Maintaining Order on the Internet

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For most people, the Internet simply exists. We tend not tothink about its infrastructure or stability any more than we wouldconsider the stability of Microsoft or AOL-Time Warner. But if theInternet is to continue to grow, unfettered but stable, as it hasfrom its early days, the issue of domain name registration must beaddressed.

Even to those who follow the ups and downs of the Internet, themanagement of the domain name system is a puzzle. With more than440 million individual users and more than 37 million domain namesunder the dot-com address, managing the ever-growing population onthe Internet who are registering domain names is big business. Andwhether it is large companies like Amazon and Microsoft attemptingto protect their trademark and copyright, or individuals seeking anInternet presence, stability and order should be a primaryconcern.

To provide some background, in 1993 the National ScienceFoundation gave Network Solutions Inc. the exclusive right toregister and maintain all domain names. NSI heldgovernment-sanctioned control over the domain name system until1999, when the Internet Corporation for Assigned Names and Numberswas created by the Department of Commerce, allegedly to oversee thetransition of the domain name registry system fromquasi-governmental control to the free market. In 1999, ICANN andNSI (now VeriSign) entered into an "agreement," in which VeriSignwas told that if it wanted to maintain the term of the registriesof .com, .net, and .org through 2007 it would have to divest theassets of either the registry or the registrar by May 10, 2001.

In the meantime, VeriSign has poured hundreds of millions ofdollars into making the domain name system stable and commerciallyviable. Just last year the company spent in excess of $80 millionto upgrade its servers, which receive approximately two billionhits each day. There are now more than 90 accredited registrars,including Register.com and the Canadian company Tucows, thatcompete alongside VeriSign, which now accounts for only about 30%of all new domain name registrations. The cost of registering adomain name has dropped from $35 per year in 1999 to as low as $15per year now. And VeriSign has paved the way as a full-servicevendor, offering digital certificate technology, multilingualdomain names, and online payment processes. VeriSign should berewarded for strengthening the domain name system and allowing themarket to work.

Under a new agreement with ICANN, pending approval by Commerce,VeriSign would be allowed to maintain the master registry of alldomain names registered by both itself and other accreditedregistrars. The company would also retain its control over the .comTLD by turning over the maintenance of the .org top level domain(TLD) to an appropriate nonprofit and by giving up the .net TLD in2006. In addition to these terms, VeriSign has committed tocontributing more than $200 million to research and development forthe operational infrastructure of the domain name system and payingfees to support ICANN as a governing body. The new agreement is astep in the right direction to remedy the unnecessary divestituremandated by ICANN and the Department of Commerce in 1999. Ifpassed, it will promote stability while allowing competition in theInternet domain name system.

Another wrinkle in the domain name policy debate is the recentintroduction of a bevy of new TLDs by New.net. ICANN has beencriticized for being too slow in the creation of new TLDs, such asdot-kids and dot-xxx, which would place domain names into moreorderly categories based on demand. In comes New.net, with suchhighly sought after domain names as dot-chat, dot-sport, and theaforementioned dot-kids and dot-xxx. Currently, New.net operates ona private network, allowing subscribers to access their domainnames by using a plug-in. While the system is still in its earlyphases and does not yet allow e-mail hosting and othertransactions, it is likely that those bugs will be worked out in afuture version. But for now, New.net has succeeded in signing upEarthLink, Excite@Home, and NetZero and their databases of over 15million users.

If anything is to be learned from the VeriSign-ICANNnegotiations and the introduction of New.net, it is that people arebecoming more and more knowledgeable about the Internet and ways inwhich its governance can be negotiated. Stability of theinfrastructure is vital to the continuation of the Internet as weknow it. But if the current players cannot fulfill peoples' needs,new firms will step in, leaving ICANN in the dust.

Lucas Mast

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