GoDaddy criticizes .com contract

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A contract for VeriSign to operate the .com domain should include infrastructure build-out requirements and make the company justify built-in prices increases, a lawyer for the Inc. registrar said Wednesday.

The Internet Corporation for Assigned Names and Numbers (ICANN), the nonprofit organization that oversees the Internet’s technical infrastructure, has not put enough checks in place in a proposed extension of VeriSign’s .com contract, said Christine Jones, general counsel for GoDaddy, during a hearing before a subcommittee of the U.S. Senate Commerce, Science and Transportation Committee.

A presumption from ICANN that the .com contract will be renewed when it expires in November 2007 gives VeriSign a “monopoly” on operating the largest generic top-level domain, Jones said. “It’s incredible to us that ICANN did not include an infrastructure investment requirement in the proposed .com agreement,” she said. “In negotiating that agreement, VeriSign ensured that their revenue would increase, and ICANN ensured that their 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 7 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 .com contract encourages VeriSign to continue investing in infrastructure, instead of waiting until it knows it has a new contract, he said.

The .com domain has never crashed in the last 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 President and Chief Executive Officer Paul Twomey also defended the contract, saying his organization 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 .com contract. “The question a lot of people are asking is, what’s wrong with bidding out .com?” he said. “Why not let VeriSign win it, if they can, with a competitive bid?”

Senators also asked whether the U.S. Department of Commerce should renew its memorandum of understanding with ICANN for the organization to continue oversight of the Internet’s technical infrastructure. The memorandum expires at the end of this month.

GoDaddy’s Jones criticized ICANN for too often conducting business, including the proposed .com 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.

This story, "GoDaddy criticizes .com contract" was originally published by PCWorld.

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