ICANN and VeriSign agreed to violate anti-trust legislation?
The World Association of Domain Name Developers, an association of domain name registrants, is suing the Internet regulatory body ICANN and US domain name registry VeriSign. The suit alleges that a recently signed deal between the two organisations is anti-competitive and violates US anti-trust legislation.
The World Association of Domain Name Developers, an association of domain name registrants, is suing the Internet regulatory body ICANN and US domain name registry VeriSign. The suit alleges that a recently signed deal between the two organisations is anti-competitive and violates US anti-trust legislation.
Last month ICANN and Verisign settled their differences over a long running dispute and agreed to drop the pending lawsuits against each other. As part of the deal, ICANN agreed to extend VeriSign’s stewardship of the .com and .net domains until 2012. The current contract was due for renewal in 2007.
More controversially, the old agreement allowed VeriSign to make a $6 profit on each domain name registration. In present money, this means that, with around 35m .com domains out there, VeriSign makes $195m a year from the .com domain alone. The new agreement holds the maximum price for .com and .net domain name registration to $6 until the end of 2006. From then onwards it allows VeriSign to raise the price of .com and .net registration 7 per cent annually. At that level of compound growth, Verisign will be making $273.5m a year from .com domain names and does not take into account any expected growth.
In return, VeriSign accepts the authority of ICANN and promises not to seek to undermine the body in managing the DNS.
The WADND alleges that VeriSign has been bought off and given a licence to raise prices well beyond the rate of inflation. Therefore, the industry body is demanding that the 7 per cent annual price rise clause be struck from the agreement.
The dispute between ICANN and VeriSign goes back to 2003 when the Verisign came up with the idea to redirect incorrect or non-existent URLs to its own search engine known as Site Finder. As a result the incorrect URLs did not generate a ‘404 Site Not Found’ error. However many web applications - especially anti-spam software - relied on 404s to operate correctly and uproar ensued. Eventually ICANN pulled the plug on Site Finder and Verisign sued alleging that the DNS regulator had overstepped its authority.
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