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ICANN releases new dotcom contract

Big changes made to VeriSign agreement - but are they enough?

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Internet overseeing body ICANN has released a revised contract for all dotcoms which it hopes will finally end a huge legal fight at the heart of the internet.

Significant changes have been made to the deal - which will hand control of all dotcom domains to current owner VeriSign until 2012 - following widespread criticism from the Internet industry.

The new agreement, hailed back in October as bringing in a "new era" for the Internet by ICANN head Paul Twomey,- contains several important alterations.

They are:

  • Removal of a transaction fee that would have been charged to all companies selling a dotcom domain.
  • A new direct contribution that VeriSign pays to ICANN direct.
  • Some limits on VeriSign's price-rising powers.
  • Reduced scope for VeriSign to sell personalised data to third-parties.
  • Marginally increased control over VeriSign's ability to introduce changes to the existing dotcom business model.

However, the new agreement still provides VeriSign with a presumptive right of renewal - meaning it is effectively given permanent control of the dotcom registry, and it also allows the company to seize control of all expiring domains - something that has become a large secondary market.

ICANN is extremely keen for the deal to go ahead as the ongoing dispute with VeriSign is a stone around its neck. Plus, it is caught in a bind. ICANN cannot impose its views on VeriSign because the expiring contract that the new contract will extend was drawn up between VeriSign and the US Department of Commerce.

As such, ICANN portrays the changes made to the agreement as "additional concessions" that VeriSign has "granted". It also warns the wider net community that "VeriSign has advised ICANN that this proposal represents its last, best offer to settle the pending litigation".

The changes are a carefully argued halfway house. Enough concessions are given for the internet industry to feel its concerns have been listened to, while at the same time VeriSign wins complete control of the internet's dotcom business - still by far the most profitable on the net.

The headline issue that VeriSign was going to be able to raise dotcom prices by seven per cent every year has been reduced to the fact it can only raise them for four of the next six years and it needs to demonstrate evidence of the fact that the price rise comes as a result of additional expense on its network to make it more secure.

Without that issue to get angry about, much of the fire against the agreement will be quenched. VeriSign has clearly refused to budge on it being given lifetime control of the dotcom registry, but ICANN is willing to let this go because it believes the importance of dotcoms will diminish as it releases new top-level domains and the internet becomes more search-engine led.

The biggest fight will come from an organisation that calls itself the Coalition for ICANN Transparency (CFIT). CFIT represents an umbrella group of companies that make their money from snapping up and then reselling expired domains at the highest price. CFIT has made a nusiance of itself by suing ICANN, making a formal complaint to the EU and having talks with the US Government about the new agreement.

Under the new agreement, VeriSign will seize control of all expiring domains and will be entitled to sell them through its own system - keeping 10 per cent of the proceeds. CFIT is, naturally, furious about its business model being blown out the water.

But with many of the key concerns dealt with in the new agreement, and ICANN desperate to get the deal agreed, it looks at the moment as though it has reached the best compromise it can. ®

Related links

ICANN main page for the agreement
ICANN's summary of agreement changes [pdf]

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