CYBERSPACE – The Internet Corporation for Assigned Names and Numbers (ICANN) published on Sunday a summary of draft revisions of the non-profit’s revised settlement agreement with domain name registrar VeriSign, which outlines several changes to the initial settlement that was announced last October.ICANN and VeriSign had been involved in a dispute that focused in part on VeriSign’s use of the Sitefinder search engine, to which end users were directed if they keyed in to non-existent or invalid web addresses. In October, the two organizations announced a settlement agreement, for which they subsequently sought public comment.
Under the terms of the revised agreement, a one-time payment to be made by VeriSign was reduced from $1.25 million to $625,000. In addition, ICANN will forego the previously proposed $0.45/$.50 per transaction charge, which would have been passed through to registrars under the original deal.
In lieu of the per transaction structure, VeriSign will directly pay ICANN a “fixed registry level fee,” which will begin at $6 million per year, and then increase over the next two years to approximately $12 million, according to the summary of the settlement published on the ICANN website.
In the agreement summary, the annual payment from VeriSign is characterized as “a significantly increased payment by VeriSign and share of the burden of supporting ICANN.”
Although the summary concedes that the revenue expected under the revised agreement “represents a reduction in the amount of fees ICANN expected to receive under the previous per transaction plan,” the summary also asserts that ICANN will be able to reach its revenue goals “through a combination of this increased fixed fee, and the anticipated continuation of the US$0.25 per transaction variable registrar level fee.”
The revised agreement does not change VeriSign’s “presumptive right” to renew its contract for .com registry control in 2012, when the six year period covered by this agreement expires.
According to the summary, VeriSign’s ability to raise prices is limited under the revised settlement, noting that VeriSign can only raise prices four years out of the six-year term of the agreement. Any such price increases are also limited to 7%, and would have to be based on costs incurred “due to the imposition of any new Consensus Policy or documented extraordinary expense resulting from an attack or threat of attack on the Security or Stability of the DNS.”
The revised settlement must now go through another round of public commentary and receive approval from the board of ICANN before it can be finalized. In the meantime, a legal challenge to the settlement announced in October is going forward, and the coalition that brought the lawsuit appears unimpressed by the changes in the ICANN/VeriSign settlement.
The Coalition for ICANN Transparency brought suit against ICANN and VeriSign in November, asserting that the settlement, as drafted in October, would result in a monopoly, and encourage anticompetitive practices.
According to CNET News, coalition spokesperson John Berard said the revised agreement “makes cosmetic changes but leaves the original deal largely intact,” and added that the coalition is planning to press ahead with the litigation.
The coalition was not alone in its criticism of the original deal, which many analysts warned would lead to substantial increases in domain name prices, and amounted to granting VeriSign permanent control over the registry.
