Net domain controversy settled

After compromise talks to assuage other registrars, NSI gets a deal and ICANN gets the money it needs to stay alive

After days of spirited debate and public comment, the Internet Corporation for Assigned Names and Numbers (ICANN) approved a series of agreements with Network Solutions and the US Department of Commerce that will finally pull the beleaguered organisation out of its financial troubles and establish its authority over NSI, which had held a monopoly over the registration of top domain names like .com, .net, and .org.

"Failure to sign these agreements would mean that ICANN's financial difficulties would continue and the divestment of the registry from the registrar would be put off again," said Eric Menge, an administrator with the US Small Business Administration. "There was no doubt in my mind they were going to pass it today."

Terms of the agreement grant Network Solutions (NSI) control over the database of already assigned domains (the registry) for the next four years with an option to renew its control for another four. In return, NSI will pre-pay $1.25m (£780,000) in ICANN fees. By maintaining control over the registry, NSI will collect a $6 fee whenever a competitor registers a domain name. The registry provides the backbone for services like WHOIS, which allows people to look up information about the owner of a domain. Information contained in the registry will be open to all registrars.

The agreements sparked a strong reaction from registrars competing with NSI, who feel the terms create an unfair competitive advantage for NSI. On Wednesday, 17 of the 18 registrars present at ICANN's annual meeting established seven issues they felt needed to be addressed in order to create a level playing field.

Among the issues: Standards should be established to measure the performance of the registry, NSI should be required to collect pre-payment of registration fees and customers should be made aware that there are now registration alternatives. The ICANN board of directors directly addressed all seven issues during its public board meeting Thursday morning and formulated compromises on several of the issues.

The most difficult to resolve, according to ICANN board member Louis Touton, was the issue of pre-payment. Currently, all registrars are required to collect pre-payments for addresses, with the exception of NSI. The new agreement requires NSI to switch to a pre-payment system within four months. Until then, it must collect pre-payment on registrations that are competitively priced. Registrations that pay the standard $70 don't have to be pre-paid. The pre-payment requirement is designed to cut down on cybersquatting and trademark infringement. "I think NSI and the Department of Commerce were surprised how the registrars came together in one, unanimous voice," said Richard Forman, CEO of, an NSI competitor. "We are pleased the board took our concerns into account."

Esther Dyson, ICANN's interim chairwoman, agreed with Forman's observation and commended the registrars for their organisation. "Yesterday's comments were presented in a manageable way," Dyson said. "They offered solutions rather than complaints."

Despite their approval of the NSI agreements, not all the ICANN board members were totally comfortable with the arrangement. "I don't like these agreements ... but I accept the need to trust in the institutions involved with the agreements we now have," said newly elected board member Amadeu Abril i Abril.

"We are not a regulatory body, but must negotiate to agreement with commercial parties, explained board member Eugene Triana. "This means that each party only gets second best of what it seeks."

All the board members voted in favour of the agreements except Pindar Wong, who abstained.

The general feeling among people observing the board's vote was one of relief. If not approved, ICANN's ability to make decisions regarding the future of domain name assignment could have been in doubt. "It's very important that we do what we need to do and then get on with it," Dyson said.

Becky Burr, a Department of Commerce official highly involved in the negotiations also expressed relief that "we can now move on to the rest of the work here".