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Verisign ICANN monopoly under attack
October 22nd, 2007 by 
Jay Westerdal
A new hope has just surfaced against the Verisign-ICANN monopoly. ICANN granted Verisign a contract that has no ability to end and has price increases that are baked into the contract forever. The new hope is an underdog watch group known as the “Coalition for ICANN Transparency, Inc.” (CFIT) that has filed a motion to declare the Verisign-ICANN contract a monopoly according to the Sherman Act. This is the third time they have brought the suit against ICANN and Verisign. The head lawyer on the case is Bret Fausett a sharp ICANN observer. There is not much hope that CFIT will win against such a titan, the other side has been able to get the case dismissed two times before, however I think the case is very strong and very accurate. The reason CFIT will face an up hill battle is because ICANN and Verisign have a lot of money to fight the lawsuit. Verisign has an extra $20 Million a year thanks to the contract and ICANN and VeriSign baked in a new ICANN fee that would be assessed on VeriSign and passed on to the registrars and ultimately passed on to consumers. This fee would result in excess of approximately $150 million dollars to ICANN over the contracted period of time and would be an end run around the existing ICANN budget approval process. The Court has already recognized that to eliminate competitive bidding violates the Sherman Act. The CEO of Tucows went on public record that they could provide DotCom registry services for $2 a name, which prompted the CEO of GoDaddy, the world’s largest registrar, to say that GoDaddy could do it for a dollar a name. Meanwhile the Chinese Registry CNNIC has figured out how to do provide global registry services for 13 cents a name per year. There is certainly a competitive market to run the DotCom registry.
So while the challenge is for CFIT to prove Verisign has a Monopoly in the eyes of the court, this will be a David vs Goliath type of fight that has a lot of valid points. What ICANN did was to grant a contract which goes against its own Bylaws and the Memorandum of Understanding between ICANN and the United States Department of Commerce, one of ICANN’s core missions is to promote competition. The DotCom contract now contains a “presumptive renewal” provision, which by its nature hinders competition. The proposed DotCom contract, however, goes much farther than the existing contract by strengthening the presumptive renewal and termination provisions on behalf of VeriSign, thereby making it virtually impossible for VeriSign to lose the DotCom registry and impossible to reap the benefits of competition. With price increases baked into the contract it also makes it nearly impossible for ICANN to take out the language of price increases. Next time the contract is renewed ICANN is obligated to extend the same terms and conditions and those price increase will continue to go up faster and faster. If that doesn’t make your blood broil then you don’t own a domain name.
The way the current contract reads Verisign has a monopoly and there is no way to break it. No other Registry can bid when the contract goes up for renewal. Prices will always go up and ICANN is mandated to continue renewing the contract. Verisign has a lock on ICANN and now owns the DotCom registry forever. The only hope we have is that the ICANN-Verisign contract is found to be a monopoly and a truly competitive bid is allowed on the Registry contract in the future.
Ask your Registrar to support the CFIT case financially. Only do business with a registrar that supports overturning the Verisign Monopoly.
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October 22nd, 2007 at 1:50 am
Thanks for the article. The greedy will get their due karma. For what it’s worth, Verisign wont ever get my 2 cents. BTW, How can the Chinese always do it for so much less? Are there child labor sweat shops for data entry?
October 22nd, 2007 at 2:48 am
Umm the Chinese can do it for a lot less because its GOVERNMENT assisted dont ever doubt it so are alot of industries here, to be able to control .com has to have advantages most everyday people would never even think of but just think bad b movies and George Orwell…..”Here is my Amazing Kreskin immitation LOL”I think it will be partially successfull more than likely you will see a possible reworking of the contract some guarantees and at most a buck or two reduction but expect increases maybe even a refund of the increase retroactivly probobly each domain and a few month extension or a buy get 1 year free deal but way down the road after they earn alot of interest on the increase.
October 22nd, 2007 at 5:24 am
Outsource it to India. They can do it at much much better price.
October 22nd, 2007 at 6:59 am
Doesnt this sound a lot like when AT&T was originally dismembered. The 1000 pound gorilla could set any rate for local and long distance that it wanted because in its monopoly areas, there was no competition. Use a phone (or extra phones) not made by Ma Bell… “We detected extra phones on your line and are going to bill you extra.” Ma Bell used to employ a person whose job was to scan lines for extra phones “to protect the network”. All this was government protected as a sanctioned monopoly… just like ICANN and Verisign. Since ICANN is failing in its mandated functions to fairly bid the process, it should be opened up for better scrutiny and oversight to protect the consumers.
It is high time that ICANN and Verisign got taken down. Makes you wonder which officials in the government are on the take and looking away, hoping we dont notice???
October 22nd, 2007 at 8:06 am
I’d like to remain professional, but I really hate Verisign. The actual costs + resonable profit connected with managing the system are much lower than they would like us to think. I’m not found of Godaddy, but I’d love to see them take it over from Verisign. I’ll support anyone that can take some of the grasping fingers our of our pockets…!
October 22nd, 2007 at 9:41 am
Never say never, Jay.
As I have said time and again, once the Feds get involved, you’ll see a few heads spin and, perhaps, even some jail time for these so-called titans.
It’s too bad that this industry has been uncapable of policing its own ranks.
Dirty, dirty, dirty.
Best,
Ms Domainer
October 22nd, 2007 at 11:13 am
eh…. verisign might have unlimited money but if we spend thousands of dollars on press releases about the monopoly tactics word will get out - sooner or later a government official will learn about it and go after them.
October 22nd, 2007 at 11:23 am
If Verisign has no golden share and limited board influence at NSI and other major registrars it would seem there is also quite a bit of money (the registrars) to support a competitive registry.
October 22nd, 2007 at 12:52 pm
If ICANN enforced the rules and maintained an orderly registration service I would be more sympathetic but they can’t even do that correctly. Through the scalawags out but be careful what you wish for. If we invite national or international governmental organization into the tent, we may be looking back at the Verisign-ICANN stewardship as the good-old-days. Many of the governments on this planet are no friend of the Internet! True, they may not increase the prices but governments have a little scam what they call taxes.
Mike
October 22nd, 2007 at 4:20 pm
Hi, all,
I’m no friend of government intervention; once the government gets involved, that’s about all she wrote. You’ll see
–Steep taxes for domains registered in the U.S. and at U.S.-based registrars, including a yearly registrar tax payable to the U.S. government.
–Draconian rules and regulations for registrars, including a stop to the current aftermarket auction system (which is about corrupt as one can get). You’ll have U.S. tax/legal code books at least a foot thick, enough to keep corporate lawyers busy for centuries.
–Once politicians figure out that money can be made on domain names, they’ll want their turn at the pork barrel feeding trough–MORE taxes.
To Versign: Enjoy the ride while you can because your day of reckoning is coming.
Ms Domainer
October 22nd, 2007 at 4:54 pm
For me I will stay with http://benyahoo.net great prices all over also benyahoo.com
and that they only things I will say
October 22nd, 2007 at 5:15 pm
ms domainer,
verisign already pays corporate taxes - they make more and they’ll report more.
October 22nd, 2007 at 10:48 pm
If you think its bad now just wait till as many of us have said before when people are REQUIRED to have at least 1 OFFICIAL Domain like a Social Security Number think of the Money involved then,how many people live on this rock? can anyone say CA-CHING…$$$$$
October 23rd, 2007 at 7:29 am
Lower domain prices are not a good idea. The Icann fee should be 20$ per name. Too many squatters/parkers out there.
October 23rd, 2007 at 10:56 am
$20 is outrageous
theres squatters in every field - get with it
October 23rd, 2007 at 12:58 pm
I would love to see real competition here, but one of the big risks is that the feds will get involved, the US government will take over the registry service (”to ensure fair pricing for everyone”) and make it cheap and everyone will be happy…
… until they start putting all you who live in Antigua out of business by seizing your .coms for “unpaid US taxes” and raising the prices as a nice new revenue source for the government.
EG: The authority being used here- the memorandum with the department of commerce is the very same authority that is probably a bigger risk to a free internet than verisign, if they decide to take it over for themselves.
October 23rd, 2007 at 1:24 pm
If the feds get involved in the US-based TLDs, they might place restrictions on how one can use a domain, like giving registrants 60-90 days to develop a domain; furthermore, they would probably get involved in TM issues and go after these resellers who knowingly auction TM domains AND the buyers who bid on them. They won’t give two sh*ts what ICANN thinks either.
If this possibility isn’t enough to scare this industry into cleaning up its act, then be afraid–very afraid.
Ms Domainer
October 25th, 2007 at 10:00 am
MsDomainer Said “As I have said time and again, once the Feds get involved, you’ll see a few heads spin and, perhaps, even some jail time for these so-called titans.”
Unfortunately, you’re not very familiar with the situation. The ICANN-VRSN contract was approved by the Feds - the Department of Commerce to be precise. Also, SAIC, Network Solutions previous owner before Verisign, had 7 seven existing felony convictions for government contracting fraud and was given the keys to the A root server. Jail time ain’t going happen.
June 5th, 2009 at 2:58 am
Sorry for the ignorant question, but is there any way one can break verisign’s monopoly by developing one’s own root servers? One could begin by creating a competing .com registry service, but located in India or China or Vietnam, say. It would seem odd that China’s government seems to be able to support a non-profit model for registering domain names, whereas the champion of free markets and equality (USA) can’t or won’t.
What would it then take to ensure that ordinary internet surfers can access a .com website that is registered in this “alternative” registry?
I would be happy to install a kind of proxy-lookup software that would first look up a domain in this alternative registry before going on to looking at the verisign-controlled root servers (I suppose these are the ones propogated to the various ISPs).
I don’t really understand the underlying process, but I am not the only “ordinary” user who would welcome the opportunity to break away from the strangehold that verisign (+ ICANN?) has on domains.
Up till now, paying $10 a year has been more or less reasonable (although $2-$4 seems more appropriate and yet still profitable), but I’ve recently been stung with exorbitant penalty fees (known as “Redemption Fees”) because of a technical fault that meant that I didn’t receive the renewal reminders in time. I was with tucows, but now they’ve introduced a 3% “processing fee” for top-up payments. These little charges keep creeping up and up and there’s nowhere else I can go if I want to take my business elsewhere.
Perhaps a less disruptive suggestion would be for an organization such as the Library of Congress to be responsible for domain names, funded by the US Government. The only thing I worry about here is that the US Government might then be able to block websites that it deems “inappropriate” (not unlike the Chinese government is doing also). And since America is not really a free speech country (at least when it comes to drugs or sex) then it is these sites (or names with rude names) that would be controlled.
Perhaps the UK and Europe might tow the line with US-based TLD names, but I think Asian (or ASEAN) countries might be willing to create a body that mirrors a .com “space” of some kind and allow ordinary people in Asia to register and visit competing names. It may become the dominant force, and once the roughly 2/3rds of the world’s population prefers to go through the Asian .com service then the US .com owners will want to register their domains in Asia instead of with Verisign. And then perhaps there might be some decent competition. The only significant issue would be how to resolve two websites both with the same .com names: one registered in Asia, the other registered with Verisign USA?
How feasible is all this? And any ideas of how one could start the ball rolling?