March 16, 1998 1:35 PM PST

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Beginning April 1, Netizens will be paying 30 percent less to register domain names ending in ".com," ".org," and ".net" because those running the domain name system will stop collecting money for a controversial government fund.

Today the National Science Foundation (NSF), the government body that oversees the domain name system, and Network Solutions (NSI), the publicly held for-profit company that has the NSF contract to register the most popular domain names, jointly announced that they will no longer charge Net users for the "Internet Intellectual Infrastructure Fund."

The move comes just one day before a scheduled hearing in Washington on the fees charged for registering domain names. The hearing is part of an ongoing class action suit against NSI and NSF. Domain name registrants are accusing NSI and NSF of dramatically overcharging Netizens for domain name registration.

The Infrastructure fund, created in 1995 "to offset government funding for the preservation and enhancement of the intellectual infrastructure of the Internet," according to NSF, has played a prominent role in that suit.

In February, United States District Judge Thomas Hogan issued an order that temporarily froze the fund, which contains nearly $50 million.

Congress had wanted to spend $23 million of the fund, but it can't until the suit is resolved or the injunction is lifted.

The plaintiffs in the suit are alleging that the fund amounts to an illegal tax, and demanding that the government give back the money it collected.

William Bode, the attorney representing the litigants, said today's decision to stop collecting money for the fund is "an acknowledgment by the NSF and the NSI that the preservation fee is an unconstitutional tax, that the NSF never had the authority to authorize NSI to collect such a tax, and in that sense, it's a vindication of the lawsuit."

But NSF spokeswoman Beth Gaston said today that the elimination of fees for the fund have nothing to do with the lawsuit. Rather, the move is being made in anticipation of the possible adoption of a new domain name policy, currently being considered by the Commerce Department.

The comment period for that policy ends on March 23.

NSI's contract to run the domain naming system also officially expires at the end of this month, but government officials have said it will be renewed for another six months while the government hashes out the extremely thorny issue of who will run it along with an international body of businesses, individuals, and other governments.

While the issue of domain names is as complex as the Net itself, today's move, at least to end users, is rather simple.

For average people, it means that they will only have to pay $35 per year to register top-level domain names rather than the standard $50. First-time registrants are required to pay for two years at once, so the fee will be $70.

 

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