ICANN, VeriSign amendments pass final test

As expected, VeriSign Inc. will continue to operate the .com Internet top-level domain registry through 2007, while giving up control of the .org registry next year and putting the operations of the .net registry up for open bids in 2005.

Under the agreement announced last Friday by the U.S. Department of Commerce, the changes are being made to revise the original contract signed in November 1999 between VeriSign and the Internet Corporation for Assigned Names and Numbers (ICANN), the organization responsible for managing the Internet’s domain-name system. The Commerce Department approval was the final step in approving the deal.

Brian O’Shaughnessy, a spokesman for Mountain View, Calif.-based VeriSign, said the amended terms reflect changes that have occurred in the online world since the original contract was signed. The original contract was assembled under the assumption that competition would develop slowly, but the market grew far more quickly than anticipated, requiring amendments to the original deal, he said.

“This new agreement allows clarity for VeriSign to do its job,” O’Shaughnessy said. “Now we have a clear set of terms by which we can do our business.”

Originally, the company was to maintain control of the .com, .org and .net registries through 2007.

In March, however, a series of amendments was proposed in which VeriSign would give up the .org and .net registries early. Marina del Rey, Calif.-based ICANN gave its approval for the proposed changes in April.

Critics, however, vocally criticized the deal, saying that the conditions were too favorable for VeriSign. The company will continue to maintain the overall .com registry, as well as operate a separate registrar business that registers companies wanting .com Web names. Also blasted by critics was the contract language that gives VeriSign “presumable right of renewal” for the .com registry when the deal expires in 2007.

Under the new deal, VeriSign will turn over the .org registry next year to a nonprofit group, along with US$5 million to help continue its operations.

In 2005, when the .net registry agreement expires, VeriSign will have to compete with other bidders to maintain that registry. If the growth of the .net registry fails to meet specific competitiveness goals, VeriSign could lose control of it in 2003, according to the new agreement.

In a statement, Commerce Department general counsel Ted Kassinger said his agency “sought changes to promote competition, preserve stability and protect consumers. We believe that our objectives have been met.”

To ensure the total separation of VeriSign’s registry and registrar businesses, the company will now be subject to annual independent audits, which will be submitted to ICANN, the Commerce Department and the U.S. Department of Justice.

All other terms of the agreements between VeriSign and ICANN remain unchanged.