Jules, I'm glad you enjoyed it. In the event thier are some non believers out their on the growth of the Internet. This article will leave little doubt.
Master of Internet Domains Says It Loses at Monopoly
By David S. Hilzenrath
Washington Post Staff Writer
Friday, January 24 1997; Page D01
The Washington Post
Network Solutions Inc., the Herndon company that has a near-monopoly on the business of assigning Internet "domains," or addresses, said this week that it is losing money on the enterprise.
The company's billing and collection systems have been overwhelmed by the volume of addresses registered amid the Internet's rapid growth, Chief Executive Gabriel A. Battista said in an interview.
In billing, "we haven't done very well where we, like other firms, have been faced with extraordinary growth and literally drinking from a fire hose and trying to get everything done at once," Battista said. The volume of bills "started to exceed our ability to print them and post them and mail them" within seven days, he said.
Critics, including would-be rivals, have assailed Network Solutions' position of virtual monopoly in assigning domains, the parts of e-mail and World Wide Web addresses that end with such suffixes as .com for businesses and .gov for government agencies. The critics contend that competition could promote better and cheaper service. They also have argued that the government put Network Solutions in a position to reap spectacular profits when it authorized the company to begin charging fees for each registration.
But this week, in its first comment on the registry's profitability, the privately held company said it has reaped no such windfall. The registry has lost money in each of the past two years, executives told The Washington Post.
Network Solutions has received payment for only 51.1 percent of the fees for addresses registered from Sept. 14, 1995, when the government authorized it to begin charging fees, to Dec. 31, 1996, executives said. Another 21.1 percent of the fees are past due, and 11.5 percent of the addresses have been disconnected because fees haven't been paid, they said.
Systems designed to handle 10,000 registrations a month have been flooded with many times that number -- about 85,000 a month of late. Still, executives say, the company has been activating 90 percent of addresses on the day it gets the registration forms.
The company charges $100 to register new domains and $50 a year for renewals. Under an agreement with the National Science Foundation, which placed it in charge of the registry, the company is required to deposit 30 percent of the money in a fund for the improvement of the Internet.
If the company loses money on the business, "then they're grossly incompetent," said Richard Adams, chairman of UUNet Technologies Inc., an Internet service company that competed against Network Solutions for the right to run the domain registry. "They ought to be turning a $10 million-a-year profit if they knew what they were doing," Adams said.
But NSF spokeswoman Beth Gaston said: "It's not surprising that NSI is having problems keeping up. They are working very hard in an extremely difficult situation of unrelenting growth."
In effect, the company's procedures allow someone who doesn't pay to use an address for 52 days and to retain control of it for another 60 days.
As of Dec. 31, Network Solutions had collected $42.6 million in fees, the company said. Its 70 percent share of the revenue totaled $29.8 million.
As of Jan. 22, $12.8 million had been deposited in the fund that the company and the National Science Foundation earmarked for the "intellectual infrastructure" of the Internet.
Network Solutions' 1995 agreement with the foundation is vague or silent on key questions about how the money should be disbursed, and the parties have yet to resolve them, company executives said. Network Solutions says it does not believe it has authority to disburse the money and has proposed the task go to a philanthropic foundation.
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Jules, would you believe I still meet people who tell me the Internet is just a FAD!
Regards, Michael |
