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(Boston - April 23, 1999) The Boston Working Group (BWG) today challenged the Internet Corporation for Assigned Names and Numbers' claim that it had opened up the domain name registration market to competition. The group also criticized the contract ICANN has imposed upon its registrars, noting that it requires domain name registrants to sacrifice essential rights when applying for a domain name.

"We see a lot of centralization of power and lots of regulation in the ICANN plan, but very little new competition," said Dr. Milton Mueller, a Syracuse University professor and member of the group.


The ICANN proposal, released Wednesday, accredits five new companies to register domain names in the ".com" ".net" and ".org" top-level domains. Despite ICANN's claims that this will bring competition to the domain name market, Network Solutions, Inc. (NSI) retains its monopoly over the crucial database of registered names. The plan does not authorize new database administrators or new TLDs, and contains no measures to transfer ownership of the .com, .net and .org databases.

The five new companies must pay NSI a one-time fee of $10,000, plus $9 per year for every name they register. Thus, the so-called "new competition" is nothing but an agreement to resell entries in NSI's registration database at a price regulated by the US government. Prior to the ICANN plan, hundreds of registrars were already reselling NSI names, at a higher price.

BWG member David Schutt, network manager at Speco, Inc., questioned the significance of the ICANN initiative: "Is competition between McDonalds franchises meaningful in a world where the only hamburger available is a McDonalds hamburger?"

Dr. Mueller, an expert in telecommunications regulation, noted that the U.S. Commerce Department's National Telecommunications and Information Administration (NTIA) was responsible for setting NSI's compensation at $9/year per name. The NTIA, Mueller claimed, "seems to be imposing a cost-plus, utility regulation model upon the core functions of the Internet. I don't understand why NTIA is opting for price regulation when it could simply open the market to new players and allow customers to have real alternatives. Besides, NTIA lacks the experience, the competence, and the legal authority to engage in economic regulation of Internet name services."

Most members of the BWG group believe that real competition in domain name service will come only with the addition of new top-level domains (TLDs) administered by registries other than NSI. Alternative TLDs have already been proposed for several years, but the US government has not allowed them to be entered into the root server databases. ICANN's plan to offer shared access to a monopoly registry fails to create the kind of product and service differentiation that competition among new registration authorities will bring.


The primary effect of the new plan is not to increase competition in domain name registration, but to give ICANN the power to regulate domain name registrars and domain name holders by creating a uniform and centralized registrar accreditation contract.

Press reports about the ICANN plan completely overlooked the significance of the registrar accreditation contract, which can be viewed at All service providers accredited by ICANN must force their customers to sign away important legal rights, including rights the courts have already granted to domain name holders.

Registrars or registries can cancel or take back the domain name registration whenever they please, and all goodwill or business presence created in that name would be lost. The contract allows ICANN to develop a list of excluded names sometime in the future, and authorizes ICANN to refuse to re-register any name that shows up on that list, once again threatening a domain name holder's goodwill and business presence.

Those who wish to register domain names must also make a legally binding promise that the domain name doesn't interfere with anyone else's possible rights in the name -- something that even domain name lawyers often can't ascertain.

"It's difficult to understand what ICANN is trying to achieve with this requirement," said Mikki Barry, BWG member and intellectual property lawyer. "Even in the best of worlds, it often takes a court to decide whether others have rights in any given claimed intellectual property."

The BOSTON WORKING GROUP is an independent alliance of Internet technology professionals, lawyers, policy analysts, and academics. The BWG submitted a bylaws proposal for a new non-profit corporation to administer Internet domain names and addresses, and its submission played a key role in opening up ICANN to membership and public input. Several BWG members now serve on the ICANN Membership Advisory Committee and the Independent Review Advisory Committee.

Dr. Milton Mueller (East Coast)
Ellen Rony (West Coast)
David Schutt (Central)
The Domain Name Handbook: High Stakes and Strategies in Cyberspace
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