Yesterday, a Wall Street based Investment Research
Company issued a strong sell/short sell recommendation on Network Solutions
stock. It also suggested that NSI had mislead investors and
potentially committed securities fraud. NSI's stock plunged in response.
I believe that this is nothing more than Power Politics. NSI is being
targeted financially, and its officers are being threatened with potential
criminal actions. These tactics are being used to break NSI's resolve
to fight for a competitive name space, and to force NSI to be subservient
It reflects the huge power struggle that is occurring behind the scenes,
over the very future of the Internet. This latest salvo is just the latest
shot over the bow.
A Historical Perspective
The U.S. Government, through various defense contractors, started the
Internet. Over time, it moved into the research community, finally
ending up in the commercial realm. It also moved from a U.S. based
collection of networks, to a global collection of networks. As these
changes occurred, it out grew the informal methods of managing Internet
resources that had existed before.
Problems first appeared when the name space started to get crowded, and
companies like Iperdome formed with the goal of bringing new domain names
to market. Although Jon Postel had put forward several proposals to
do this, a controversial proposal known as the gTLD-MoU was presented as
The gTLD-MoU was controversial because it would have confiscated all
generic Top Level Domains, not only from startups like IO Design (who had
been running the .web registry for approximately one year), but also from
Network Solutions. It would have established an authority control
model of governance, and it claimed ownership over the entire name space.
After many complaints from the Internet community, the U.S. Government,
through Ira Magaziner, intervened with both the Green and White Paper
processes. The result of these processes was the White Paper, a
document that was surprisingly supported by virtually the entire Internet
The ICANN Controversy
The controversy begins with the selection of the ICANN Board through
some secret process, and the policies that they are attempting to
implement. This can most easily be seen in their proposed guidelines
for prospective registrars.
With these guidelines, ICANN has, in effect, claimed ownership over the
entire gTLD name space. They have also written their contracts so
that their registrars are completely subject to their whim. Most
ironically, these registrars will still be subject to contracting with
How will all this work? No one knows! In fact, ICANN has
just extended the deadline for prospective registrar applications.
They said that the registrars have too many questions that have yet to be
answered, little things like the wholesale price of a registration, and the
terms of their contract with Network Solutions.
Solving the Wrong Problem
IMHO, the problems we are seeing are directly caused by an overly
aggressive ICANN trying to break the only true threat to their total
control over the gTLD name space -- namely, Network Solutions.
What the spin doctors are conjuring up is a choice between a big, bad
monopoly, and a benevolent body that will keep the name space fair and
controlled for everyone (with *controlled* being the key word).
Framing the issues in this way ignores the only true solution to this
dilemma -- true competition in the gTLD name space.
My own Assessment
Having been involved in this debate for over two years, as the president
of Iperdome [a prospective registry for the .per(sm) TLD], as one of the
leaders of Open-RSC, as a member of the IFWP Steering Committee, and as an
occasional consultant to NSI, I believe the following
NSI has consistently acted in a professional manner, looking out for its
interests in the context of what's best for the Internet. They have
also been supportive of minority positions, free markets, and bottom up
governance as reflected in the Paris Draft and their court released letter
to NSF suggesting competition in the name space.
While some of their recent actions appear to be extreme, I suspect that
they were precipitated by the circumstances surrounding their relationship
to ICANN and the U.S. Government.
Until I know for sure, I will reserve judgement.
On the other hand, the "Investment Research Company's" Report
sure looks like it was written by ICANN's PR firm. Not only does it
describe the world as if ICANN already controls everything (and it
doesn't), it presumes that NSI has hidden this fact from its investors (and
What it does highlight is how different the world may look, depending on
how ICANN is structured. If it follows the White Paper, uses a
bottom-up consensus process, and adopts a light weight standards setting
approach, the world will be a great place.
If it follows the description as outlined in the analysts report, then
we are all in for are very rocky road.
Better fasten your seat belts . . .