Changes proposed in domain name registration contract

Under a proposal between the group responsible for managing the Internet's domain naming system and VeriSign Inc., which administers the process under contract, amendments could be coming that will change some of VeriSign's responsibilities.

The proposal, announced Thursday by the Internet Corporation for Assigned Names and Numbers (ICANN), would have VeriSign continue to keep and administer the Internet domain name registries for .com and .net sites but relinquish the registry for the .org suffix.

In its statement, ICANN said it wants to return the .org registry to its original planned use, that of being a Web site registry exclusively for nonprofit groups. VeriSign has a separate unit that acts as a domain-name registrar for companies, groups and individuals who want to register domain names.

Under the proposal, a nonprofit group would take over the management and implementation of the .org registry to better prevent it from being used by groups other than nonprofits, according to Marina Del Ray, Calif.-based ICANN.

Bob Korzeniewski, an executive vice president of corporate development at VeriSign, said the proposal calls for his company to divest itself of the .org registry by the end of 2002, at which point it would be taken over by a nonprofit entity using a US$5 million endowment to be established by VeriSign. The new administrator would be given free use of VeriSign's infrastructure for one year under the deal.

The company would also agree to invest about $200 million in infrastructure over 10 years for the overall registry system under the proposal.

The proposal, which will now be fodder for public comment, would also restructure the existing ICANN/VeriSign agreement to split up the reworked .com and .net agreements into separate documents.

In exchange, VeriSign would be given first dibs on renewing its administration agreement over the popular .com registry through a "presumption favoring renewal" as long as it meets its contract obligations.

In addition to a public comment period, the proposal will be discussed at an ICANN Public Forum in Australia March 12. The proposal is subject to approvals from ICANN, VeriSign and the US Department of Commerce.

VeriSign's existing agreement with ICANN and the Commerce Department was established in October 1999. That agreement required the company to divest ownership of either of its registry or registrar businesses in order to extend its operating agreements for administering the registries for four years beyond the 2003 expiration of the current contract. Under the new proposal, VeriSign would operate the .com registry until 2007 and the .net registry until 2006.

In a conference call Thursday with financial analysts, VeriSign CEO and President Stratton Sclavos said the proposed amendments would "take away the uncertainty about what will happen" when the current agreements expire.

In an online public comment forum set up by ICANN, the general tone of remarks Thursday was against the proposed agreements, citing an alleged unfairness in giving VeriSign preference in keeping the .com registry when its agreement expires.

Don Heath, president and CEO of the Internet Society, a Reston, Va.-based nonprofit group, said Thursday that the proposal to give the company special rights to renew the .com registry administration in the future makes sense.

"I do not think that's unreasonable," said Heath, who is a frequent critic of VeriSign and its original agreement with ICANN. "VeriSign has done a good job with this. They pioneered it; they put it in place. To me, that's not an irrational proposal."

Heath said that "unless they really screw something up or do something illegal, they should have the ground floor on this thing."

He said he is also supportive of the proposal to break away the administration of the .org registry to a noncommercial entity, as envisioned in the original agreement. "It's an absolutely great idea," he said.

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