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[ga-sys] VeriSign, ICANN Confident About Commerce Ruling

VeriSign, ICANN Confident About Commerce Ruling
By David McGuire, Newsbytes
11 May 2001, 5:22 PM CST


The US Commerce Department is expected to decide Monday whether to approve a
deal between VeriSign [NASDAQ:VRSN] and the Internet Corporation for
Assigned Names and Numbers (ICANN) that would give VeriSign near-permanent
control over the global ".com" registry.

"I'm highly confident I'm not going to get a 'no,'" from Commerce, ICANN
outside attorney Joe Sims told Newsbytes today.

While VeriSign spokesperson Brian O'Shaughnessy would not go that far, he
said that the company is "certainly expecting a favorable decision" when the
Commerce Department announces its ruling Monday.

In late April, ICANN's board of directors voted 12-3 to approve the contract
inked by VeriSign and the ICANN staff in March. Shortly thereafter, Commerce
Department attorney Alden Abbot sent a letter to VeriSign and ICANN
officials setting Monday, May 14 as the "target" date for the Department to
rule on the deal.

Under the contract, VeriSign will be allowed to retain its current back-end
control over the .com registry until 2007 - and beyond - in exchange for
surrendering its control over ".org," a less popular registry initially
intended for use by non-profit groups. The proposal also gives VeriSign a
chance to maintain its hold over the ".net" Internet domain.

The new deal is meant to replace a previous arrangement between VeriSign,
ICANN and the Commerce Department, under which VeriSign would have been
forced to divest its wholesale - or "registry" unit - by May.

In his letter, Abbott extended that deadline to May 31.

ICANN, the US not-for-profit firm charged with managing the Internet's
addressing system, operates autonomously from the US Government. But the
Commerce Department, which approved ICANN's charter, retains the power to
veto ICANN decisions regarding the addressing space.

The US government retains ownership and control over the "legacy" or "A"
root server that lies at the heart of the domain-name system.

Commerce can either approve the deal, reject it outright or request that
ICANN and VeriSign retool the arrangement, Sims said. While Sims said he
does not expect Commerce officials to place conditions on the deal, he
acknowledges that they would be within their power to do so.

Should Commerce ask for the deals to be changed, ICANN and VeriSign would
then have to decide whether to agree to the changes.

Before the ICANN board vote took place, a quartet of influential lawmakers
urged the Commerce Department to carefully scrutinize the ICANN-VeriSign

In a letter to Commerce Secretary Donald Evans, the heads of the House
Energy and Commerce Committee and the Commerce Committee's
Telecommunications and Internet Subcommittee urged the Commerce Department
to invoke its power to review the controversial arrangement between VeriSign
and ICANN.

"Without taking a position on the propriety of the revised agreement, we
want to ensure that any actions by ICANN support and encourage strong,
vibrant competition," the lawmakers wrote.

The letter was signed by Commerce Committee Chairman W.J. "Billy" Tauzin,
R-La., Ranking Democrat John Dingell of Michigan, Internet Subcommittee
Chairman Fred Upton, R-Mich., and the ranking Democrat of that body, Rep. Ed
Markey, D-Mass.

Once the sole seller of Internet addresses in .com, .net and .org, VeriSign
(formerly Network Solutions) saw its monopoly broken in 1999 by the Commerce
Department and the not-for- profit ICANN, which was charged by the US
government with managing the Internet's worldwide addressing system.

But while ICANN facilitated the introduction of a slew of retail .com
address sellers, VeriSign remained the paid, lone steward of the .com
registry, a continually updated master list of all the addresses registered
in .com.

VeriSign competitors have long argued that it is unfair for VeriSign to act
as a retail domain-name seller, while at the same time retaining an outright
monopoly over "wholesale" .com address sales.

The contracts currently under consideration by Commerce include new
strictures designed to prevent VeriSign from using its control over the
registry to unfairly bolster its registrar operation.

If Commerce approves the deal, ICANN and VeriSign would have the green light
to "sign it and be done with it," Sims said.

Reported by Newsbytes.com, http://www.newsbytes.com .

17:22 CST
 2001 The Washington Post Company

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