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Lawsuits Filed Against ICANN-VeriSign Settlement

The new organization called Coalition for ICANN Transparency (CFIT) has filed a lawsuit against ICANN and VeriSign in order to stop implementation of the proposed .com registry agreement. According to its description, “CFIT is a not-for-profit Delaware corporation based in Washington, D.C. CFIT’s supporters include individuals, organizations, institutions and companies who are committed to the core principles on which ICANN, the internet governing body is founded.”

In a post by Michael Froomkin on the ICANNWatch website, the following treat is particularly significant in the lawsuite: “In addition to these injunctions, CFIT is alerting the U.S. Department of Justice of the significant anticompetitive issues the proposed .com Registry agreement would provoke. We are filing a preliminary complaint with the European Commission detailing similar issues.” I’m not sure that this Justice Department will care, says Froomkin, “but I suspect that the EU will care quite a bit.”

The following is an excerpt from the CFIT announcement today:

“ICANN has vacated its government-mandated obligation to maintain competition and prevent discrimination in markets related to Internet domain names by succumbing to VeriSign’s strong arm tactic and allowing it to leverage its limited-duration contractual control over .com and .net into a permanent control over those registries and over adjacent markets segments for various domain name services,” said Markham.

The action seeks to enjoin the signing and implementation of a proposed .com agreement announced late last month; an injunction against VeriSign’s monopoly leveraging conduct; an injunction requiring ICANN to adhere to its government mandate to maintain competition and prevent discrimination in the domain marketplace; and an injunction to entertain competing bids for the operation of the .com registry. The suit notes that if the proposed agreement is signed, it would also create problems that do not now exist including:

- Erosion of the Internet community’s role in determining policy

- Locked in price increases adding $1.5 billion to the cost to consumers without economic justification as called for in every other ICANN/registry agreement (with exception to .net, another VeriSign contract), as compared to the amounts that consumers would likely pay under a competitively bid agreement

- Expansion of VeriSign’s contractual control to the detriment of competitive segments of the market
- Permanent control of the .com database granted to VeriSign
- Reduction in the traditional role of U.S. government oversight

The World of Domain Name Developers Inc., has also asked the court to stop ICANN from allowing VeriSign Inc. to maintain control of the lucrative “.com” domain until 2012.

In a recent public statement by Tim Ruiz of the Go Daddy Group posted on the ICANN-VeriSign settlement comment page, he says: “ICANN recently announced that it has reached a proposed agreement to end all pending litigation with VeriSign. We understand the ICANN Staff?s desire to find an amicable resolution to this long-standing dispute. The Go Daddy Group has supported and will continue to support the principles under which the ICANN was formed. However, we believe that the proposed new .COM Registry Agreement indicates that the Staff has lost touch with those principles and the proposed agreement should not be approved without the following changes…”

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Tom Cross  –  Nov 29, 2005 7:30 PM

Forgive me if I’m too cynical here but there are an aweful lot of people involved with DNS who mostly see it as something they can leverage for profit or political power. Could this group be any different?

Lets see… Nice website, spiffy Washington D.C. mailing address, cute acronym, I’m asked to write my Congress person, but not a drop of information about who is behind it or who is on the board. Is Marcie Hatch really spearheading a grass roots campaign to take back the Internet, or is this merely a wouldbe Verisign competitor looking to astroturf their way to a bid on the cash cow?

Steve Jackson Games should release a DNS version of their Illuminati card game. Call it “ICANN New World Order.”

wayne  –  Nov 29, 2005 9:15 PM

So, is this http://www.cfit.info/ organization the same or different from the http://wadnd.com/ organization that also announced today that they were suing ICANN?

Dave Zan  –  Nov 30, 2005 9:14 AM

So, is this http://www.cfit.info/ organization the same or different from the http://wadnd.com/ organization that also announced today that they were suing ICANN?

Rick Schwartz of WADND posted in 1 domain forum they’re working closely with CFIT. Actually 2, but the 2nd’s a paid forum.

One paid-forum member found this press release from 1and1, although he can’t find any link from their site about this so far:

PHILADELPHIA, November 29, 2005 – A draft proposal between the Internet Corporation for Assigned Names and Numbers (ICANN) and domain registry giant VeriSign, Inc. that would give VeriSign exclusive control over the .com domain, is being vigorously opposed by a group of notable domain registrars led by 1&1 Internet, who claim the plan harms competition within the Internet industry and could negatively impact end-users worldwide.

1&1, along with almost all major domain registrars (companies who register Internet addresses on behalf of their customers with registry organizations like VeriSign), is critical of both the content of the proposed agreement—which, among other things, would allow VeriSign to arbitrarily increase domain fees up to seven percent per year—and the manner in which it was drafted.

“The current draft of the agreement practically assigns .com to VeriSign forever,” said 1&1’s Domain Expert Eric Schaetzlein, who will present the registrar community’s concerns to ICANN at its meeting this week in Vancouver. “This contradicts ICANN’s core mission to promote competition in the Internet industry, which was established in its own by-laws and in the Memorandum of Understanding with the U.S. Department of Commerce.”

According to Schaetzlein, 1&1’s and the other domain registrars’ biggest concern with the proposal is the effect that the potential seven percent annual fee increases could have on global Internet users, and the fact that VeriSign can implement the price hikes without justification. Web hosts and registrars would be forced to pass on the fee increases to individual domain registrants.

“Under the terms of the current contract, which is in place until November 2007, VeriSign is required to justify any price-increase, and ICANN has to give its approval,” Schaetzlein explains. “The new wording would be a major step back. Additionally, when VeriSign had its registry license for .net renewed earlier this year, interestingly enough, a major component of their application was a significant lowering of the registration fees.”

Adding to the registrars’ skepticism about the draft contract for the administration of .com is the fact that it is part of the settlement of various legal disputes between VeriSign and ICANN in which VeriSign has agreed to withdraw all charges.

“We think that ICANN wanted to protect itself from possible cost risks and problems with this settlement rather than act in the best interest of both the Internet community and the general public,” said Schaetzlein.

John Kristoff  –  Nov 30, 2005 5:49 PM

I sent the following to the comments section of the cfit.info site, but in case it is not posted there.

Can I see some CFIT transparency?  Is there a list “CFIT’s supporters, that is those “individuals, organizations, institutions and companies” backing CFIT and it’s mission?

I get the impression that there is an impressive list of registrars supporting CFIT, but I don’t see confirmation of that on the site.  Perhaps I’ve missed something?

From what I’ve found so far:

Jason Eberstein, Treasurer and Secretary (employed by Momentous.ca?)
Tony Farrow (Pool.com CEO)
Howard Neu (Lawyer, neulaw.com)
Jennifer A. Ross-Carriere, CEO (lawyer at Momentous.ca and contact for many registrars)

John Berard (zenogroup.com)
.(JavaScript must be enabled to view this email address)

Media Contact
Marcie Hatch
.(JavaScript must be enabled to view this email address)

Note: zenogroup appears to have also done PR for Pool.com

Michael A. Geist, University of Ottawa, Faculty of Law
Keith Butler, CFIT attorney
Richard Chambers, R. Lee Chambers Company LLC
Tony Farrow, CEO Pool.com and CFIT director
Taryn Naidu, President, Pool.com

Who and what else am I missing or have incorrect?  Thanks for the info!

John Berard  –  Nov 30, 2005 8:45 PM

Anyone who was in the room at the special session on the .com deal held yesterday in Vancouver during the ICANN meeting would know that there is broad support for the goals and objectives of CFIT.

CFIT itself grew out of concerns with the elements of the deal when it was described by ICANN staff on a conference call October 24.  More than the surprise of the announcement and the anti-competitive elements of its intent, the group on the phone that day reacted to the lack of transparency of the entire effort.

Under the cover of “negotiations between two parties,” advocates for this deal have sought to avoid the kind of scrutiny that was the hallmark of the community at ICANN’s founding.  This is what needs to be revived; it is a key goal of CFIT and all those who support its goals.

Every organization needs money to operate, there is no attempt to hide that need in modern society.  What sould not be overlooked is that CFIT is but one member of the group working to bring some sense of the market and reality to ICANN

Dave Zan  –  Dec 1, 2005 1:15 AM

John K, thanks for examining and bringing up the list of directors. I recognize one of them: Howard Neu.

Howard Neu is on the Board of Directors for WADND as well. He’s one of the domain name industry’s “seasoned” attorneys.

That list you also provided helps confirm some of the registrars and other companies in the industry are indeed supporting this cause.

Dave Zan  –  Dec 1, 2005 1:26 AM

Round 1 goes to ICANN:


A US Federal Judge has ruled in ICANN’s favor and denied an application for a Temporary Restraining Order (TRO) against ICANN sought by industry group CFIT in the US District Court, Northern District of California.

The application for a TRO was an attempt to block the proposed settlement of a long-standing dispute between ICANN and VeriSign.

ICANN continues to seek comment from the public and its various stakeholder groups on the proposed settlement during this week’s ICANN meetings taking place in Vancouver, Canada.

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