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What's In A Name.Com? Plenty


Legal Affairs: The Internet

What's in a Name.com? Plenty

A brawl over Net names could threaten Web self-government

It seemed like an inspired idea at the time. Recognizing that the Internet moves too quickly to be regulated by government, the White House last year decided to let Web users try to govern themselves. In June, 1998, it proposed creating a series of nonprofit corporations, run by Netizens, to manage vexing issues such as privacy, fraud prevention, and intellectual property protection.

The first matter handled under this groundbreaking plan seemed simple: the regulation of Internet domain names, those "dot.com" addresses that direct people to their favorite Web sites. Enter the Internet Corp. for Assigned Names & Numbers. Chaired by author and businesswoman Esther Dyson, a sainted figure in the tech world, ICANN was supposed to blaze a trail for self-regulation of the Internet.

But after less than a year, the White House's bold experiment in Internet governance is in jeopardy. ICANN is going broke and faces accusations of mismanagement by everybody from Ralph Nader to House Commerce Committee Chairman Thomas J. Bliley, Jr. (R-Va.), who sponsored a hearing entitled "Is ICANN Out of Control?" on July 22. Above all, ICANN is at war with Network Solutions Inc. (NSI), the highflying Herndon (Va.) company that has a government contract to sell Internet names in the .com, .org, and .edu domains. This battle will determine who controls the Web's address system--and, many fear, could even temporarily destabilize the Net.

Indeed, this is the Internet's constitutional moment--the point in time when the political landscape is an open frontier and people gather to draft their Magna Cartas and Bills of Rights. If Dyson's group fails, it could doom the White House's laissez-faire vision of the Net. Instead, we're likely to see more traditional government regulation, which many tech executives fear will create a patchwork of contradictory local laws. If, however, ICANN succeeds, many believe it could evolve into the preeminent regulatory body on the Internet, with power extending far beyond the arena of domain names. Here's a primer on the key issues:

Why is ICANN under attack?

There are two main criticisms of ICANN: that it's operating in secret and that it's trying to grab too much power. Because of the importance of ICANN's mission, critics believe that its decision-making process should be as transparent as possible, and they're angry that its board has held several closed-door meetings. This mistrust has only grown in the wake of a series of recent decisions in which ICANN has, in the eyes of Representative Bliley and others, acted outside its authority. In March, for example, ICANN authorized a $1 fee on domain names to pay for its operating expenses--which Bliley quickly lambasted as an unauthorized tax.

ICANN is trying to mollify its critics. It has repeatedly declared that it has no interest in regulating anything other than domain names. And it has decided to open up its Aug. 26 board meeting in Santiago, Chile, to the public. In July, it also rescinded the $1 domain name fee. These steps have cut down the level of criticism but leave ICANN with a serious budgetary crisis. When former White House Internet guru Ira Magaziner dreamed up ICANN, he decided that the U.S. government should not pay for the group. But he didn't devise any alternative funding method. That's still a problem--not only for ICANN, but for the White House's entire vision of Internet governance. As a result, ICANN is now more than $800,000 in the red and hitting up big telecom and computer companies for donations. In late August, MCI WorldCom Inc. and Cisco Systems Inc. lent it $650,000.

That's not a long-term solution. While the money will ease ICANN's short-term cash crunch, it could cause Dyson's group to be perceived as being in the pocket of big business and hostile to consumer concerns.

Why is ICANN at war with NSI?

The battle between ICANN and NSI was probably inevitable. In 1992, the Commerce Dept. awarded NSI a contract making it the sole registrar of Internet names ending in .com, .edu, and .net, among others. The business is a gold mine. One of the few profitable pure Internet plays on the market, NSI had sales of $94 million last year and boasts a market cap of nearly $2 billion.

Among ICANN's most important duties is to devise a plan for breaking up this monopoly by the time NSI's government contract expires on Sept. 30, 2000, and to cut down the $35 annual fee for domain names. Unsurprisingly, the two sides are at odds on the details of how competition should be created. ICANN wants NSI to sign a contract giving it the unilateral right to terminate NSI's license to register domain names--a provision the company refuses to accept. Adding to the tension, NSI claims it owns the master list of existing domain names and plans to sell it as a Yellow Pages-style directory called the Dot-com Directory. Both ICANN and the government argue that the list is public property.

What will happen if the two sides can't reach an agreement?

ICANN has given NSI a deadline of Sept. 10 to sign a so-called "accreditation agreement" to act as an Internet registrar. If no deal is inked by then, things are going to get dicey. While it's being careful to avoid making threats, ICANN clearly believes that NSI will have no right to remain in business. NSI contends its original 1992 contract with the government gives it the legal authority to continue to operate Internet domains without ICANN's blessing. Legal experts say both sides' positions have some legitimacy. With so much money at stake, this fight could very well wind up in court.

Could the Internet be destabilized by a battle between ICANN and NSI?

If the two sides declare an all-out war, it's possible the day-to-day functioning of the Net could be slightly impaired. NSI manages the definitive registry of domain names. If ICANN or the government shut down NSI on a Monday, on Tuesday there would be no central list of domain names. While other companies own less complete lists, problems could crop up. For example, people who wanted to register new Net addresses would not have a place to go if they wanted to ensure that their domain names would be universally recognized.

No one wants this scenario to play out. The Commerce Dept. is putting heat on both sides to wrap up an agreement as soon as possible. Meanwhile, the Justice Dept. and the European Union are investigating whether NSI is violating antitrust laws--which could also put pressure on the company to soften its position. Although there's a lot of talk these days about how the ICANN-NSI war could destabilize the Net, University of Pennsylvania telecommunications Professor David Farber predicts "the governments would step in to prevent that from ever happening. They would say, `You can't handle this yourself, we will."'

Could ICANN go out of business?

Just as the domain-name wars threaten NSI's existence, they also could doom ICANN. When the White House created the group, it assumed that a nonprofit without governmental police powers would be able to manage Net policy issues effectively. If this turns out not to be the case, then ICANN will probably be shuttered.

At that point, the U.S. and other governments would have three options, according to Jonathan Zittrain, executive director of Harvard University's Berkman Center for Internet & Society. They could hold on to the White House's vision of Internet regulation, try to learn from ICANN's mistakes, and create a new nonprofit to handle domain names. Or they could throw up their hands and give up on the idea of trying to regulate Internet addresses at all. But most likely, Zittrain says, they would assign ICANN's job to a new intergovernmental treaty organization, such as NATO.

Over the long term, that would probably lead to more "top-down" governmental regulation of the Net,rather than "bottom-up" governance by users--the system that has allowed the Internet to thrive so far.

Why are there fears ICANN will become too powerful?

If ICANN survives the crisis, many people believe that it has the potential to wield vast power over the Internet. Why? First, because if Esther Dyson & Co. prove that they're able to successfully manage domain names, then they would be in a strong position to handle more urgent policy problems such as protecting inTellectual property. While no one is asking ICANN to take on more responsibilities yet, the group could tackle problems more swiftly than the alternative: new and untested Internet regulatory agencies.

The second reason ICANN's influence could grow is that domain names are starting to be viewed as a potentially powerful method of getting Netizens to obey the law. When people buy names for their Web sites, they could be required to sign a detailed contract obligating them to comply with a certain set of rules governing the sale of products, the use of someone else's intellectual property, the display of sexual content--you name it. If they violated the terms of the contract, they would forfeit the domain name. That may not sound like a particularly serious penalty, but on the Internet it's a death sentence.

While this may sound far-fetched, it appears to be the most efficient way of enforcing the law on the Net. Already, ICANN is contemplating forcing applicants for new domain names to agree to a set of rules blocking so-called cybersquatting--the practice of registering well-known corporate brand names as domain names before the actual owners have a chance to do so.

"After all the talk over the past few years about how difficult it will be to regulate conduct on the Internet," says David Post, a cyberlaw specialist at Temple University School of Law, "the domain name system looks like the Holy Grail, the one place where enforceable Internet policy can be promulgated without any of the messy enforcement" problems.

Aware of these concerns, ICANN says it has no intention of using domain names as a foRm of backdoor Internet regulation. But getting people to obey the law on the Net is a daunting problem. It would be foolhardy to dismiss the idea that Internet addresses could be used as a lever to enforce important legal rights. Managing those simple .coms and .nets is no trivial matter.By Mike France in New York


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