Commerce Department extends .com contract with VeriSign

VeriSign allowed a six-year extension on its agreement to operate the .com domain

The U.S. Department of Commerce (DOC) has approved an agreement for VeriSign to continue to operate the .com domain for six more years, despite objections about pricing and security.

The DOC has approved the .com agreement submitted by the Internet Corporation for Assigned Names and Numbers (ICANN), the nonprofit organization that oversees the Internet's technical infrastructure, VeriSign announced Thursday. The current .com contract expires in late 2007.

The approval comes even though domain-name registrar in September criticized the deal, saying it should include infrastructure build-out requirements and make the company justify built-in price increases. Also in September, registrar Network Solutions released a report saying ICANN has failed to address security in its latest proposals for the .com, .biz, .info and .org top-level domains.

But VeriSign officials noted that the .com domain has never crashed under its control during the last seven years.

The ICANN agreement "strengthens the security and stability of the Internet relied on by hundreds of millions of people around the globe," Mark McLaughlin, executive vice president and general manager for VeriSign Information Services, said in a statement. The agreement "holds operators accountable for their performance [and] promotes the continued investment of tens of millions of dollars in the infrastructure."

A Network Solutions official said the company was disappointed that the DOC approved the agreement "in the face of widespread opposition."

"Unfortunately, the Commerce Department has endorsed an agreement that creates a perpetual de facto monopoly, fails to provide sufficient checks and balances through competition and adequate oversight, and is fundamentally flawed from a national cyber-security perspective," Jon Nevett, the company's vice president for policy, said in a statement.

ICANN approved the agreement in February. But and Network Solutions criticized the deal for allowing VeriSign to raise prices by 7 percent in four of the contract's six years. The deal also doesn't include enough infrastructure build-out and security requirements, the two companies said.

Other critics called for the .com contract to be put up for competitive bids, but VeriSign and ICANN officials argued no other company was in a position to take over the massive .com domain.

NetChoice, a coalition of trade associations and e-Commerce businesses, praised the DOC's approval of the contract extension. The approval shows the DOC respects ICANN's decisions even as other countries have criticized the U.S. control of ICANN, said NetChoice, with members including VeriSign itself as well as eBay Inc. and Yahoo Inc.

Combined with a September agreement that moves ICANN to independence in three years, the .com approval "should also quell international criticism of the U.S for its oversight role over ICANN," Steve DelBianco, NetChoice's executive director, said in an e-mail.

The agreement will also "ensure the long-term availability and integrity of the Internet," he said.

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