- The Washington Times - Monday, June 5, 2006

U.S. oversight of the Internet could end if the Department of Commerce approves an agreement to extend a California company’s control of the “.com” infrastructure, said the leader of a local domain-name registration company.

The proposed agreement between VeriSign Inc. and the Internet Corporation for Assigned Names and Numbers (ICANN) would hinder competition, raise prices for consumers and give foreign leaders the emotional cause they need to wrest away the U.S. government’s oversight role of Internet regulation, said Champ Mitchell, chairman and chief executive officer of Network Solutions, a Herndon domain-name registration and Web services company.

VeriSign spokesman Tom Galvin said Network Solutions and other registrars are concerned that their profit margins may shrink with their economic influence over ICANN, a nonprofit based in Marina del Rey, Calif., that oversees the Internet’s domain-name system under a memorandum of understanding with the Commerce Department.

The Mountain View, Calif., company’s deal with ICANN simply extends its “presumptive right of renewal” included in its previous contract, Mr. Galvin said. The 7 percent rate increases allowed in four of the six years through 2012 would be the first in the past seven years. In addition, VeriSign’s lump-sum, no-strings-attached payments to ICANN would reduce the nonprofit’s dependence on the registrars that contribute to it, he said.

Network Solutions and other registrars charge up to $35 for a one-year domain name license and pay VeriSign a flat fee of $6 to maintain the infrastructure needed to ensure dot-coms continue to operate, he added. The “.com” suffix accounts for about 75 percent of registered names in the U.S., half of all domain names worldwide.

“It’s been nine months since the framework of the deal has been out there and the only people fighting it are the registrars,” Mr. Galvin said.

A few U.S. lawmakers from both sides of the aisle also have expressed concern about the perceived anti-competitive nature of the contract. ICANN’s board, which strives for unanimity, passed the agreement by a 9-5 vote, with one director abstaining. The Justice Department is consulting the Commerce Department on the proposal, but a Justice spokeswoman declined to elaborate.

China, Brazil, Cuba and Iran, as well as the 25-nation European Union, have sought to end the U.S. government’s oversight role of ICANN.

“Anybody who thinks Tunisia was more than a standstill is wrong,” said Mr. Mitchell, referring to November’s World Summit on the Information Society in Tunis, where leaders agreed to establish an international forum to discuss Internet issues, but with no change in the U.S. government’s role in relation to the Internet. “There was no rallying point with emotional impact [then]; this gives it to them.”

James Lewis, a senior fellow at the Center for Strategic and International Studies, a Washington think tank, said the VeriSign-ICANN deal was a basic business decision, but does solidify international displeasure with ICANN.

“VeriSign’s right: This is basically a business deal the [registrars] don’t like because it has the potential for tightening their margins,” Mr. Lewis said. “But ICANN is looking at the very real possibility that its role will erode. This sort of thing only confirms foreigners’ perception that they want to get away from ICANN, but I don’t think it accelerates it.”

Mr. Mitchell, with representatives from ICANN and VeriSign, are scheduled to testify tomorrow during a House Small Business Committee hearing about ICANN.

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