ICANN & Verisign's "AGREEMENT", .COM & the Rise of Another Monopoly

Well, for those out there that do not realize it, if you own a domain name, particularly that ends in .COM, there is an issue you should be made aware of that will definitely have an effect on you and your business.

First my thanks to Godaddy.com's, President, Bob Parsons, who brought it to my attention (via a post on his blog - http://www.bobparsons.com/).

Without getting far too "geekish" in terminology I will try to state the issue:

The Internet Corporation Assigned Names and Numbers (ICANN) at http://www.icann.org/ , the nifty Agency in charge of the Internet's domain names, IP addresses, etc. is currently in a legal battle with Verisign, who offers "intellligent infrastructure services", basically, they are an encryption and internet security service, who wants to be able to offer a registry of domain names to the public, sounds okay right? Well, wrong.

In February 2004, Versign sued ICANN, saying that ICANN was keeping them from being able to sell domain names, that it was breaking anti-trust laws and was rather ticked that ICANN wanted to regulate the allowed price of those services which Versign wanted to sell (.i.e. how much Verisign could charge for domain names). Copy of the original Suit can be found through ICANN at: http://www.icann.org/legal/verisign-v-icann/verisign-v-icann-complaint-26feb04.pdf or you can go to their main website at: http://www.ican.org/ and check out the posted information on the "Settlement Agreement".

In an effort to settle out of court, ICANN has worked with Verisign to develop an "Agreement", which would in essence give Verisign rule over the .COM domain name registry. (i.e. if you went to buy or renew a http://www.insertyoourdomainnamehere.com/ domain, you would have to do so through Verisign). The truely ironic part is, in the initial "Complaint/Lawsuit" Verisign alleged that ICANN was acting in an anti-trust way with it's limitation of allow who could sell what domain names and at how much, yet, in the "Agreement" developed. Verisign will receive authorization to sell .COM domain names and have total control over the sale and renewal of them, along with determining the pricing (which by the way, they want to be able to raise the price of .COM domain names at 7% a year -- initially they wanted to do so for the 1st 6 years, but the latest document on the ICANN website, seems to indicate a timeline of 1st 3 yrs to remain the same) however, the Agreement also allows for Verisign to administer the .COM Domain name registry for 10 years, and when that time comes up due, to automatically have the "Agreement" between ICANN and Verisign renew, which in essence gives Verisign rule over .COM domain names in perpetuity. Doesn't sound so good now does it?

So what? and How Does This Affect You and Your Business? Well, let's just take a quick overall peek at that:

1. First, there is discusson on the Internet waves, that costs could actually go up as high as $100 per domain name. Now stop and count how many domain names you or your company owns, how many domain names you think individuals will be willing to shell out the funds for annually.

2. While you're counting those domain names, remember that many businesses and individuals own multiple domain names, i.e. .Com, .Biz, .Info, etc., it has been proposed that if Verisign were to raise the .Com charge then all of the other registries would follow, so .Biz, .Info, .Org, may all be next to pump up pricing, it adds up.

3. This will throw a wrench in several marketing techniques out there, such as, multiple domains that link up for positioning purposes, multiple domains in order to list various products individually for brand recognition, multiple domain names for set-up and then Search Engine Optimization (SEO).

Now, consider one of the reasons why the Internet has become so prominant in our daily lives, accessibility. Anyone can for a modest cost get a domain name and start a website, particularly, the small business/entreprenuer, etc. How many do you think will begin to fall off the map?

This new "Agreement" makes the "little guy's" job much harder when trying to compete with the "big corporations" and when the small business tries to have a global presence, verus just the local neighborhood store.

Down the line, if there are fewer websites, that means less available information, less availability of goods and services. This issue trickles down all the way from the mom & pop grocery store that has an Internet webpage and store to the individual consultant who designs webpages or even the bigger guys that sell computer hardware.

According to Bob Parson's blog, statisics state that the cost for domains has fallen historically, so Verisign's take over of the .COM domain registry and their apparent desire to raise pricing (probably to pay off ICANN the fee that has been "agreed upon" for the priviledge of sole dominion over the .Com registry), actually goes against industry trends in domain name pricing.

Not to mention that little ironic part about, Verisign being the sole .COM domain registry administrator, which sounds pretty much to me like a monopoly and which is the essence for United States Anti-Trust laws.

There is also another issue written within the "Agreement" between ICANN and Verisign, there seems to be a desire within Verisign to data mine its domain users. I honestly do not know the actual specifics of that particular topic, but I think there are major privacy issues with a privately held company (ICANN use to be a Gov't Agency, then moved to a Non-profit and from my understanding is now a mix of private and non-profit), but, Verisign is definitley a private company, deciding to collect peoples data with no oversight and the ability to do whatever they so choose to, with it.

Finally, ICANN is scheduled to review the "Agreement" with Verisign for potential approval on Feb. 28, 2006, so I suggest that everyone that wishes to speak out now and raise general awareness about this issue do so and also contact your State Representatives!! I (thanks Bob!) copied the following from Bob Parson's blog post, so you can more easily contact your Representatives (see the info. between the astericks below). If you are interested, I also have posted at the very end of this blog post, the letter I submitted to ICANN and my State Senators.

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If you are a U.S. citizen and want to contact your Congressional Representatives or Senators here's how to find their email addresses:

For the Senate:www.senate.gov/general/contact_information/senators_cfm.cfm
For the House:http://www.house.gov/writerep/

Here is a suggested form letter you might send to your elected representatives:

Dear _________:I am very concerned about the recently revised .COM registry agreement and proposed settlement between ICANN and VeriSign. This pending agreement is anticompetitive and bad for consumers and the Internet community as a whole. The proposed agreement provides VeriSign with the ability to increase prices by 7% annually in four of the next six years without cost justification. Furthermore, under the new agreement, VeriSign's monopoly would run in perpetuity as the agreement would automatically renew without the opportunity for competitive bidding. This is an outrage. VeriSign and ICANN should not be allowed to establish a perpetual monopoly without Congressional oversight and the opportunity for input from the Internet community.The proposed agreement harms the Internet community by allowing unjustified price increases when fees for .COM domain names should be decreasing, not increasing. Even VeriSign last year agreed to drop fees by more than 40% for .NET domain names to win an extension of that registry agreement. There is no reason VeriSign shouldn't be implementing the same type of price decreases for .COM names, as well.As your constituent, I would sincerely appreciate if you would look into this agreement and ensure that VeriSign and ICANN are not allowed to go forward with it in its current form. If the ICANN Board approves this anticompetitive agreement, the next step is for the NTIA to approve. I urge you to also bring our concerns to the attention of the NTIA.

Sincerely,_______________
******* END of BOB PARSON'S POST **********

--------- BONNIE'S LETTER -----------

Dear ICANN Board:

I am dismayed by the fact that ICANN would consider allowing one entity, such as Verisign, a monopoly on .COM Registry control. Particularly where the Entity (Verisign) is allowed to raise pricing up to 7% per year for a consecutive 6 years, all without oversight! I am offended at the thought of any monopoly, which, is both anti-American and illegal due Federal Anti-trust laws.

What to me is worse that an Anti-Trust Monopoly within any industry, is the thought that the Internet, which has in the past, enjoyed such wide spread acceptance as a communication medium and has successfully, made our society a "Global Village", could potentially:

Shut down the small entrepreneur, because of rising costs of .COM domains, if one entity has exclusive rights (inperpetuity).2. Cause such huge impact on the Marketing Industry and Small Business's ability to enter markets and compete with larger corporations with bigger advertising/marketing budgets, if costs are allowed to increase at up to 7% per year over 6 years for .COM domain names.

I certainly hope that ICANN's Board will take into consideration what has become the "spirit" of the Internet, which includes:
1. Information Sharing and World Wide Communication
2. The ability for small enterprises to "get the word out" about their business products and services, opening a "world" market, for the "little guy" and not just "big business", when considering the potential long-term effects of the ICANN & Versign Agreement on the Internet, on Small Business Commerce, on the Marketing & Advertising Industry and on the various other related Computer, Web, Security, Consulting, etc. services which will, in the long-term, be directly impacted by your choice of Agreement Terms.

Also, I do not believe this issue, has had the trickle down effect as to be known by many of the 40.3 million current along with the uncounted potential .COM domain name owners/buyers and feel that if those owners/buyers knew of this issue and how it would impact them and their businesses, they too would be as concerned as I. I will certainly be contacting my Legislative Representatives, in order, to bring this issue to their attention, so they can represent the mass majority of the public, who are unaware there is even a potential issue with .COM domain name registration and point out this issue, along with the following, which is quoted from ICANN's, "Summary and Analysis of Community Feedback (11 December 2005), Summary of Comments Regarding proposed .COM Agreement", as listed on the ICANN website:
http://www.icann.org/topics/vrsn-settlement/comments-summary-11dec05.pdf
Full transcript of Public Forum Meeting held can be found at:
http://www.icann.org/meetings/vancouver/captioning-public-forum-i-02dec05.htm

Comments from ICANN's Constituents, Supporting Organization Councils and Committees:

1. Centralization of what amounts to over 50% of all names in one registry for perpetuity embeds a significant competitive dominance in the market; longterm supplier dominance typically runs counter to user interests.
2. Registrants did not benefit from the price reduction in .NET registry prices from $6.00 to $4.25; ICANN may not be able to ensure that registrants benefit – or are not adversely affected – by .COM fee and price changes.
3. The proposal makes VeriSign the permanent, concentrated source of the majority of ICANN's revenue. o ICANN makes itself significantly dependent on an entity not accountable to the public.
4. The proposal bypasses the existing budget process and implements a “private arrangement” for funding. The proposed new ICANN fee that would be assessed on VeriSign and passed on to the registrars would result in excess of approximately $150 million dollars to ICANN over the term of the Agreement, and would be an end-run around the existing registrar fee approval process (which allows for registrars accounting for payment of one-third of ICANN fees to veto any registrar-level contributions).
5. The proposed new .COM agreement allows VeriSign to make commercial use of traffic data regarding domain names for almost any purpose, and without any obligation to follow the procedure for new registry services with respect to such uses.
6. Traffic data belongs to users, not to providers; traffic data could be abused; theproposal’s provision on the use of traffic data should be amended. o Data mining allowed under the proposal would be illegal in countries with data privacy laws.


Respectfully,
Bonnie L. Buchanan