Domain monopoly's days are numbered

Ever since 1993, when the federal government decided it wanted to get out of the business of registering the names of new Internet sites, there has been just one place to go to register your domain name.

But starting at the end of April, Network Solutions Inc., which registers all Internet names as part of an agreement with the government, will face competition for the first time. Instead of going to the Web site of Network Solutions at www.networksolutions.com to register a new Internet address ending with .com, .org or .net, Web surfers will have five alternatives to choose from.

Just who the five will be is to remain a mystery until the US government's hand-picked overseer, the non-profit Internet Corporation for Assigned Names and Numbers, or ICANN, announces its selections on April 21.

The five, to be followed in a few months by many more, will be the guinea pigs for new software that is supposed to allow Network Solutions to remain the sole holder of the vast database of Internet addresses while allowing multiple companies to act as registrars, adding new addresses from customers around the globe.

ICANN has not said how many applications it received for the first five slots, or who any of the applicants might be. The names of major telephone companies and Internet service providers like Sprint Corp. and America Online Inc. have been rumoured as possible selections, along with a host of much smaller start-ups.

No matter who the first five are, competition will almost surely lower the price of registering a domain name. Network Solutions charges $70 (£43) for an initial two-year period with annual updates priced at $35. One of the most critical issues yet to be decided between the US government, ICANN and Network Solutions is the price competing registrars will pay to cover Network Solutions' costs of maintaining the database.

Under the system worked out by ICANN, Network Solutions will continue to manage the vast database, which holds more than 4 million addresses already. That should keep the Net's critical address system routing everything from e-mail to Web page requests running without a hiccup. Competing registrars will be allowed to make their own entries into the database, paying Network Solutions a small fee each time.

If the fee is set at $25 or $30 per year, new companies will have little room to offer registrations below the current rate and still eke out a profit. But if the so-called wholesale price is set at $2 to $5, expect to see super-cheap .com addresses proliferate quickly.

Analysts and onlookers predict something closer to the low end.

William Whyman, Internet analyst at the Legg Mason Precursor Group, said the fee is likely to be less than $15 and more than $2. "They want a competitive market, but they don't want to push Network Solutions out of business," he said.

Aside from the denizens of cyberspace seeking to register new Web sites, the competitive system could also have a major impact on investors holding stock in high-flying Network Solutions. On Monday, the company's stock rose $6.75 to $114.75 on Nasdaq in afternoon trading, more than five times higher than a year ago but well off an all-time high of $153.75 reached a few weeks ago.

Short sellers, who sell borrowed stock they hope to replace in the future with lower priced shares, have targeted the company as due for a fall. But several Wall Street firms are predicting the company's shares will continue to rocket ahead.

In a separate move Friday, the company made a small concession to government officials and proponents of competition. The company had drawn fire last month when it eliminated a Web site called Internic.net that provided information about already registered Web site addresses. The company redirected all traffic from that address to its own. The site was managed by Network Solutions, but government officials said they were to be consulted before any changes could be made.

The revised Internic site did not have the registration search and information functions restored but offered links to Network Solutions, ICANN and a government site.