ICANN board approves VeriSign settlement

IDG News Service - The board of directors of the Internet Corporation for Assigned Names and Numbers (ICANN) yesterday approved a settlement to end a dispute with VeriSign Inc. over the latter's ability to introduce new services.

Under the settlement, ICANN allows VeriSign to renew its contract for management of the .com registry in 2012, with $6 from each domain registered going to ICANN. During the six years in between, VeriSign may raise domain registration fees by a maximum of 7% in four of those years.

VeriSign must also pay a one-time $625,000 fee to ICANN for "meeting the costs associated with establishing structures to implement the provisions of this agreement," according to a copy of the settlement on ICANN's Web site. VeriSign representatives could not be reached for comment.

The domain registrar sued ICANN in 2004 over what it saw as the governing body's resistance to rolling out new services, including domain registry wait-listing.

ICANN's board voted 9-5 in favor of the settlement agreements, with one director abstaining, the organization said in a statement. The U.S. Department of Commerce must approve the settlement for it to be finalized, ICANN said.

ICANN is an independent organization established to manage and coordinate the Domain Name System (DNS) to ensure that every address is unique and that all users of the Internet can find all valid addresses. VeriSign manages the registry of both .com and .net domains, although other companies may resell registry services for them.

The settlement has already provoked reaction from members of Congress, ICANN watchdog groups, and other domain registration companies over the control the deal gives VeriSign over the .com registry.

In a letter dated Feb. 17 to Secretary of Commerce Carlos Gutierrez, Rep. Rick Boucher (D-Va.), a member of the House Judiciary Subcommittee on the Internet and Intellectual Property, expressed reservations about the settlement. "I am concerned that the agreement would assure VeriSign the perpetual right to manage the .com TLD [top-level domain], regardless of the maximum price it charges for initial and renewal registrations," the letter said. Boucher cited Article IV of the agreement, which states that the contract will be renewed upon expiration except in the case of a serious breach by VeriSign.

Boucher sent a similar letter, also dated Feb. 17, to Assistant Attorney General for Antitrust Thomas O. Barnett, stating, "I urge your careful review of what appear to me to be the serious anti-competitive implications of the proposed settlement."

BulkRegister LLC, a VeriSign registration rival, announced its opposition to the settlement, stating that control of .com domains will potentially generate as much as $3.29 billion for VeriSign. "The revised agreement also gives VeriSign unprecedented control of the .com registry by allowing it to automatically renew its management of the registry in 2012 without first going through a competitive bidding process," the company said in a statement.

“Voting in favor of a bad deal doesn’t change the deal’s dynamics, it just confirms ICANN’s refusal to listen to legitimate criticism coming from every corner of the Internet community," said John Berard, spokesperson for the Coalition for ICANN Transparency (CFIT), a watchdog group, in a statement.

"Increasing prices without justification, allowing a monopoly to expand without review and giving VeriSign perpetual ownership of the .COM registry were wrong when they were first proposed and they’re still wrong," the statement said.

The CFIT called the settlement "one of the most important issues ever to confront the Internet community."