Original URL: http://www.theregister.co.uk/2005/10/25/verisign_icann_deal/

VeriSign and ICANN strike monster net deal

Verisign drops lawsuits, gets dotcom registry to 2012

By Kieren McCarthy

Posted in Financial News, 25th October 2005 12:04 GMT

VeriSign has dropped all its lawsuits against internet overseeing organisation ICANN, agreed to hand over ownership of the root zone, and in return been awarded control of all dotcoms until 2012.

The agreement is a huge boost to ICANN, dragged down by the lawsuits and fighting for autonomy against both the US government and the United Nations. But it also represents a significant victory for VeriSign's obstructive tactics as ICANN sought to establish its sway over the net.

We predicted the end of VeriSign's legal actions - first begun in February 2004 - back in May this year. Once the internet giant had signed a new contract for all dotnet domains, we argued, it will call off its lawyers.

That contract, which covers the dotnet registry until 2011, was awarded at the end of a highly-controversial tendering process that we demonstrated had been skewed in favour of VeriSign, and which drew complaints from all corners of the internet industry.

Even when signed, the contract drew heavy criticism for giving VeriSign a free hand in how it ran the registry and how much it was allowed to charge. Following some changes and an extended public consultation, that contract is due to be signed any day now. The timing of the ICANN-VeriSign agreement will not be seen as a coincidence. VeriSign gets to keep its two biggest assets - the dotcom and dotnet registries - and ICANN finally gets VeriSign's acceptance of its authority.

President and CEO of ICANN, Paul Twomey, was naturally delighted with the agreement: "This proposed agreement settles many of the long-standing points of tension between ICANN and VeriSign. The settlement opens the way for a constructive and productive relationship between ICANN and VeriSign that will benefit the global internet community, and further illustrates the benefits of a multi-stakeholder approach."

VeriSign appeared to be equally pleased. The general manager of its naming arm, Mark McLaughlin, said: "An agreement could not have been reached without both sides trying to find compromise and new solutions. VeriSign’s objective was to gain clarity and business certainty for Internet operators. We are confident that this agreement accomplishes that objective and provides a framework for strong industry-ICANN partnership based on clear definitions and processes."

VeriSign and ICANN have always had a difficult relationship. VeriSign existed before ICANN and originally possessed almost complete control of the internet. ICANN was created to oversee and open up the Internet which inevitably meant pulling power away from VeriSign in virtually every move it made.

With enormous financial resources, VeriSign has put ICANN under heavy pressure by launching numerous lawsuits. ICANN admitted as much in its 2004 annual report, and publicly stated it again in the minutes of its Board meeting yesterday, stating: "Significant ICANN funds and staff, and ICANN community resources, have been devoted to addressing many long-standing points of tension and litigation between VeriSign and ICANN, which have adversely affected the broader internet community".

VeriSign has also very effectively lobbied Washington over the years to put pressure on ICANN to make decisions in its favour.

The situation had to come to an end eventually and the price for VeriSign to finally hand over authority over the root zone - the lynchpin of the internet - was control of the two biggest global registries on the internet - dotcom and dotnet - for another six years.

Under the proposal, VeriSign and ICANN will create and agree to clear definitions and processes on the future of the domain name system - including the all-too-familiar and hopelessly abused "security and stability" mantra.

VeriSign has agreed not to make changes to registry services without prior notice. A standing panel of international neutral technical experts will review proposed changes to registry services. And competition issues will be referred to appropriate governmental competition authority/authorities.

The whole agreement is excellent news for both ICANN and VeriSign but also for the wider internet community.

Most significantly in the current context, the deal provides ICANN with some much-needed authority. The organisation's entire future in being debated across the world and will most likely be decided next month at a World Summit in Tunisia.

As it stands, the world is split into three camps over how the internet should be run in future. One group, lead by the US, wants the status quo to remain and the US government to remain in overall but loose control of ICANN, with ICANN deciding all fundamental decisions about the internet.

A second camp - led by Brazil, China and Cuba - wants control of the internet taken away from ICANN altogether and given to a new United Nations body. And a third compromise camp - led by the EU - suggests a new forum to discuss internet issues plus a new body of international governments that would have overall control of ICANN.

With ICANN embued with more authority it should be able to push negotiations more in its favour. Only time will tell.®

Related links

ICANN announces the agreement
VeriSign does the same
Verisign and .net: a winner all the way
ICANN Board minutes
VeriSign's litigation over the years

Related stories

VeriSign responds to .net report criticisms
More criticism piled on .Net report
.Net report speared a third time
.Net report was fudged
.Net report slammed again
Denic damns 'errors' in .net report