VeriSign Suit Heats Up; ICANN Wants to Dissolve Its Structure

Rhett Pardon
LOS ANGELES — VeriSign Inc. has violated the terms of its .com registry agreement with the Internet Corporation for Assigned Names and Numbers by introducing "value-added" services without following the process for obtaining ICANN approval, according to ICANN in a cross-complaint filing in Los Angeles Superior Court.

In related news, ICANN will end its memorandum of understanding with the U.S. Department of Commerce in 2006 but will remain a nonprofit public benefit corporation, according to ICANN’s strategic plan released Tuesday.

In the court filing, ICANN made the allegations in a cross-complaint after VeriSign accused ICANN of breaching its contract with the registry.

VeriSign has sought to gain “inappropriate financial advantage from its stewardship of the .com and .net registries” through the rollout of fee-based ancillary services that “threaten the secure and stable operation of the .com registry,” according to the complaint.

The court conflict between ICANN and VeriSign comes at a time when ICANN is considering replacing VeriSign as the registry operator for the .net top-level domain.

VeriSign’s current deal with ICANN will expire on June 30, and ICANN is expected to put the contract up for bid by the end of the month.

In the original complaint filed in August, VeriSign contends the contractual agreement it has with ICANN does not disallow services that VeriSign wants to offer.

The company claims these services do not require ICANN approval. ICANN disagrees, and VeriSign contends this costs the company money in delays.

VeriSign wants to reintroduce the controversial Site Finder service, which offers links to possible intended destinations when surfers query for nonexistent domain names. Another is Wait List Service, which recaptures soon-to-expire domain names.

ICANN, in its cross complaint, says that VeriSign violated the registry agreement by failing to follow the agreement’s protocol for obtaining approval of the new registry services.

In addition to seeking judgment that VeriSign's new services violate its original deal, ICANN also seeks a declaration that it is not obligated to renew VeriSign’s .com registry agreement in the event it can demonstrate that VeriSign has violated that agreement by charging higher fees than permitted.

ICANN also seeks judgment that it may terminate the .com registry agreement if VeriSign moves forward with any of the contested services without complying with the procedural requirements of the agreement.

It has also requested the trial court to stay the litigation pending the outcome of an arbitration of similar disputed issues between the parties.

“Because the litigation and the arbitration will resolve the same issues and involve nearly identical agreements, it would be grossly inefficient for the two proceedings to proceed simultaneously,” ICANN said in court documents.

The court will hear ICANN’s request in Verisign vs. the Internet Corporation for Assigned Names and Numbers, No. BC 320763, on Dec. 7.

The ICANN report released Tuesday on dissolving its 1998 memorandum of understanding with the U.S. Department of Commerce appears to reject a single-body structure to overseeing the Internet and all the varied interests.

“This is much more of an international structure that is geared to the globalized economy” of the 21st century, said ICANN CEO Paul Twomey.

Twomey said that ICANN needs to be a multilingual, multitime-zone staff for the up to 40,000 telephone calls and emails the organization receives daily at its offices in Brussels and Marina del Rey, Calif.

With theplan on ICANN’s website, an eight-week public comment runs through Jan. 15. Revisions and the final drafting of ICANN’s strategic plan are set Jan. 15-30, with a second period of public comment Jan. 31-Feb. 11.

The final version will be submitted to the ICANN board in February or March.