ICANN board votes to approve VeriSign deal

By Steve Malone

Posted on 2 Mar 2006 at 10:36

The Internet Corporation For Assigned Names and Numbers (ICANN) is heading for another storm following its decision to approve a settlement with VeriSign. This gives the registry operator an unlimited hold on the lucrative business of managing .com domains, by giving it first refusal on any future licence when the current deal runs out in 2012. The agreement also gives VeriSign the right to raise its prices by up to seven per cent a year - well above the rate of inflation.

In approving the agreement, the ICANN board has been split almost down the middle with nine voting in favour with five against and one abstention. Each of the board members involved in the decision will give their reasons in the next two days.

The split vote is sure to encourage ICANN's critics who allege that the board has caved in to a threat of legal action by VeriSign and handed over control of the prize top level domain in return for a settlement.

The deal still has to be approved by the US Department of Commerce which for historical reasons has a veto over any agreements relating to the .com generic top-level domain. The Department is being lobbied hard by US lawmakers who see it as a bad deal and also by the World Association of Domain Name Developers, which is already suing both ICANN and VeriSign under anti-trust legislation.

The dispute between ICANN and VeriSign began when the .com registry was ordered to suspend a controversial SiteFinder service which redirected mistyped and non-existent .com addresses to its own search engine. The move caused uproar in the Internet community, not only because many people considered VeriSign's action an abuse of its position but also because software such as spam filters depend on returning a 404 for verifying spoofed sites.

VeriSign reluctantly withdrew the service but sued ICANN alleging that the organisation had overstepped its authority. The two parties eventually came to an agreement which gave VeriSign the lucrative hold on the .com domain while it recognised the authority of ICANN.