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VeriSign dotcom contract slammed

Lawyers criticise 'presumptive right of renewal'

A contract that hands control of the dotcom registry to US company VeriSign indefinitely was attacked at a US Senate hearing yesterday.

The head lawyer for the world's largest domain purchaser, GoDaddy, said VeriSign should be forced to justify built-in price increases in the contract. There were also not enough checks in place, argued Christine Jones to the Commerce, Science and Transportation Committee.

The contract signed between internet overseeing organisation Icann and VeriSign also gives the company a "presumptive right of renewal" over the dotcom registry – something that Jones said was akin to a monopoly over the internet's largest and most profitable asset.

"It's incredible to us that Icann did not include an infrastructure investment requirement in the proposed dotcom agreement," Jones said. "In negotiating that agreement, VeriSign ensured that its revenue would increase, and Icann ensured that its budget would benefit, but who's going to ensure the benefits of the public interest?"

The proposed agreement allows VeriSign to increase wholesale site registration fees by seven percent in four of the contract's six years. More oversight on pricing is needed, Jones said. "Other legitimate monopolies must justify their price increases, and VeriSign, the monopoly provider, should be required to do the same," she said.

But VeriSign already spends significant money improving its internet infrastructure every year, said Ken Silva, VeriSign's chief security officer. The Icann presumption that it will renew the dotcom contract encourages VeriSign to continue investing in infrastructure, instead of waiting until it knows it has a new contract, he said. The dotcom domain has never crashed in the past seven years, but price increases may be necessary as attacks against internet domains become more complex, Silva added.

"We're not talking about commodity hardware here," Silva said. "There's no automatic price increase. What there is, is a possibility of a price increase, based on the security and stability needs we have at the time."

Icann CEO Paul Twomey also defended the contract, saying his organisation is fostering competition in other ways such as creating more top-level domains. There are also nearly 800 site registrars competing for business, he said.

But senator Gordon Smith, an Oregon Republican, questioned the contract. "The question a lot of people are asking is, what's wrong with bidding out dotcom?" he said. "Why not let VeriSign win it, if it can, with a competitive bid?"

Senators also asked whether the US Department of Commerce should renew its memorandum of understanding with Icann for the organisation to continue oversight of the internet's technical infrastructure. The memorandum expires at the end of this month.

Christine Jones criticised Icann for too often conducting business, including the proposed dotcom agreement, "behind closed doors". She called on Congress to require Icann to create a plan to increase the internet community's confidence in it.

Even though Icann needs to improve its transparency and accountability to the internet community, the memorandum should be extended, said John Kneuer, acting assistant secretary for communications and information at the Department of Commerce's National Telecommunications and Information Administration. Icann is taking steps to improve support from its constituencies, he said.


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