl Regan. "It's in no one's interest to disrupt the flow of commerce that's already there."

At the Internet Service Provider Convention (ISPCon) here Tuesday, the organisations negotiating the privatisation of the domain name system (DNS) promised a brave new world of value-add offerings and money-making services to ISPs. For users and businesses, the new system could mean more domain names to choose from, and improved procedures for settling intellectual property disputes involving online names.

"Internet service providers are going to be able to facilitate registering domain names, and they'll be able to make money at every stage of the way," said Ken Stubbs, chairman of the Internet Council of Registrars (CORE), which submitted a proposal for the new naming infrastructure. Earlier this year, the White House launched an initiative to end the government's authority over the DNS, which has existed from the early days of the Internet. Eventually, the matter of creating a new, nonprofit organization to oversee Internet addressing operations was turned over to the technical community of the Internet.

That process was to be complete by Sept. 30, the expiration date for the government contracts of Network Solutions -- which holds a monopoly over the registrations of the top-level domains .com, .net and .org -- and the Internet Assigned Numbers Authority (IANA), which assigns the underlying numerical Internet addresses.

A new organisation is in the works, but negotiations between Network Solutions and IANA haven't been completed, and some key issues -- such as the composition of the organisation's board of directors -- aren't yet resolved. However, once the process is complete, it could mean some substantial benefits for ISPs. For one thing, ISPs will probably gain the option to become domain-name registrars for the popular .com, .net and .org domains -- allowing them to offer registration services to their customers as a value-add. Right now, companies can resell Network Solutions' services, but under the new system, they should be able to get direct access to the domain name registry, and offer wholesale, rather than retail, prices.

Network Solutions said its main competitive advantage will be its long experience as a registrar. "We welcome competition," said spokesperson Cheryl Regan. "We've registered 2.3 million domain names, and the market is going to grow, not shrink ... we see the potential for 100 million domain names. Not everyone is even using the Internet yet."

In addition, the new framework could also introduce additional top-level domains, to be used for special purposes. CORE has proposed such names as .arts, .firm, .shop, .rec, .nom and .info.

CORE Chairman Ken Stubbs sees a huge untapped demand for personal domains in particular, where someone could use their own domain -- such as www.joesmith.nom -- as a marketing tool, or just for fun. But any new domains will have to wait for the conclusion of the debate over trademark dispute resolution, which is of great concern to brand-name companies. Currently, domain names are sold on a first-come, first-serve basis, which has led to a practice called "domain squatting" -- someone buys up a name that is sure to be in demand, such as atandt.com, and then sells it to the trademark holder at a huge profit.

One service provider at the convention told of having to shell out $20,000 (£12,000) in legal fees for an ultimately fruitless attempt to recover its own domain name.

The new DNS could include measures to make dispute resolution more efficient and less costly. CORE, for example, proposed binding domain name holders to a mediation system used by the World Intellectual Property Organisation, a branch of the United Nations.