NSI makes timely change to domain payment policy

Some Internet users will have to start paying registration fees up front for the most popular forms of addresses, the dominant Net registrar said today--one day before its policy of granting credit to its customers is likely to come under attack on Capitol Hill.

Network Solutions has been under pressure to curb its policy of allowing applicants to hold a domain name for months before actually paying for it. Critics say the practice, in place for more than five years, encouraged speculators to gobble up names for the sole purpose of reselling them for a profit.

NSI's invoicing practice also has come under fire from new registrants authorized by the Internet Corporation for Assigned Names and Numbers (ICANN) to sell names with the three extensions, which account for up to three-quarters of the world's Internet addresses. Because ICANN--the body the Clinton administration appointed last year to take over administration of the Net--requires the registrars to receive payment before registering an address, NSI's rivals say the company's ability to offer customers credit puts them at a competitive disadvantage.

NSI, which until recently was the only company authorized to register ".com," ".net," and ".org" addresses, said it was implementing the change to curb so-called cybersquatting and to make it easier for customers to pay for names.

At least one witness scheduled to testify at a hearing tomorrow before the House Commerce Subcommittee on Oversight and Investigations said he planned to bring the alleged disparity to the attention of subcommittee members.

Ken Stubbs, chairman of CORE (Internet Council of Registrars), said his criticism of the NSI credit policy was included in written statements he submitted earlier today.

According to NSI spokesman Brian O'Shaughnessy, the company had planned to announce the change more than a month ago. "I don't know that there was any connection between the two events other than coincidence," he said.

The move will allow customers to use an easy "point and click" method to pay NSI fees using a credit card, eliminating the step of receiving a paper invoice in the mail. NSI also hopes the practice will discourage people from reserving names they think will be popular and then reselling them.

Under the new policy, NSI still will allow businesses that register domain names in bulk and meet other conditions to be billed later. By contrast, registrars hoping to get a piece of NSI's multimillion-dollar business are bound by an agreement imposed by ICANN preventing an address from being activated "unless and until [the registrar] is satisfied that it has received payment of its registration fee."

NSI doesn't appear to be the only player in the recent debate over domain name registration trying to preempt criticism at tomorrow's hearing. Following sharp criticism, ICANN said earlier this week that it would start conducting its board meetings in public and would suspend a $1 fee imposed on domain names. Grover Norquist, president of Americans for Tax Reform, is expected to take ICANN to task over the fee at tomorrow's hearing.

Witnesses with wide-ranging views on the future of domain registration are expected to testify at the hearing, which comes just a few weeks after Rep. Tom Bliley (R-Virginia) publicly criticized ICANN. The first panel will include representatives from NSI, ICANN, and the Commerce Department, which is responsible for enforcing a cooperative agreement that set up the current domain registration system.

A second panel is expected to include James Love, director of the Consumer Project on Technology; Mikki Barry, president of the Domain Name Rights Coalition; and representatives from America Online and two other registrars appointed to test a shared registration system.

The panel also will include two academics following the domain name issue and the head of the trade group the Information Technology Association of America.