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Technology Stocks : Network Solutions (NSOL)

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To: zonkie who wrote (828)4/10/1999 5:19:00 PM
From: Glenn D. Rudolph  Read Replies (1) of 1377
 
April 10, 1999

Obstacle Remains on Internet Addresses

By JERI CLAUSING

ASHINGTON -- The new corporation charged with opening up the
lucrative business of registering Internet addresses has received
applications from a strong field of candidates wanting to compete
with Network Solutions Inc., the president of the corporation said on Friday.
But a key obstacle remains.

The Department of Commerce and Network Solutions are still going around
in circles in their negotiations on the conditions under which the Herndon,
Va., company will open its government-sanctioned monopoly for registering
Internet names in the domains of ".com," ".net" and ".org."

With the explosion of the Internet, Network
Solutions has grown from an obscure government
contractor to a Fortune 500 company. That has
created a difficult situation for the Clinton
Administration, which is trying to balance the
business interests of the monopoly it created with
the interests of the global Internet community. To
handle the transition, the Commerce Department
last year established the new nonprofit
corporation, the Internet Corporation for
Assigned Names and Numbers (ICANN).

The current sticking points revolve around what data and equipment in the
domain-name registry built by Network Solutions is considered public and
what part of it becomes the private property of Network Solutions. Because
Network Solutions created the domain-name registration system under an
exclusive government contract, everything from the software they developed
to worldwide databases of Internet address holders is in question.

The two sides also have to agree on how much those companies wanting to
compete with Network Solutions will have to pay for a license to begin
issuing domain names through the Network Solutions registry.

Although Commerce Department officials had hoped to have the issues
wrapped up weeks ago, some people close to the negotiations this week
began questioning whether they will now have their differences ironed out in
time to open the registry for a test round of competition scheduled to begin
April 26. ICANN on Thursday closed the application process for companies
wanting to participate in the test. Five companies will be selected April 21.

This week both sides seemed to digging their heels in, with the Commerce
Department pressuring Network Solutions to reinstate public access to
certain areas of their database that tell who owns which domain names and
how long they have held the address.

Access to some of that information was cut off a few weeks ago when
Network Solutions, preparing for the onslaught of competition, steered
traffic from the Internic Web site it has administered for the Commerce
Department to its commercial Web page.

Because Internic, the site where individuals and third-party registrars have
long gone to register domain names and to find out what names have already
been taken, has historically been viewed as a public resource, the move was
criticized by many as the hijacking of a crucial part of the Internet's
infrastructure.

"They acted without the approval of the U.S. government," a senior
Commerce Department official said this week. "We believe that approval
was necessary."

Although access to some of the information that was cut off has been
restored, Network Solutions has refused to reinstate the Internic Web site.
Instead, it has posted an informational bulletin about the changing process at
"www.internic.net," but that dissolves to the Network Solutions home page
after 90 seconds.

"We put this up because we've committed, along with the Department of
Commerce, to keep the public informed about changes to the domain name
system," said Christopher Clough, spokesman for the company.

He declined to comment on details of the ongoing negotiations or to
speculate when they might be complete.

Meanwhile, Commerce Department officials involved in the negotiations said
that next week would be dedicated entirely to ironing out the remaining
problems. "We've had very intense discussions," one senior official said.
"We've got a whole bunch of issues on the plate and we've got a relatively
short time frame to get them worked out."

Regardless, the Commerce Department official and Mike Roberts, president
of ICANN, expressed continued optimism about the chances of opening the
test round of competition on April 26.

ICANN, which is often criticized for its refusal to hold open board
meetings, declined on Friday to say how many applications had been
received from hopeful test participants.

Roberts said only that "we have a strong international list of companies. ...
We are not going to have any difficulty selecting five very aggressive
competitors to Network Solutions."
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