TechKnowledge No. 5

Maintaining Order on the Internet

By Lucas Mast
April 26, 2001

For most people, the Internet simply exists. We tend not to think about its infrastructure or stability any more than we would consider the stability of Microsoft or AOL-Time Warner. But if the Internet is to continue to grow, unfettered but stable, as it has from its early days, the issue of domain name registration must be addressed.

Even to those who follow the ups and downs of the Internet, the management of the domain name system is a puzzle. With more than 440 million individual users and more than 37 million domain names under the dot-com address, managing the ever-growing population on the Internet who are registering domain names is big business. And whether it is large companies like Amazon and Microsoft attempting to protect their trademark and copyright, or individuals seeking an Internet presence, stability and order should be a primary concern.

To provide some background, in 1993 the National Science Foundation gave Network Solutions Inc. the exclusive right to register and maintain all domain names. NSI held government-sanctioned control over the domain name system until 1999, when the Internet Corporation for Assigned Names and Numbers was created by the Department of Commerce, allegedly to oversee the transition of the domain name registry system from quasi-governmental control to the free market. In 1999, ICANN and NSI (now VeriSign) entered into an “agreement,” in which VeriSign was told that if it wanted to maintain the term of the registries of .com, .net, and .org through 2007 it would have to divest the assets of either the registry or the registrar by May 10, 2001.

In the meantime, VeriSign has poured hundreds of millions of dollars into making the domain name system stable and commercially viable. Just last year the company spent in excess of $80 million to upgrade its servers, which receive approximately two billion hits each day. There are now more than 90 accredited registrars, including Register.com and the Canadian company Tucows, that compete alongside VeriSign, which now accounts for only about 30% of all new domain name registrations. The cost of registering a domain name has dropped from $35 per year in 1999 to as low as $15 per year now. And VeriSign has paved the way as a full-service vendor, offering digital certificate technology, multilingual domain names, and online payment processes. VeriSign should be rewarded for strengthening the domain name system and allowing the market to work.

Under a new agreement with ICANN, pending approval by Commerce, VeriSign would be allowed to maintain the master registry of all domain names registered by both itself and other accredited registrars. The company would also retain its control over the .com TLD by turning over the maintenance of the .org top level domain (TLD) to an appropriate nonprofit and by giving up the .net TLD in 2006. In addition to these terms, VeriSign has committed to contributing more than $200 million to research and development for the operational infrastructure of the domain name system and paying fees to support ICANN as a governing body. The new agreement is a step in the right direction to remedy the unnecessary divestiture mandated by ICANN and the Department of Commerce in 1999. If passed, it will promote stability while allowing competition in the Internet domain name system.

Another wrinkle in the domain name policy debate is the recent introduction of a bevy of new TLDs by New.net. ICANN has been criticized for being too slow in the creation of new TLDs, such as dot-kids and dot-xxx, which would place domain names into more orderly categories based on demand. In comes New.net, with such highly sought after domain names as dot-chat, dot-sport, and the aforementioned dot-kids and dot-xxx. Currently, New.net operates on a private network, allowing subscribers to access their domain names by using a plug-in. While the system is still in its early phases and does not yet allow e-mail hosting and other transactions, it is likely that those bugs will be worked out in a future version. But for now, New.net has succeeded in signing up EarthLink, Excite@Home, and NetZero and their databases of over 15 million users.

If anything is to be learned from the VeriSign-ICANN negotiations and the introduction of New.net, it is that people are becoming more and more knowledgeable about the Internet and ways in which its governance can be negotiated. Stability of the infrastructure is vital to the continuation of the Internet as we know it. But if the current players cannot fulfill peoples’ needs, new firms will step in, leaving ICANN in the dust.

Lucas C. Mast (lmast [at] cato [dot] org) is a Researcher in Technology Studies at the Cato Institute in Washington, D.C.