Net Names Competition Is Closer To Reality

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February 09, 1999 (2:24 PM EST)

By Mary Mosquera,

Competition for Internet domain names steered closer to reality with the publication late Monday of guidelines for companies that want to register online addresses.

The Internet Corporation for Assigned Names and Numbers, or ICANN, unveiled proposed rules that should let even small and medium-sized companies compete to be registrars. ICANN is the nonprofit group the government selected to take over management of online technical functions.

Registrars will sell Internet addresses ending in the suffixes .com, .net, and .org. Network Solutions, based in Herndon, Va., has held a monopoly as the sole registrar contracted by the government for domain names since 1993.

NSI said in its comments that the guidelines were preliminary and "not authoritative and not to be relied upon by any party." In addition, the company announced Tuesday a public offering of 4.5 million shares held by Science Applications International at $170 a share.

Although NSI will no longer be the exclusive registrar of online names, it will be one of the competitors and has built alliances with Internet service companies, domain name resellers, and site builders.

ICANN, which seeks public comment through March 3 on 50 questions related to the shared registry rules, will choose five registrars in April to test the system for two months through June before further market opening.

Controversy over the guidelines for competition is expected, said Esther Dyson, interim chairwoman of the ICANN board and chairwoman of EDventure Holdings. "We recognize that implementing changes in the domain name system will be a contentious issue. The point is to make the transition fair, and the results fair," she said.

NSI, which will open its Internet-address database to the five test companies, will continue its assigning operations during the test period. It will share its registry with the five competitors when the testing phase is complete at prices agreed upon by the U.S. government and NSI.

ICANN's goal is to create a stable but competitive market for domain name registration, Dyson said.

The proposed rules set financial, technical, fraud protection, and intellectual-property rights standards. Competitors will have to have at least $100,000 in available capital and $500,000 in liability insurance.

Under the guidelines, the new competitors are to make registration of addresses easy and let customers change registrars without disruption of service. To encourage applicants, great care has been taken to avoid setting needlessly high standards or pointless arbitrary thresholds, the proposal said.

Selection of the five test competitors will be based on the applicants' technical and business capabilities and willingness to commit the required resources. ICANN said it will consider how an applicant would promote competition, expand geographic diversity, and accommodate alternative business models and types, such as banks or ISPs.

Test candidates must pay a $2,500 application fee. ICANN could use a lottery to make final selections, Dyson has said.

The U.S. government has slowly separated itself from administration of the Internet, pushing online groups toward self-governance and competition for domain names, despite significant disagreements among Internet stakeholders. The administration began transferring Internet administration in December to ICANN.