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The Commerce Department announced Friday that it has signed off on a new agreement between VeriSign and the Internet Corporation for Assigned Names and Numbers (ICANN) that allows VeriSign to keep full control of its lucrative “.com” Internet domain name business until at least 2007. Commerce Department staff hastily convened a conference call late Friday to orally brief reporters on the terms of the deal. It replaces a 1999 deal that required VeriSign by this year to relinquish control of one of two halves of its domain name operation — the central registries of “.com,” “.net” and “.org” names, or the business of registering names in those domains. Now, VeriSign gets to keep control of the lucrative “.com” domain name registry until at least 2007. As long as VeriSign lives up to the agreement’s terms, it has the automatic right to keep control of the “.com” registry forever. The deal gives VeriSign the permanent right to keep registering names in the “.com,” “.net” and “.org” domains, as well as several new domains that ICANN is establishing. In return, VeriSign must relinquish ownership of the “.org” registry next year and pay $5 million to fund a new nonprofit “.org” registry. The company will give up the “.net” registry to competitive bidding by 2005, and spend $200 million during the next 10 years on the “.com,” “.net” and “.org” registry infrastructures. A VeriSign spokesman said the company intends to compete vigorously for renewal of its control of the “.net” registry. “Our goal throughout the negotiating process was to make sure consumers reap the benefits of an open, stable and competitive Internet,” said Commerce Department general counsel Ted Kassinger in a statement. Network Solutions, which VeriSign acquired last year, enjoyed a fantastic government-granted monopoly in “.com,” “.net” and “.org” name registrations for most of the 1990s in the greatest sweetheart deal since the Louisiana Purchase. Since 1998, the company, still the dominant player by far in the domain name business, has grudgingly haggled with the Commerce Department and ICANN as the latter group strove to introduce competition. “We’re pleased with the agreement,” said ICANN President Stuart Lynn. “It’s definitely a step forward.” Network Solutions has always held most of the cards, and has used its government-granted assets to its own advantage, with Friday’s deal being no exception. Besides its own profitable name registrar business, VeriSign currently collects fees for each “.com,” “.net” and “.org” name registered by its competitors. Friday’s deal means the enormously profitable “.com” registry franchise is VeriSign’s to lose. “These complex agreements mark an important step forward for the Internet,” VeriSign CEO Stratton Sclavos said in a statement. The Justice Department had cited possibly anti-competitive aspects of the deal, including VeriSign’s continued ability to both register “.com” names and manage the central “.com” registry. The Commerce Department didn’t address those concerns Friday, but said the deal didn’t give VeriSign immunity from antitrust investigations. VeriSign will submit to annual independent audits of its domain name business, and the Commerce Department will conduct periodic competition reviews. VeriSign’s automatic control of the “.net” registry can be revoked sooner than 2005 if certain competitive criteria aren’t met. Earlier this week, ICANN announced that it had reached deals with other firms to manage the new “.biz” and “.info” Internet domains. ICANN is still negotiating agreements regarding five other new domains: “.aero,” “.coop,” “.museum,” “.pro” and “.name.” Related Articles from The Industry Standard: Can Napster Change its Tune? Investors Finally Wake Up to Rate Cut Fed Cuts Rates by Half a Point Copyright � 2001 The Industry Standard

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