Controversial domain name deal approved

The board of directors of the Internet Corporation for Assigned Names and Numbers (ICANN) voted last week to ratify a controversial deal between itself, the US Department of Commerce and Network Solutions Inc. (NSI), following secret talks between the three sides at the board's annual meeting here.

The board voted 16-0 to approve the deal. One member abstained and two were absent.

Last year the US government assigned ICANN to take over the technical administration of the Internet, including the central registry of names in the .com, .net and .org Internet domains. The deal requires NSI to recognise ICANN's authority, and to sell off the registry within four years.

The deal has drawn heavy fire during the meeting this week, especially from companies that compete with NSI to register names in the three domains. The rival registrars complained that the deal was unfairly tilted toward NSI.

A caucus of the dissenting registrars submitted a seven-point proposal to the ICANN board during a heated public forum last week. Last night, negotiators for ICANN, NSI and the Commerce Department met behind closed doors to haggle over the points. Negotiations continued through the night and into the morning, even as the ICANN board convened for its final session. ICANN's general counsel, Louis Touton, appeared at the session in order to brief the board on the actions taken on the seven proposals, as well as a host of minor, noncontroversial wording changes.

All seven points were addressed to varying extents. But, except for Touton's short summary of the points, no information was publicly released prior to the board's vote. The details will eventually be posted on ICANN's Web site.

"The world isn't perfect," said Esther Dyson, the board's chairwoman. "It's very important that we do what we need to do and get on with it."

Touton said that the deal now includes "service-level" language requiring NSI to maintain certain technical standards for the registry. NSI will also publish the technical language needed to access the registry so that all registrars can use the same method to access it, rather than having to develop programs of their own. NSI must also post links to other registrars on the InterNIC Web site, so that people seeking to register a domain name will be aware that they have a choice of registrars to use.

While other registrars must obtain assurances of payment from each customer before they may activate a new domain name, NSI will get to keep its four-month exemption from registration-fee payment rules. Companies that take advantage of that waiver to register with NSI will have to pay the government-mandated fee of $US35 per year. Meanwhile, other registrars, once they obtain assurance of payment, may charge less than $35.

News of the eleventh-hour negotiations seems to have mollified, at least temporarily, a registrar who had been threatening legal action as of yesterday. "We'll go back and reassess," says Matthew Cockman, general counsel of Advanced Internet Technologies, whose subsidiary, NameIt, competes with NSI to register domain names. Cockman, who left the meeting before the board's discussion of the agreement, says the revised deal would "take this out of the realm of immediate harm" to competition.

"We're happy the board addressed the concerns," agrees Richard Forman, president of, an NSI competitor. "But we'll have to look at the details."

NSI Chairman Michael Daniels calls the vote a "seminal moment" in the privatisation of the Internet. "We're very pleased with the outcome," he says. "We will try our best to work in a positive, cooperative manner."

The deal will result in "more choices and lower prices, and that's what we were aiming for," says Becky Burr, the Commerce Department's lead negotiator.

With the contentious deal out of the way, the board moved quickly to approve a new annual budget and bylaws governing the formation of ICANN's at-large membership. The organisation will now be able to turn its full attention to developing the at-large membership and holding the next round of elections for the board of directors. ICANN is also actively considering initiatives such as establishing new "top-level" domain names alongside the existing .com., .net and .org.

The board will next meet in March, in Africa.

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