Smoking pistol unravels VeriSign domain name stitch-up

Something funny happened on the way to the DoC

Against all expectations, the cosy deal which obligingly extends registrar VeriSign's .com domain monopoly for another six years (and its .org and .net franchise for another five) appears to be unravelling in the spotlight. An incriminating email reprinted on the ICANNWatch weblog appear to show ICANN's counsel Joe Sims privately laying the groundwork for the deal, which strongly favoured VeriSign, in contradiction to public statements and ICANN's charter.

The DoC was widely expected to rubber stamp the deal, but that looks increasingly difficult in the face of the memo, and leaks in the WSJ that the arrangement had ruffled feathers at the Department of Justice. Now VeriSign, feeling the heat, is indicating it might walk away from the deal altogether.

Tilted playing field

The two Sims emails were unearthed by two Congressmen, John Dingell (D) of the Committee on Energy and Commerce and Edward Markey (D) who sits on the sub Committee on Telecoms and the Internet. The pair dryly describe the arrangement - which gives VeriSign preferential terms and a lock hold on the $500m .com monopoly- as "a most unusual technique for encouraging competition".

"Perhaps the most intriguing contract term gives VeriSign an automatic ten-year term unless ICANN can show that VeriSign is not 'qualified,'" note the Congressmen in their missive to the Secretary of the Department of Commerce. "The other registries which, unlike VeriSign, did not have the federal government to pay for their infrastructure, will only get a five-year term after which they must prove to ICANN they are providing a 'substantial service' to the Internet, but ICANN can still put the contract up for bids based on its 'sole discretion'."

Arms length

However the smoking pistole appears to be in the Sims memo the Congressmen have obtained. It consists of a private let's-do-business solicitation from to VeriSign, and a subsequent, red-faced apologia (the recipient has been redacted).

"It does not appear to have been an arm's-length negotiation, but one in which ICANN's outside counsel agreed to become an 'advocate' for VeriSign before the ICANN board if certain conditions were met," note Dingell and Markey, who obligingly attach the email in question.

Indeed, it would appear so. Sims original email to VeriSign offers the company a number of carrots - taking off financial caps and 'consensus' obligations - and floats some suggestions for reciprocals, such as a gesture that VeriSign would be willing to hand over the root file. (Remember that all the .com names in the world originate in a single text file operated by VeriSign/NSI).

Back tracking furiously, but digging himself in ever deeper, Sims explains this proposal was a "wish list" and that he was "operating on [his] own, without seeking specific guidance from my client." Which is kinda the point, really.

The full details, courtesy of ICANNWatch, can be found here.

In the supposedly free and fair competition for .com, VeriSign's requirements amounted to 18 pages, others' to 38 pages. VeriSign gets a $6 guaranteed minimum free for each .com registered, a tax that elected ICANN director Karl Auerbach describes as a "permanent drag on the dominant portion of the domain name system." There's an account of how the VeriSign deal was presented as a fait accompli in his diary here.

On Tuesday, VeriSign indulged in some brinksmanship of its own, telling The Industry Standard that it was prepared to walk away from the deal. It would take a heart of stone not to rejoice... ®

Related Stories

ICANN approves VeriSign's .com monopoly
ICANN's VeriSign registry deal done without consultation
Fury at ICANN/ VeriSign over .org domains
Country code chiefs, registrars mull ICANN breakaway