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Internet Space On The Auction Block?
by William New
The international organization that oversees the Internet-addressing system should hold an auction for the right to manage the databases for addresses ending in .net, the Organization for Economic Cooperation and Development (OECD) said in a new report.
"An auction would provide a transparent, objective and verifiable mechanism for the market to appropriately value .net and avoid the pitfalls associated with comparative selection," OECD concluded. The auction could act as a "practical demonstration" for choices for future domain names that are not restricted to certain groups, the report added.
The Internet Corporation for Assigned Names and Numbers (ICANN) approves and assigns new domains based on a review of applications. ICANN has begun the process of identifying a successor for the .net domain by June 2005. The current manager, VeriSign, based in Mountain View, Calif., may compete to keep it.
Published Tuesday, the OECD report also addressed sponsored domain suffixes such as .aero, .coop and .museum that are restricted to certain fields. The report suggested that ICANN consider dropping its enforced division between the registries, or domain manager, and registrars, essentially domain retailers, in the case of small, sponsored domains. Under the proposal, the manager of .museum could offer services directly to its restricted community.
ICANN has received applications for the following sponsored domains: .asia, .cat, .jobs, .mail, .mobi, .post, .tel (two), .travel and .xxx.
Sam Paltridge and Masayuki Matsui of the Paris-based OECD's directorate for science, technology and industry prepared the report. The timing makes it a likely topic for discussion at ICANN's next triennial board meeting July 17-24 in Kuala Lumpur, Malaysia.
Milton Mueller of Syracuse University said the report "should energize discussion in Kuala Lumpur of the .net reassignment and the sponsored [domain] applications before ICANN."
The report fits well with the subject matter of the ICANN meeting because participants will discuss ICANN's role in global Internet governance in light of pressure from some governments and nonprofit groups to get the United Nations more involved in issues.
The Lowdown On Domain Suffixes
The report also includes a numeric analysis of domain suffixes. There are 14 generic suffixes, such as .com and .org, and one ending, .arpa, reserved for Internet infrastructure purposes. As of December 2003, there were 56 million domains registered in the 31 countries of the OECD, more than double the total for July 2000. But the figure includes country-specific domains as well. From the total in December, close to 20 million were country domains, such as .jp for Japan, and 36 million were generic domains.
Due to reasons such as open registration, Denmark, Germany, the United Kingdom, Switzerland and The Netherlands have the five highest number of country domain registrations per capita. The United States' .us domain is fourth lowest of the 31 nations.
For generic domains, VeriSign had 86 percent of the market share as of December, followed by the .org manager Public Interest Registry (PIR), which had 8 percent. But if OECD country domains are factored, VeriSign's market share drops to 56 percent and PIR's to 5 percent.
The country domains account for 35 percent of the total market. Of that, the manager for .de (Germany) controls 35 percent, followed by the .uk (United Kingdom) manager at 24 percent, the .nl (The Netherlands) manager at 5 percent, and all others collectively at 35 percent.
The OECD report also analyzes the relative lack of success of the new generic domains, such as .info, .biz and .name, which were introduced in 2001. And it examines pricing strategies by companies, as well as the market impact of cyber squatters and speculators who buy large numbers of domains to resell.
VeriSign's Place In The Online World
Another notable statistic in the report is the percent market share held by registrars. Under ICANN reforms, Network Solutions, which was acquired by VeriSign in 2000, went from the sole provider of generic domains, with 100 percent of the market, to the leading competitor, with about 21 percent of the market in December 2003.
VeriSign sold its stake in Network Solutions in November 2003. Under its agreement with ICANN, had it sold the stake before May 2001, it would have had an automatic extension of .com, .net and .org until 2007. Instead, it had to relinquish control of .org at the end of 2002 and must compete for .net in June 2005.
The report said even if VeriSign loses management of .net next year, it would continue to be "by far" the largest registry service provider in the market because of the popularity of .com.
The increasingly litigious relationship between VeriSign and ICANN will be a subject of consideration at ICANN's board meeting next week. The board will decide whether to adopt a new report from ICANN's security and stability committee that objected to VeriSign's efforts last fall to offer services at the core level of the Internet. ICANN's demand that VeriSign suspend the one of its services led the company to bring a legal case.
That debate could affect ICANN's view of significant changes in the Internet and telecommunications in the coming years. The committee took the position that a conservative approach should be taken to innovation at the level of set of core Internet protocols. Below the core are new, faster transmission technologies. Above it are new protocols and services such as the World Wide Web, search engines, e-commerce and Internet telephony.
"We emphasize [that] these innovations above and below the core require the core to be kept under very tight discipline and to be both small and stable," the committee report said.
An Appeal For 'Strong' Anti-Spam Laws
The Internet governance debate was stirred last week as the U.N. International Telecommunication Union (ITU) agreed in a meeting on actions to address unsolicited commercial e-mail, or spam.
The group agreed that "strong" legislation at national levels is needed, as are technical solutions, consumer education, industry self-regulation and international cooperation. One expert at the meeting estimated that 80 percent of global e-mail traffic is now spam and put costs of spam at $25 billion per year.
The development of anti-spam laws by ITU countries will help build a foundation that could lead to a global agreement, according to Robert Horton, acting chair of the Australian Communications Authority and chairman of the meeting. He called spam a "major plague affecting the digital world" and said it could be curbed within two years if actions are taken to ensure that spammers have no havens anywhere in the world.
The ITU could help with model legislation and reference materials, Horton said.
Tech News From Singapore To Canada
The Coalition of Service Industries this week applauded a July 2 decision by the Singapore government to uphold an earlier ruling on telecommunications pricing that designated the local leased circuits of the dominant Singaporean carrier SingTel as a mandated wholesale service. The ruling also requires SingTel to give competitors an opportunity to use its lines.
Separately, a new report from Statistics Canada, a government agency, said Canada's use of high-speed Internet service has increased to 65 percent. The most popular uses involve searches for health information and e-mail. Meanwhile, the number of Canadian Internet users who download music dropped from 48 percent in 2001 to 38 percent.
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