A second lawsuit intended to prevent the approval of domain name back-order service proposed by VeriSign was filed against the Internet Corporation of Assigned Names and Numbers (ICANN) on February 27, 2004. The plaintiffs claim that the service would stifle competition in the redistribution of registered domain names. VeriSign was named a co-defendant in the suit.
VeriSign, on the other hand, filed a legal complaint against ICANN accusing the organization that it has exceeded its authority by not allowing the company to start the new services.
The plaintiffs claim that the proposed Wait List Service (WLS) would give VeriSign complete control over the reassigning of web addresses that become available when their owners fail or decline to pay the license renewal fee.
Nitin Agarwal, the president of RegisterSite.com, said that today individuals or organizations that wish to reserve addresses held by others could count on a back-order systems that offers different options from various registrars. He noted that if the WLS were approved, it would be a deviation from the fee-for-results principle, where a customer pays a fee of about US$60 only if the domain is secured. With the approval of the WLS, VeriSign would be able to demand high annual fees that would not guarantee success, Mr. Agarwal added. He noted that the WLS would reduce consumer choices by providing wealthy speculators with an advantage in registering deleted domain names.
According to Mr. Agarwal, VeriSign wanted to monopolize the market and put registrars out of business. He claimed that VeriSign was unfairly changing the rules and would be able to control any expired domain name by eliminating any bidding on such names.
VeriSign refused to comment the lawsuit.
When the WLS was first proposed, two years ago, domain names were deleted as soon as they have expired, but today a grace period of 45 days existed and a competitive domain registrar market was present, Mr. Agarwal commented.
According to the plaintiffs in the suit, there was no sense in monopolizing an established market, which already offers many registrar business models.
The suit was filed in the U.S. District Court in Los Angeles and eight domain name registrars ABR Products, Name.com, Lee Chambers Company, Fiducia, Spot Domain, !$6.25 Domains Network, Ausregistry Group and !$!Bid It Win It Inc are the plaintiffs. The suit will most likely be among the issues discussed by ICANN board of directors during their meeting on March 6, 2004 in Rome. The approval of WLS is one of the topics on the agenda of the meeting.
The counter suit filed by VeriSign that claims that ICANN has overstepped its authority and tried to regulate VeriSign’s business illegally by violating its own charter and its agreements with VeriSign would probably be among the discussed issues as well.
New services proposed by VeriSign are at the bottom of the debate. VeriSign introduced a SiteFinder service last fall, which redirects all unknown or unregistered .com or .net domain names to the website of the company. VeriSign was forced to stop the service, after competitors filed fair-trade complaints and ICANN issued a cease-and-desist order.
