ICANN Threatens To Revoke VeriSign's Right To Sell Dot-Com Names

The world's largest retailer of top-level Internet addresses could lose its right to sell "dot-com" domain names if it fails to address accusations that it violated its contract with global Internet addressing authorities.

The Internet Corporation for Assigned Names and Numbers (ICANN), which manages the Internet's global addressing system, today accused VeriSign Inc. of failing to comply with its accreditation agreements, citing 17 separate violations over the past 18 months.

ICANN officials contend that VeriSign ignored its contractual responsibility to maintain an accurate, searchable database of its customers. All accredited Internet registrars are required to maintain publicly available "Whois" databases, which often provide the only clues to the identities of Web site operators.

If VeriSign's Dulles, Va.-based addressing unit fails to remedy those contractual breaches in the next 15 business days, ICANN could revoke the company's contract to sell dot-com names.

VeriSign will correct the violations immediately and "continue to strive for excellence within all the parameters of its registrar agreements," company spokesman Brian O'Shaughnessy said today.

Of the more than 150 "registrars" accredited to sell names ending in dot-com, dot-net and dot-org, VeriSign is the oldest and largest. As of today, VeriSign also becomes the first registrar to be threatened with losing its accreditation, according to ICANN.

All of the violations cited by ICANN were Whois infractions. Although registrars are not obligated to verify the accuracy of the information in their Whois databases, under their contracts with ICANN they must remedy any incorrect entries brought to their attention.

In one recent case cited by ICANN, VeriSign allegedly failed to correct a Whois entry in which a domain name was registered to a "Toto," who listed "the yellow brick road, Oz, KS" as a street address.

While O'Shaughnessy said VeriSign would work to correct the mistakes in its Whois database, he criticized ICANN for equating the 17 violations to a pattern of abuse.

"It's like holding a few grains of sand in your hand and calling it a beach," O'Shaughnessy said. "We're going to correct these because we take our obligations seriously [but] calling it a pattern and dictating that it's cavalier is an unfair characterization."

But ICANN spokeswoman Mary Hewitt said it wasn't the violations that were ICANN's main source of concern, but VeriSign's attitude toward rectifying the identified Whois errors.

"How many notices do we give before it becomes an issue?" Hewitt asked. "Other registrars usually address these issues rapidly."

Hewitt said that VeriSign ignored direct pleas from ICANN to rectify the violations.

In addition to its complaint, ICANN today announced the establishment of a centralized online form (located at www.internic.net) that Internet users can use to report faulty Whois data. ICANN will also establish a tracking system to notify registrars of reported inaccuracies.

In addition to being the largest registrar (or retailer) of dot-com names, VeriSign is also sole registry (or wholesaler) of names ending in dot-com, dot-net and dot-org. Since Whois databases are the responsibility of Internet registrars, VeriSign's registry unit is not included in the ICANN complaint.

In its function as registry, VeriSign charges Internet registrars (including its own registrar unit) a flat annual fee of $6 for every dot-com name they sell to customers. Registrars, in turn, charge consumers varying annual fees to maintain their domain names. VeriSign's registrar charges its customers $35 a year.

Before ICANN's inception in 1998, VeriSign maintained a government-approved monopoly over wholesale and retail sales of dot-com names.

The U.S. Commerce Department, which maintains backend control of the Internet's authoritative root server, in 1998 commissioned the nonprofit ICANN to inject competition into the addressing sector. In that role, ICANN has accredited dozens of new address retailers, and has approved the creation of several new Internet domains to spur competition at the wholesale level.

ICANN and VeriSign often clashed during the early stages of ICANN's existence over their different views for how best to introduce competition to the addressing industry. After VeriSign signed accreditation deals with ICANN in 1999, the two entities appeared to enter a truce of sorts, but differences reappeared last month when VeriSign joined other Internet registries to urge the U.S. government to scale back ICANN's powers.

In addition to its extensive addressing business, Mountain View, Calif.-based VeriSign is one of the world's largest Internet security companies. The company posted $984 million in revenues last year. But the dot-com downturn has taken its toll on VeriSign, which earlier this year laid off a more than 400 employees after posting disappointing earnings.

VeriSign's registrar unit maintains more than 10 million domain names, O'Shaughnessy said