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VeriSign calls ICANN bluff in world’s biggest game of poker

Registrar slams strong hand on table, leans back

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We’d been wondering what VeriSign was up to. Leaning back, but carefully observing. Making the odd snide comment, but all the while shifting its cards in its hand and plotting its next move in the world’s biggest game of poker.

The prize? Control of the Internet.

ICANN on the other side of the table has been in confident mood. It called VeriSign in an earlier round, had better cards, and won. ICANN was relaxed and chatty, telling everyone how it was in charge of the game.

It’s sitting up straight now though. VeriSign has called ICANN’s bluff and laid down on the table four Kings - four of a kind. The kitty has built up. Whoever wins this hand looks set to take the whole game.

I fought the law
VeriSign yesterday delivered a 42-page lawsuit to a Los Angeles court - ICANN’s home town - in which it not only made its annoyances plain but also pointedly questioned ICANN’s very authority.

It accuses the Internet overseeing organisation of violating anti-trust laws, breaching contracts and interfering with contractual relations, and it wants money - declaratory and injunctive relief. And damages.

It has clearly been working on the lawsuit for a while and its logic is seductively sweet. ICANN has been preventing VeriSign from introducing new services. It has been imposing improper constraints. It has tried to set itself up as a regulator without sufficient authority. It is damaging the Internet.

You won’t find many disagreeing with that.

And then to the nuts and bolts of the legal argument: ICANN is breaching the agreement it has with VeriSign. It is failing to extend that contract to others, so putting VeriSign at a disadvantage. It is due for costs. VeriSign has not breached any of its contracts. ICANN has.

This is the tight legal strike that only a company which has won much of its power through overpowering litigation can achieve.

Mine, all mine
What has to be remembered is that VeriSign honestly believes that it is the Internet. It was around before ICANN, it’s been a fundamental part of the Net’s foundations since it persuaded the US government to give it complete control of the entire commercial side of the Internet when it first born.

VeriSign treats everyone with a gentle, arrogant pat on the head. But it is also a bully and won’t flinch from piling its full weight on someone that makes a rude remark about it or questions what it is doing. The difference with ICANN is that people have started listening to it instead of wise old uncle VeriSign. And ICANN in turn has started behaving as if it owns the place.

The first time VeriSign tried to stamp its authority, in July 2002, it was very pleased to note ICANN went out of its way not to get into an argument. It was over the Wait List Service (WLS) that would give VeriSign complete control over any .com or .net domains that weren’t renewed. VeriSign suggested that being given a monopoly over the most profitable part of the entire domain name system would be a nice gesture.

ICANN bent over backwards to accommodate it. An authoritative committee asked to look into the matter rejected the proposal out of hand. ICANN asked another. It also slammed the idea. But the ICANN Board passed the idea anyway, prompting lawsuits and several angry Congressmen attempting to introduce a Bill demanding greater transparency in decision making.

A lot has changed since then.

New kid on the block

ICANN was nearly stillborn when VeriSign refused to go along with the US Government’s idea of a new body that would oversee the technical aspects of the Internet but also open up the domain market a little. VeriSign was coaxed and threatened into signing up with ICANN, but disliked this new kid on the block.

As the years have gone on, and ICANN has consolidated its power, VeriSign has felt the need to occasionally keep it in its place. But in a big shake-up of ICANN last year, a new head, governments pulled in thanks to threats from the International Telecommunication Union (ITU) - and ICANN found its confidence building.

VeriSign attempted to impose its will once again. Now, as well as every expiring domain being its to do with as it liked, it also decided that all Web addresses incorrectly typed in would be its as well.

The SiteFinder service found the entire Internet industry up in arms and ICANN, bolstered, decided now was the time to stand up to old uncle VeriSign.

ICANN demanded that VeriSign stop SiteFinder. VeriSign thought about it. And decided to go along with it, muttering that it would still put it up in future. It was a big showdown and ICANN was hugely pleased with its victory.

But recent weeks have seen VeriSign talking loudly about how it was going to reintroduce SiteFinder, ignore ICANN’s orders and damn the consequences. At the same time, it is riding a wave of hatred against ICANN. The ITU is making a desperate last attempt at control of the Internet, backed up by the governments of large sections of the world. ICANN’s flaws are becoming more widely known to the general public. Individual countries are refusing to listen to ICANN’s orders.

The final straw

ICANN is in a tough spot. But the final straw was when the ICANN Board pointedly failed to finally approve VeriSign’s WLS at a meeting earlier this month. VeriSign had already won the WLS territory. The Board’s decision - or rather indecision - was no more no less than a statement that VeriSign was now beholden to it.

VeriSign, as ever, was prepared and pulled out its nuclear arsenal. The lawsuit lodged yesterday says that not only is ICANN incapable of controlling VeriSign but it is not allowed to and that it is also liable for its efforts to do so in the past.

It alleges “unlawful acts” by ICANN, a “brazen attempt to assume regulatory power”, a “serious abuse” and “blatant breach” of contracts. ICANN, it says, has “no right to approve, no jurisdiction over” VeriSign. ICANN has “failed to exercise its responsibilities”; “failed to establish meaningful, adequate, independent review policies and appeal procedures”.

In short, ICANN is nothing. And VeriSign is willing to go to court to have it out.

The result?

So will ICANN back down? How can it? If it backs down now, VeriSign will be able to run over it every time it fancies. And there can’t be one rule for VeriSign and one for everyone else, even if that is what VeriSign most desires.

Will ICANN face it in court? Everything in its body will tell it no. VeriSign knows only too well that having the ownership and future of the Internet decided in a Californian court will aggravate the rest of the world to such a degree that during the long legal process, everything it has fought for would fall apart. Besides, ICANN probably can’t afford it.

So what deal can ICANN strike? Give WLS to VeriSign and let SiteFinder by the way? WLS is, without a doubt, the more profitable of the two. VeriSign might let SiteFinder go. But it also mentions in its lawsuits two other contentious areas that it may insist on.

ConsoliDate in any other industry would be called a scam. It “allows” people with more than one domain to pay to move that domain expiration date forward to another’s expiration date so that people have only one date in which they have to deal with domains expiring rather than constantly renew them across the whole year. Guess who gets paid for that?

And the issue of International Domain Names. VeriSign isn’t stupid and realises that the rest of the world is where the Internet growth market is. As such, it wants control over domain names that use foreign languages. It gave it a brief go before ICANN smacked it on the wrist. Will foreign domain names become part of the deal that ICANN will meet to ensure its own survival?

Whatever way you look at it, VeriSign has put down an extremely strong hand on the table. ICANN needs a straight flush - it won’t manage 10, J, Q, K, A, but it might get 3,4,5,6,7. It will take a hell of a lot of work and persuasion to get the relevant parties onside though - especially when all of them will have some sympathy with VeriSign’s position.

But, as with all good poker matches, it would be foolish to discount the other shadowy figure at the table. The ITU is due some luck with its cards. Who’s to say that the inter-governmental organisation won’t draw gasps by throwing down a royal flush and walking away with the entire takings? ®

Related links
VeriSign’s lawsuit filing - part 1 of 2
VeriSign’s lawsuit filing - part 2 of 2
VeriSign’s press release

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