FC: Verisign will surrender control of .org and .net, by Ted Bridis

[Declan McCullagh <declan () well com>]

***********

From: "Bridis, Ted" <Ted.Bridis () dowjones com>
To: "'declan () well com'" <declan () well com>
Subject: fyi, new Verisign deal....
Date: Thu, 1 Mar 2001 11:26:30 -0500

http://interactive.wsj.com/articles/SB983413593429062903.htm

VeriSign to Surrender Control Over 'Org,'
'Net' Web-Address Suffixes, Keeping 'Com'

By TED BRIDIS
Staff Reporter of THE WALL STREET JOURNAL

WASHINGTON -- VeriSign Inc., which coordinates the world's master list of
Web addresses, has agreed to surrender control over "org" and "net" suffixes
in exchange for keeping long-term rights to manage lucrative "com" names.

Under terms of the surprise deal expected to be announced Thursday, VeriSign
wouldn't be compelled to spin off the part of its business that sells Web
addresses to consumers. That had been a requirement of a landmark 1999
agreement with the Clinton administration, which allowed VeriSign to retain
long-term management control over the Internet's master list of addresses.

Executives involved in the talks say the agreement was driven by VeriSign's
falling market share for sales of new Web addresses. VeriSign currently
sells fewer than half the world's 28.2 million Web addresses ending in
"com," "net" or "org" -- a big shift from its monopoly until June 1999.
There are now dozens of companies that sell Web addresses, though only
VeriSign, until now, has controlled the registry of addresses, for which it
collects a percentage of every sale.

The new agreement preserves VeriSign's control over the "com" master list
through 2007 and promises the company a special "presumption" that it will
be allowed to continue in that role afterward. Currently, dot-com addresses
comprise about 80% of the world's Web addresses.

Another factor driving the deal was that the perceived need for VeriSign to
split into two businesses -- one to manage the master list of Web addresses,
another to sell addresses -- had faded of late, as competitors no longer
feared the registry gave the company an unfair sales advantage.

The deal was quietly hammered out this week between VeriSign and the
Internet Corporation for Assigned Names and Numbers, Icann, a nonprofit
group that manages many of the Internet's core functions. Icann's board will
formally vote on the agreement by April 1. The deal also must be approved by
the Commerce Department. VeriSign's board is expected to approve the deal.

The agreement would effectively create three separate Internet registries to
replace the current unified one. But officials at Icann and VeriSign said
the change wouldn't disrupt Internet operations and that consumers likely
won't notice since the agreement deals largely with behind-the-scenes
issues. Icann is currently creating seven new Internet registries to manage
new domain names such as "biz," "info" and "museum." Those registries would
be separate from VeriSign, which in June 2000 purchased Network Solutions
Inc., original holder of the domain-name monopoly.

Under the deal, VeriSign would permanently surrender control of "org"
addresses by December 2002. The company also would establish an endowment of
$5 million toward the future operation of "org" addresses. It further agreed
to spend $200 million in research over 10 years toward making Internet
registries more efficient.

Icann indicated that it wants "org" Web addresses reserved only for
nonprofit organizations "after some appropriate transition period," a
restriction that hasn't been enforced in recent years. Details haven't been
worked out, though one Icann official suggested that current "org" Web sites
may be allowed to continue regardless of their affiliation with nonprofits.

VeriSign also will agree to give up control over "net" Web addresses by
January 2006; it would be allowed to bid for future rights to run that
registry, but approval by Icann was considered highly unlikely.

Write to Ted Bridis at ted.bridis () wsj com




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