VeriSign likely to control .com registry for next 10 years

VeriSign has been criticised for being allowed to act as both registry and registrar. These dual roles mean that VeriSign not only makes a $6 commission on every .com, .net and .org registered or renewed by anyone with another domain name registrar, it also competes with all these other registrars, or re-sellers, by itself selling domain names direct to purchasers.

In terms of the new proposals, the one existing agreement between VeriSign and ICANN would be divided into separate registry agreements for each of .com, .net and .org, and each would be subject to an individual term.

The .org agreement would expire on 31st December, 2002, and VeriSign would not be eligible to seek to renew it. The .org registry would then be turned over to an as yet unspecified not-for-profit organisation to which VeriSign is required to provide the sum of $5 million.

The .net agreement would expire on 1st January, 2006, and it would then be subject to a competitive renewal process in which VeriSign and all other interested parties could participate.

The .com agreement would expire on 10th November, 2007, and VeriSign would have a right at that time to renewal for a new four-year term if it satisfies the criteria set forth in the agreement, meaning it will likely control the internet’s most popular and lucrative registry for the next ten years. There are around 21 million .com names registered, compared to only 4 million .net names and 3 million .org names.

VeriSign has also been required to commit to the investment of at least $200 million in research & development and infrastructure spending. One of the goals of this investment is to focus on the development of a universal WHOIS capability that would work across all the Top Level Domains in the Domain Name System.

Further, VeriSign has to agree to eliminate the $10,000 one-time fee charged to new registrars for initial access to the VeriSign registries.

The original agreement with ICANN had granted VeriSign an automatic right to operate all three registries until 2007, provided VeriSign sold its registrar business by 10th May, 2001. The new agreement does not require the sale of the registrar business but continues and strengthens the requirements that VeriSign not favour its affiliated registrar operations in any way over unaffiliated registrars. These include a requirement that the registrar business be operated in a separate subsidiary.

Last month, VeriSign decided to postpone its decision to give VeriSign continued control of the .com registry until yesterday following widespread industry criticism. Three US Congressmen have since written to the US Commerce Department Secretary to voice concerns that the deal should be examined to ensure that it does not threaten competition.