March 1, 2006 8:30 AM PST

ICANN board approves settlement, price hikes

In a rare show of internal discord, the group that sets domain name regulation has approved a controversial proposal extending VeriSign's lucrative .com monopoly and allowing for price increases for those domains.

The Internet Corporation for Assigned Names and Numbers (ICANN) voted 9-5 on Tuesday in favor of a settlement agreement that grants VeriSign the right to raise fees on .com domains by 7 percent annually.

The settlement, which arose out of a lawsuit filed by VeriSign against ICANN after the Site Finder flap in 2003, will be lucrative for both organizations. Based on the 48.1 million .com domains currently active at $6 per year, VeriSign is guaranteed at least $288.6 million in annual revenue--with price hikes at a rate that far outpaces inflation.

The deal is not final yet. It has to be approved by the U.S. Commerce Department, and some members of Congress are already urging that it be rejected. Rep. Rick Boucher, a Virginia Democrat, said in a letter to the Bush administration last month that the proposal has "serious anti-competitive implications."

VeriSign said in a statement that the .com registry agreement is similar to one already approved last year relating to .net. "VeriSign is committed to continuing to build and invest in the Internet infrastructure so it meets the growing needs of Internet users and operators," the statement said.

It's also drawing fire from the registrars that sell .com domains, who allege that ICANN and VeriSign get to cash in--at the general public's expense. (The settlement includes VeriSign's agreement to hand over to ICANN an annual sum of $6 million to $12 million.)

The Coalition for ICANN Transparency (CFIT), a group set up after details of the settlement became public last fall, blasted Tuesday's vote. "Voting in favor of a bad deal doesn't change the deal's dynamics. It just confirms ICANN's refusal to listen to legitimate criticism coming from every corner of the Internet community," said John Berard, the coalition's spokesman.

CFIT has sued VeriSign and ICANN. In court documents filed last month, the group alleges that the .com deal represents an "unlawful agreement to establish a permanent monopoly" in violation of federal antitrust and California unfair competition laws.

ICANN has said that it needed to accept the agreement to settle the lawsuit with VeriSign. "VeriSign has advised ICANN that this proposal represents its last, best offer to settle the pending litigation," ICANN said in a statement in January.

A minor change from an earlier version of the settlement agreement permits the 7 percent price hikes for only four years of the agreement's six-year term. VeriSign would have a presumptive right to have its monopoly renewed after the agreement expires in 2012.

Those voting in favor of the deal included ICANN Chairman Vint Cerf, who is Google's chief Internet evangelist; ICANN Vice Chairman Alejandro Pisanty; and ICANN President Paul Twomey. Voting against it were Raimundo Beca, Susan Crawford, Joichi Ito, Njeri Rionge and Peter Thrush. There was one abstention, by Michael Palage, an attorney in the U.S.

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6 comments

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another huge rip off.com
How can price rises already be justified when technology should be making things cheaper? One company managing the .com domain should be more efficient and therefore cheaper. So much for the "free market" economics.
Posted by Pete Saman (99 comments )
Reply Link Flag
What free market!
What free market when there is no real competition to ICANN? Because it is controled by US government and it will not allow it to be opened as requested by UN and many other countries.
Posted by free_people (66 comments )
Link Flag
Proof positive that monopolies are bad
This so called deal between Verisign & ICANN should be final proof for people world wide
that monopolies are bad for the people, whether that monopoly is Verisign & ICANN,
or Google & Yahoo, or Visa & Mastercard, etc.
Because when you have no (REAL), choice, then the monopolies can do whatever
they want and you will "just have to take it in the ass...". Whatelse are you going to do?
Not sign up for .com domain names!
Not Advertise on Goole or Yahoo!
Not accept credit card payments!
etc.

So is there no hope!
Well there is a glimmer of hope.
In regard to completion to Verisign & ICANN monopoly I urge you to look into:
www.ORSN.org
In regard to completion to Google & Yahoo monopoly I urge you to look into:
www.anoox.com

Suggestions for alternative to Visa & Mastercard monopoly are welcomed.
Posted by free_people (66 comments )
Reply Link Flag
Proof positive that monopolies are bad
That has been proven with the decision to breakup of AT&T

Note that Mastercard and Visa are associations of banks. Would you believe not-for-profit?
Its true they are a brand label for the banks and only charge for operating network expenses and advertising which they do lots of.
Other Credit card companies ? Discover,American Express, I think Diner's club is still around
PayPal, and a few others out there. Debit card systems as well.
But you are right about search companies. Many out there are in a lot of control of what we have access to. I am finding out about an outer web that is passed by much of the time.
In any event I think you meant competition not completion am I wrong?
Oh and I do not know how your alternative root server network is going to have any effect on ICANN's Domain Name Services. Can you explain that a bit. I doubt many will understand that sites FAQ which appears to explain what they are trying to achieve.
I do Agree strongly that ICANN needs to be less pragmatic in their US legal battles and maybe Americans need to pressure the government to force the situation in a more democratic and fair manner than the current course of ICANN suggests.
I suspect there were many in ICANN that were not happy with the recent decision. I can not believe everyone thinks like Paul Twomey in ICANN
While his solution avoids legal cost. It seems to me the USA justice system needs an overhaul.
Microsoft a Monopoly? Yes. Justice system failed to handle that one properly and Netscape, and a host of other companies suffered for that unfair decision. Now the USA Justice System has another chance to do the right thing. I only hope they immediately clear up the mess by awarding ICANN full authority to handle things fairly and without Verisign's influence or favor.
They swept into a monopoly Network Solutions when the Internic took over and then like Microsoft did with its browser set up another psuedo monopoly Verisign who provide SSL security certificates. Though they have competition. Everyone knows Versign through its Network Solutions company and that instantly gave Verisign an edge there though Thawte now owned by Verisign competed very well by offering a lower cost alternative and quickly caught Verisign's eye as a better service in fact which they now own. Odd huh? Again I hope the USA Justice System improves otherwise this seems a lot like a biblical analogy of the king that followed King Solomon chose to tax the heck out of the south of Israel so much so they split. Is that where the USA Justice System is today. Are they going to condone the tax hike only to find the net split into two parts?
Posted by rss245 (4 comments )
Link Flag
No wonder the Google chief evangelist voted for this.
No wonder the Google chief evangelist, Cerf, voted for this and likes ICANN so much.
After all beside the ICANN & Verisign monopoly over .com & .net the next horrendous
monopoly are Google & Yahoo over searching.
Posted by Cyrus_K (60 comments )
Reply Link Flag
Appalling display of greed regarding ICANN and Verisign aka
Appalling display of greed regarding ICANN and Verisign also known as Network Solutions given the right to charge by AT&T which originally ran the Internic before they shifted distribution of all domains available at that time to Network Solutions.

I recall the day when the Internic controlled domains. Then you would send an Email to the Internic in a specified format. Not one cent did it cost back then. Suddenly when the Internet developed a bit we see a lot of greed. What a surprise! But besides the domain name horders and stealers waiting for a mistake to be made like missing a payment past 30 days we see a good reason why the world may not continue tolerate USA control of the Internet. ICANN so I thought had a responsibility to be fair to all its member registrars. The fact is ICANN could justify raising domain allocation rates but to do so in such an unfair way giving one registrar control of pricing is just wrong. It seems to me the building in of language fonts/unicode or whatever developmental changes they need to make for foreign character sets etc and the world at large seems to be best served by being fair to all the registrars. Renewing Verisign's license just seems to be a bad way to do it. I would like to suggest that Internet citizens over the world should let Paul Twomey, head of ICANN(The organization that essentially rules(administers the Internet ) know how the Internet Community feels about this issue by sending him an email or two with our thoughts on the matter: His email address appears to be:

twomey@icann.org

Please remember this decision was made by the responsible party of the internet with respect to .COM domain names made the number one type of domain nameby many browsers manufacturers who prioritize .com domain look-ups ahead of other domains .net, .org, .edu, .biz giving an advantage over other domains. I think that practice also should be stopped. Why should .com be any more important than .edu or .org

I hope this statement can make a difference!
Posted by rss245 (4 comments )
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