Original URL: https://www.theregister.com/2005/12/01/icann_dismisses_lawsuits/
ICANN shrugs off dotcom lawsuits
But legal threats point to wider malaise
Posted in Legal, 1st December 2005 09:00 GMT
Internet overseeing organisation ICANN has dimissed two lawsuits against it as "attempts to manipulate the public comment process" over future ownership of all dotcoms.
General Counsel for ICANN John Jeffrey told us that the "underlying motivation" of the legal threats was clear in that they stemmed from "specific sectors of the registrar market place". Such groups had brought lawsuits before and it was "not surprising" that they would do so again at this point, he said.
However, the lead lawyer for one of the groups, sat outside the main meeting room at ICANN's Vancouver conference today, told us that they were following a public service remit and were aiming to aid consumers and protect the public interest by highlighting problems with the current agreement.
At staked is ownership of the internet's biggest and most important piece of real estate - the dotcom registry. Every dotcom domain - and there are 32 million of them - that is bought or renewed has to go through the registry owner, and the registry owner currently takes $6 each time for adminstrative charges.
VeriSign's contract to run dotcoms expires next year but as part of a wider deal, ICANN announced last month that it would extend VeriSign's contract, give it effective permanent ownership of dotcom, and allow it to increases prices by seven per cent each year. In return, VeriSign would withdraw its crippling legal complaints against ICANN and accept ICANN as the de facto internet authority.
From both organisations' perspectives it is a great deal. And, it could be argued, any deal that finally prevented the two titans at the top of the internet tree from fighting each other would be good for the internet.
That's what you think
But it has met with widespread criticism and condemnation from the internet community. Not to mention the two lawsuits.
Both the World Association of Domain Name Developers (WADND), and the Coalition for ICANN Transparency (CFIT) have sued in Californian courts this week claiming that the deal infringes competition law, and that ICANN has broken its own bylaws. An early attempt to get a temporary restraining order was dismissed by a judge following a successful plea by ICANN's lawyers.
Nevertheless, the deal struck with VeriSign raises some very intriguing questions that go to the heart of current problems with how the internet is currently run.
John Jeffrey assured us that the ICANN Board was listening to all the public comment made at the conference this week in Vancouver and would make changes and/or decisions on the basis of those exchanges.
However, as has been the case with every public consultation of this nature, Jeffrey acknowledged that there is no bidding impact of public consultation on the Board, and the Board is not even obliged to go through all the comments. We are asked to rely on the fact that the Board will act in the best interests of the internet.
The biggest problem with that argument this time though is that ICANN is intimately connected with the deal. It stands to benefit enormously. Not only would it gain greater authority over the Internet, not only would it have the extremely damaging lawsuits that VeriSign has lodged against it lifted, but it would also benefit financially. The dotcom contract foresees ICANN receiving increasing amounts of a per-domain "tax" over time.
As a result, ICANN's objectivity is fatally undermined. But it is both worse and more complex than that.
Once more unto the breach, dear friends
Under the existing contract, VeriSign has a right of presumptive renewal over dotcom domains. That means that unless it is found to have breached the contract, it gets to keep control.
VeriSign can only be found to have breached the contract if the current legal wrangling with ICANN is brought to a close and the court decides in ICANN's favour. That will take yet more years, cost more millions, and will create yet more disruption at the top of the internet. No one benefits from this, ICANN argues.
If that process is not gone through, the resulting contract extension has to be agreed to by ICANN, VeriSign and the US Department of Commerce. And it is very unlikely that VeriSign will agree to anything put forward by its competitors through the ICANN system.
As a result, ICANN is left in a legal bind. The result of which is the proposed dotcom agreement which, while very far from perfect, is the pragmatic deal that has been struck. VeriSign will make a fortune for the next five years and in return we get an end to the fighting.
There are two very important points to note though:
In the recent internet governance arguments, the US government retained control of the Internet by warning that any shift away from it would damage the effectiveness and stability of the Internet.
The seven percent increase in fees that is in the VeriSign contract and creating much of the argument came about in discussion solely between VeriSign and the US government - the state and commerce departments.
VeriSign is the most effective internet lobbyist in the world and has long held enormous sway in Washington. It maintains and fosters a very close relationship with the current administration.
The seven per cent figure was agreed between VeriSign and the US administration, and only VeriSign and the US adminstration. Any figure - no matter how created - would have to be approved by VeriSign and the US administration. And there is no obligation on either parties' part to seek outside or independent review of this figure.
Now, would VeriSign be able to demand a seven percent increase if it were an international governmental body in charge of the Internet, rather than just the US government?
ICANN is this position is the weakest leg of the stool and effectively has its hands tied.
Resale market
The second point of note is that the two lawsuits stem from companies that will see much of their business from the second-hand sale of expired dotcom domains.
Under the proposed new agreement, VeriSign would effectively take control of this market and keep 10 per cent of sales - with 90 per cent going to the registrar that get the domain for its customer.
The companies that have made a living out of this resale market are, naturally, up in arms. But as Jeffrey points out - and he has a point - "ICANN is not here to protect markets that have come about through the way the internet has been structured. It is here to enhance competition."
The fact that registrars have to bombard VeriSign's computers with as many requests as they can physically fire at it in the hope of picking up an expiring domain is an example of something not working efficiently. Just because it exists, does not mean it is right.
As such, it makes more sense for a registrar to have control over this mechanism. Even if that does mean VeriSign gets fatter on the proceeds as a result.
There are no easy answers to this issue, and they will prompt even more uneasy questions. ®