AN ARTICLE YESTERDAY INCORRECTLY DESCRIBED THE RELATIONSHIP BETWEEN SCIENCE APPLICATIONS INTERNATIONAL CORP. AND NETWORK SOLUTIONS INC. AS AN INDEPENDENT COMPANY, NETWORK SOLUTIONS ENTERED INTO A COOPERATIVE AGREEMENT WITH THE NATIONAL SCIENCE FOUNDATION IN 1992 TO ASSIGN AND MANAGE INTERNET "DOMAIN" ADDRESSES. SAIC ACQUIRED NETWORK SOLUTIONS IN MARCH 1995 AND SPUN IT OFF AS A PUBLICLY TRADED COMPANY IN SEPTEMBER 1997.
Quietly tapped by a Washington lawyer acting on the wishes of a reclusive university researcher, the 10 board members were meant to be the first trustees of the Internet: volunteer stewards who would assume technical control of the global computer network and break up Network Solutions Inc.'s lucrative monopoly in registering electronic addresses.
It was a task that was almost universally cheered by Internet activists and businesses when the group was formed nine months ago. But not anymore. A growing number of critics contend that the group, dubbed ICANN, is stealthily morphing into a regulatory agency for the traditionally unregulated Internet.
Leading the charge against ICANN -- by underwriting activists and hiring lobbyists -- has been one very self-interested party: Herndon-based Network Solutions, which is refusing to participate in ICANN's plans for competition.
The battle between ICANN and Network Solutions has the potential to disrupt the $150 billion flow of information and commerce on the Internet, as both sides engage in a tug of war over the network's master database of addresses. The fight also underscores how the Internet has graduated from being a creature of high-minded and freewheeling academics into a big business proposition that is struggling to establish some form of professional management.
Technical control of the Internet has long rested with the U.S. government, which created the network in the 1960s. But in a coming-of-age moment for the online world, the Clinton administration decided last year to transfer its authority to the private sector -- through ICANN.
ICANN is headed by Esther Dyson, an author and analyst who is one of the technology industry's best-known leaders. She has forcefully warned Network Solutions that it could lose its right to assign and manage addresses, its chief source of revenue, if it does not cooperate with ICANN. But Network Solutions has been unmoved, refusing to even recognize ICANN as a legitimate organization. "They're not really necessary," said Jim Rutt, Network Solutions' chief executive.
Dyson argues that Network Solutions' opposition to ICANN's plans to foster competition isn't based on principle, but out of a desire to "prolong its monopoly."
Administration officials have called Network Solutions' refusal to deal with ICANN "extremely destabilizing for the Internet" and "quite harmful to its development." Network Solutions, in turn, has warned that there would be "serious security and stability issues" for the Internet if the company is stripped of its ability to manage addresses that end with ".com," ".org" and ".net." Network Solutions warned such a move could result in ICANN and the government "disconnecting 5 million Internet addresses."
"The risks are very high," said Harris Miller, the president of the Information Technology Association of America. "The thought that these obscure techie issues are somehow going to affect the operation of the Internet is really a very scary proposition."
Network Solutions, ICANN and the administration all have incentives to reach an agreement without a bloody fight. For Network Solutions, not striking a deal with the other two and risking the chance it could lose its address-management role could worry many of its investors, who recently have bid the company's stock to record highs on the assumption that it will continue to dominate the address business. For the administration and ICANN, yanking away NSI's address-management function could open them to criticism that they are fracturing the network.
"I think we're all interested in making this work," Dyson said.
At the same time, industry and government sources say the negotiations have not progressed significantly in recent weeks, creating a high possibility that one side might decide to take drastic action. "The process," said one source close to the matter, "is not moving forward the way it should be."
The roots of the current conflict extend back to 1992, when the Internet was the territory of academics and computer enthusiasts. Needing an organization to manage addresses on the network -- known as "domain names" -- the National Science Foundation entered into a cooperative agreement with defense contractor Science Applications International Corp., which eventually spun off the business as Network Solutions.
As businesses began their frenetic rush to the Internet, Network Solutions' arcane agreement, which allowed it to charge $35 a year to register a domain, quickly turned into a lucrative government-sanctioned monopoly. To date, the company has registered more than 5 million domain names, helping it post an $11.2 million profit on revenue of almost $94 million last year.
Soon, other firms began demanding a piece of the action, arguing that having a monopolist running the operation was impeding the growth of electronic commerce. After debating the issue for months, the White House decided last year to open domain registrations to competition and have a nonprofit corporation manage the process.
It turned out to be easier said than done.
There was no nonprofit group ready to assume the reins, so the government turned to Jonathan B. Postel, one of the Internet's founders. A Birkenstock-wearing researcher at the University of Southern California who had long been critical of NSI's monopoly, Postel set about soliciting suggestions from the Internet community for the corporation's board.
Postel then drew up a list and had his Washington-based lawyer, Joe Sims, contact the prospective members. He included such industry and academic luminaries as Dyson and Linda Wilson, the president of Radcliffe College. But just as the group was readying its first meeting last fall, Postel died.
The organization, formally named the Internet Corp. for Assigned Names and Numbers, eventually was pulled together by Sims. In April it picked five firms, including Dulles-based America Online Inc., to begin offering domain registrations on a test basis. ICANN has selected two dozen other firms to offer competing registration services, but they will not be able to until ICANN, Network Solutions and the Commerce Department can agree on pricing and other issues.
Under the government's competition plan, Network Solutions would become one of several firms offering address registration services, but it would still have the sole right to run the master database of addresses. That database would tell firms if a certain address already is taken, preventing them from issuing a duplicate. The firms would pay a small fee to Network Solutions to keep track of addresses, but thus far, Network Solutions and the government thus far have been unable to agree on the size of the fee.
Meanwhile, from almost the instant it was founded, ICANN has come under fire from many quarters of the Internet community. Activists have questioned the way the board was picked and its decision to meet behind closed doors. The board's subsequent decisions to charge a $1 fee on every domain to fund its operations and support a World Intellectual Property Organization plan aimed at resolving trademark disputes further enraged the activists, who worry that ICANN is moving well beyond its technical management mandate to more broadly regulate the Internet.
"The Internet has been successful because it never had any centralized management," said Tony Rutkowski, an Internet consultant in Northern Virginia who performs some work for Network Solutions. "ICANN appears to be out to change that."
ICANN officials deny they are moving beyond technical oversight and say much of the criticism reflects natural growing pains as the Internet moves to a self-governing structure. Nevertheless, Dyson admits it was a "political and practical mistake" to hold closed meetings and vows that future gatherings will be open. And on Monday, ICANN decided to abandon the $1 fee, which was called an "Internet tax" by critics.
"It became an issue that distracted from our mission," Dyson said. She said ICANN, which is essentially broke, instead will look for contributions from businesses and the government to keep the group afloat.
Dyson and Sims blame Network Solutions for much of the opposition to ICANN, which Sims believes, is being used as a whipping boy for Network Solutions' disagreements with the government. "We're an easier target than the government," said Sims, who contends that Network Solutions "has put a lot of work into supporting, encouraging and actually paying for critics" of ICANN. Network Solutions also has enlisted a team of high-powered lobbyists, led by Dan Dutko, whose firm also represents AT&T Corp. and the parent company of Federal Express, to press its case on Capitol Hill.
Today, House Commerce Committee Chairman Thomas J. Bliley Jr. (R-Va.) plans to hold a hearing titled: "Domain Name System Privatization: Is ICANN Out of Control?"
Given the differences that remain among Network Solutions, ICANN and the administration, sources close to the negotiations believe there is a high possibility the Commerce Department either would strip the firm of its address-management function or the company would simply walk away from the agreement, opening itself to competition on more favorable terms and forcing the government to file a lawsuit if it wants to have someone else run the address database.
Industry and academic experts following the debate worry that both sides are playing a high-stakes game of political chicken with the Internet's critical infrastructure.
"There's an awful lot at risk here," said Michael Froomkin, a law professor at the University of Miami who recently helped start a group called ICANN Watch. "And thus far, neither side seems to be doing much to minimize that risk."
HOW THE INTERNET'S ADDRESS DIRECTORY WORKS:
1. When a user types in a World Wide Web address, the request is passed along to the user's Internet service provider.
2. When the ISP receives the request, it first searches its own servers for the corresponding Internet protocol number, a unique number assigned to each Internet "domain," analogous to a telephone number. Most large ISPs have a "name server" that contains the IP numbers for many commonly accessed Internet domains. The IP number for www.washingtonpost.com, for instance, is 188.8.131.52. The number does not denote a geographic location; instead, it identifies the ISP that hosts the site and the particular point on the ISP's network where the site is located, allowing traffic to find the site.
3. If the IP number is located, the site is contacted and sends back a page that is displayed on the user's screen. The entire process usually takes less than a second.
4. If the IP number for the site is not stored on the ISP's servers, the ISP then queries one of 13 "root" servers, the Internet's equivalent of the White Pages phone directories. The servers have an authoritative list of domain names and their corresponding IP numbers. Once the number is found, the site is accessed.
5. Network Solutions, which manages the master database of all domains that end in ".com," ".org" and ".net," updates the 13 root servers daily. It runs the "A" server, which is considered the authoritative server for the Internet as a whole.
CAPTION: Esther Dyson heads the White House-backed committee that is being accused of becoming a regulatory agency for the traditionally unregulated Internet.