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To: Charles A. King who wrote (9414)	2/10/1998 9:23:00 AM
From: John Johnston	Respond to of 13949

Interesting news release for this group; Another major component of Knowledge and Distributed Intelligence (KDI) is the National Science Foundations (NSF) portion of the Next Generation Internet (http://www.ngi.gov) initiative. The NSF has requested $25 million for NGI for fiscal year 1999. In 1998, Congress appropriated $23 million to the NSF for NGI research. That money was to come from what has been termed the "Preservation Assessment Fund", currently maintained by Network Solutions, Inc. and created through fees associated with domain name registration. (By agreement with the NSF, Network Solutions has been the exclusive registrar for generic top-level domain names since 1993. (Although the contract agreement expires next month, it may be extended for an additional six months if no alternative domain name registration system is in place.) (http://www.farnet.org/contents/update/1997/1003.html) It was agreed that 30% of the fees collected from domain name registration would be placed into an infrastructure development fund with the government controlling how the monies would be spent. As of October 1997, the fund contained approximately $37 million.) That $23 million is in limbo. The same day the NSF unveiled its 1999 budget request, U.S. District Court Judge Thomas Hogan issued a preliminary injunction preventing the NSF from spending any of the $23 million appropriated by Congress to the NSF for Next Generation Internet (NGI) research during fiscal year 1998. The injunction is the result of a lawsuit filed on behalf of certain domain name registrants against NSI and NSF this past October. The plaintiffs claim that the part of the registration fee set aside for the "preservation and enhancement of the Internet" is an unconstitutional tax and should be refunded to the domain name registrants (http://www.bode.com/PRESS.htm). For a preliminary injunction to issue, the moving party must demonstrate, among other things, a substantial likelihood of success on the merits of the claim. Judge Hogan was convinced that the domain name registrant plaintiffs met this criteria: "Plaintiffs have made a substantial showing that the Preservation Assessment can be considered a tax.. Since there is no dispute that the Preservation Assessment Fund exists to pursue general, public Internet projects and goals, plaintiffs have made a strong showing that the assessment is collected for a public purpose, and not to defray defendant's regulatory costs." The case means that the NSF cannot -- for now -- spend any of the $23 million allocated for its NGI research during FY1998. Despite this setback, the NSF appears to be optimistic that it will obtain significant funding for its portion of NGI -- and broader programs under the heading of KDI -- in the near future.