WASHINGTON, March 1 (UPI) -- The U.S. Department of Commerce will now have to judge whether to sign-off on the agreement approved by the Internet Corporation for Assigned Names and Numbers Tuesday night on the controversial dot-com settlement and contract extension with VeriSign.
Critics of the settlement are disappointed with ICANN's approval and may now be redirecting their strategy to convince the Department of Commerce that approving such an agreement promotes anti-competition.
The decision was decided in a 9-to-5 vote, five in opposition and one abstention.
If approved by Commerce, ICANN will allow VeriSign to retain its contract for management of the dot-com domain until 2012.
It also limits VeriSign to raise registration fees at a maximum of 7 percent in four of the next six years, which would increase the current base fee of $6 per domain name to resellers -- contrary to what registrars say should otherwise decrease if there was a competitive bid.
However, the Mountain View, Calif.-based company has said in the past that "presumptive renewal" would create an incentive to invest in the dot-com infrastructure, but registrars have still criticized the company for lack of transparency in its $200 million investment.
Also, under the settlement, VeriSign would pay a one-time $625,000 fee to ICANN for "meeting the costs associated with establishing structures to implement the provisions of this agreement." At the same, ICANN expects to have VeriSign pay a much higher registry-level fee as much as $6 million for operating in the first year and $12 million in 2009.
The settlement puts to rest a long time dispute between the two entities that stemmed from countersuits and litigation over VeriSign's Site Finder which allowed users to look for a dot-com domain that had expired or did not exist.
ICANN Chief Executive Officer Paul Twomey said in a conference call Wednesday afternoon that the approval was based on a long process of consultancy, and it was the best deal in negotiations between the two organizations.
However, he noted that the agreement would beckon the end of the "cold war" between ICANN and the dot-com registry, by establishing security and stability.
He also said that it was a win for the ICANN community in that a large registry operator would contend to the same definition of registry and the implementation process.
Still, he says that many safeguards are put into place for registrars despite the fee hike increase, including committee of registry constituency.
In addition, he said that compulsory arbitration in the international arena would replace U.S. court jurisdiction.
Over the last several months, advocates from Congress, the industry, and advocacy groups have shown dismay over revisions of the settlement from back in October, saying that competitive bid should be opened for the dot-com registry like it was for the dot-net registry.
VeriSign won the dot-net bid, beating out four companies in the competitive process in March 2005.
Co-Chair of the Congressional Internet Caucus Rick Boucher, R-Va., expressed concerns that the agreement would assure VeriSign the "perpetual right to manage the .com top level domain operator (TLD), regardless of the maximum prices it charges for initial and renewal registrations."
"Article IV of the settlement states that the 'agreement shall be renewed upon the expiration of the term,' unless VeriSign fundamentally and materially breaches the agreement and fails to cure," wrote Boucher in a Feb. 17 letter to Commerce Secretary Carlos Gutierrez.
"This clause would effectively allow VeriSign to manage the .com TLD in perpetuity, without respect to the fees it assesses for registrations," he added. "It removes the checks and balances in the current agreement with respect to contract renewal, which provide that the contract be rebid if VeriSign increases the price of registrations about the amount set in the agreement."
But these advocates are even more disappointed by the recent decision.
"We are disappointed that after hearing from so many Internet stakeholders about why this proposal is anti-competitive, the ICANN Board still approved a known bad deal," said Champ Mitchell, Chairman and CEO, Network Solutions in a statement. "The Board has left NTIA with no choice but to reject this deal to ensure that competitive and accountable operation of the .com domain registry is not lost forever to consumers. The long-term interests of the entire Internet community must prevail over short-term expediency for a few."
A spokesperson from the Coalition for ICANN transparency John Berard said in a statement that ICANN was "wrong" to increase prices without justification, allow a monopoly to expand without review, and give VeriSign perpetual ownership of the .com registry.
The advocacy group along with the World Association of Domain Name Developers filed suits against ICANN in November 2005.
"Voting in favor of a bad deal doesn't change the deal's dynamics; it just confirms ICANN's refusal to listen to legitimate criticism coming from every corner of the Internet community," Berard added. "There will not be less litigation. There will likely be more litigation. CFIT's suit against ICANN and VeriSign will certainly continue especially in light of the fact that the judge in the case has upheld our antitrust claims."
