ICANN faces two lawsuits over Wait Listing Service

Out-Law News | 01 Mar 2004 | 12:00 am | 3 min. read

ICANN, the body responsible for the internet's domain naming system, has found itself in a catch-22 position after being sued last week by VeriSign for interfering with the launch of a new service, and a coalition of domain name registrars who hope to prevent the launch.

Both suits relate, at least in part, to a Wait Listing Service (WLS) proposed last year by VeriSign, the company that controls the database of all .com and .net domain name registrations. The service relates to the renewal of domain names.

At present, many domain name registrars offer a service where consumers pay a fee to 'reserve' a domain name that is already registered. If and when that registration is not renewed, the registrar will attempt to get it on the consumer's behalf.

No guarantee is given, and the end result is that consumers often pay several registrars to back-order the same name. This secondary domain name market is very competitive, and prices are relatively low.

But VeriSign's WLS would require that all registrars apply for expiring domain names through VeriSign, and has been criticised by domain name registrars and resellers, who argue that the new scheme would increase costs and kill their secondary domain name business model.

In July last year a group of registrars and resellers, calling themselves the Domain Justice Coalition, sought a temporary restraining order against ICANN, challenging its failure to comply with its own internal decision-making process requirements when considering implementation of the WLS in the face of opposition from domain name registrars, resellers and consumers.

The Court refused, and the case is due to go to trial later this year, regardless of the fact that the WLS has still not been finally approved.

The internal processes within ICANN, or the Internet Corporation for Assigned Names and Numbers, have been criticised by many organisations and governments around the world. It is widely accepted that the internet body has deep-rooted problems, although it is attempting to re-organise itself and a new CEO and board members have been appointed.

But the pace of change is slow and on Thursday VeriSign took matters into its own hands by filing a suit against ICANN alleging that the body has overstepped its contractual authority and improperly attempted to regulate VeriSign's business in violation of its charter and its agreements with VeriSign.

The case is seen by many as an attempt by VeriSign to assert its own authority as the leading internet organisation.

VeriSign alleges that ICANN has improperly attempted to become the de facto regulator of the domain name system and in doing so stifled the introduction of new services that benefit internet users and promote the growth of the internet.

VeriSign states that it has attempted to work with ICANN within an agreed upon framework to introduce new services, including recent discussions regarding the Wait Listing Service. But over the last several years, ICANN has failed to follow a clear, consistent and uniform process.

Tom Galvin, vice president of VeriSign Government Relations, said:

"The framework embodied in our contractual agreements with ICANN strikes a careful balance between the need to give ICANN the authority it needs to perform its technical functions and the need to preserve a registry's flexibility to innovate and introduce new services. ICANN has upset that balance by making assertions of control over services and by administering its authority inconsistently and unfairly."

VeriSign's Association for Competitive Technology (ACT) President Jonathan Zuck commented:

"ICANN has become a black hole. Proposals for innovation go in and nothing comes out. Services that could benefit millions of Internet users such as internationalised domain names, wait listing and the consolidation of domain name renewals have been bogged down for over two years within the ICANN bureaucracy. While the need for thorough review of new technologies is critical, the process cannot be a black hole from which no innovation and no decisions ever emerge."

VeriSign is also smarting from a dispute with ICANN over its surprise launch of a controversial Site Finder service in September 2003.

The new service redirected surfers to VeriSign's Site Finder search engine when they entered a web address that was not registered on the internet or was inactive. The unilateral change was made, according to VeriSign, to improve "the user web-browsing experience."

The alteration provoked a barrage of criticism. Network administrators accused VeriSign of seeking not to aid the misguided web user, but rather to generate more advertising revenue from its search engine partners. Others criticised the effect that the changes have had on the working practices of the internet.

ICANN stepped in and, in the face of a threatened court action, VeriSign agreed to suspend the service.

But the battle between ICANN and VeriSign has been muddied further with the announcement on Saturday that a group of eight registrars had filed a suit against both bodies over the WLS.

According to Derek Newman, lawyer for the group, the latest lawsuit seeks to stop the implementation of the WLS that will "unnecessarily and in violation of a host of consumer protection laws, replace a method already working well."

According to the group, if the WLS were implemented it would eliminate competition by putting VeriSign in command of redistributing expired domain names and change the existing process from a fee for results – where a customer pays only if the domain is secured – to annual fees that are no more "than a bet against the house."

"There is no need to create a monopoly when a logical market has already emerged," Newman said.