VeriSign Signs Surprise New Deal

VeriSign will cede control over .org and .net suffixes in exchange for keeping rights to manage .com names.

As reported on “Internetnews” VeriSign Inc. and ICANN have announced a deal in which VeriSign will cede control over .org and .net suffixes in exchange for keeping rights to manage .com names. This deal will mean that three separate Internet registries will replace the current one and VeriSign will remain whole. This deal has huge importance because of its meaning to businesses and individual registrants. VeriSign will give up .org addresses for good by December 2002, as well as create an endowment of $5 million toward future .org addresses. It also pledged to spend $200 million in research over 10 years to improve the functionality of Internet registries.

VeriSign will continue to operate the .com Registry until at least 2007 and the .net Registry until at least 2006. It has been speculated that increased competition in the Web address market was a catalyst for the deal. VeriSign now sells between 40 and 50 percent of the world"s 28.2 million Web addresses ending in .com, .net or .org -- a far cry from the disturbing monopoly it enjoyed up until 1999.

The agreement came as a shock to many insiders because it seemingly overturns an October 1999 deal with ICANN and the U.S. Department of Commerce that required VeriSign to divest ownership of its registry or registrar businesses to extend the agreement to operate the registry for .com, .net and .org for another 4 years beyond November 2003.

Again, because of the increased competition, registry opportunities have opened up for other registrars. "The competition has been successful earlier and to a deeper extent than ICANN thought it would be and the community thought it would be, so it is a very competitive environment, one that we have a substantial business in, but certainly but it has been easy for entrants to come in and a number of them have been successful in that business," VeriSign Executive Vice President of Corporate and Business Development Robert J. Korzeniewski. said.

Tucows President and CEO Elliot Noss, who is decidedly pro-ICANN and believes "what is good for ICANN is good for the industry" said the proposition is fair. " But VeriSign its chief rival does not see the proposition in as bright a light. Ellen Rony, co-author of "The Domain Name Handbook," agreed that the proposition was not only shocking in its content, but for the fact that it was so "fully formed" even before the landmark decision is actually made.

Further points established were:

  • VeriSign said it would cede control over .net Web addresses by January 2006; the company can bid on the rights for .nets in the future.
  • Furthermore, VeriSign has an unofficial invitation or "presumption" to continue operating .com suffixes thereafter.
  • Both ICANN and VeriSign said the changes should not advertently affect consumers because they will be made within the organizations.
  • ICANN will officially vote on the agreement by April 1. The deal also must be approved by the Commerce Department.