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Overview Edit

Network Solutions, LLC (NSI) was founded in 1979. The domain name registration business is the most important division of the company. As of 2006, Network Solutions managed more than 7.6 million domain names. Their size, founding status, and longevity have made them one of the most important corporations affecting domain name pricing and policy.

Registry and registrar business Edit

In 1992, Network Solutions was the sole bidder on a grant from the National Science Foundation (NSF) to develop the domain name registration service for the Internet. In 1993, Network Solutions, Inc. was granted an exclusive contract by the NSF to be the sole domain name registrar for .com, .net and .org top level domain (TLD) names.[1] NSI also maintained the central database of assigned names called WHOIS. Network Solutions acted as a de facto registrar, selling names directly to end users.

In 1995, the National Science Foundation gave NSI authority to charge for domain name registrations.[2] Network Solutions charged $100 for two years registration was imposed on all domains; 30% of this revenue went to NSF to create an "Internet Intellectual Infrastructure Fund." [3] In 1997, a lawsuit was filed charging Network Solutions with antitrust violations with regards to domain names.[4] The 30% of the registration fee that went to the NSF was ruled by a court to be an illegal tax. [5] This led to a reduction in the domain name registration fee to $70. [6]

Network Solutions' $100 charge, which many parties believed was excessive, in addition to its monopoly position in the market, was one of the contributing pressures that resulted in the creation of the International Ad Hoc Committee and its failed attempt to take control of the domain name system, and to the U.S. Department of Commerce, NTIA releasing the White Paper and ultimately contracting with the Internet Corporation for Assigned Names and Numbers (ICANN) to administer the DNS.

Following a year of negotiations, an agreement was hammered out between the Department of Commerce and NSI in September 1999 that paved the way for open competition in domain name registration. Under the agreement, NSI would make a one-time grant of $1.25 million to ICANN to help cover their administrative fees, and formally recognize that ICANN had administrative authority over domain name registration, while NSI would retain control over the domain name database until 2003 (at which point a successor registry, possibly NSI, would be designated).[7] In aiding competition, the agreement opened up the way for other firms to handle domain name registration, providing that they paid a six-dollar-per-name fee to NSI to have the new name entered in NSI’s database.[8]

References Edit

  1. In 1992, Congress allowed commercial activity on the NSF's network, one of the networks that became the Internet and permitted NSFNET to interconnect with commercial networks. Scientific and Advanced-Technology Act of 1992, 42 U.S.C. §1862(g).
  2. On September 13, 1995, NSF and Network Solutions entered into Amendment 4 of the cooperative agreement, which permitted Network Solutions to charge for the registration and maintenance of domain names.
  3. FTC Staff Advisory Letter from David Medine to David Graves, Netsol (Aug. 21, 1997); Domain Name Solution Causes New Problems, IEEE Computer Oct. 1999
  4. Network Solutions sued for domain-name antitrust, Sunworld April 1997.
  5. Thomas v Network Solutions and NSF, Civ. No. 97-2412 (TFH) (Apr 3, 1998) (copy from CourtTV); Judge rules domain fees illegal, CNET April 9, 1998
  6. How to Get Your Own Domain Name, PCWorld.com (June 8, 2000); Domain fees lowered, CNET (Mar 16, 1998).
  7. The agreement did not specify the process by which ICANN would designate the new domain name registrar, but the agreement did provide NSI with financial incentives to withdraw from the registration business. If the registry was sold to another company in the first eighteen months after the agreement was ratified (which occurred in November 1999), the purchaser of the registry would have administrative authority over domain names for an additional four years after 2003, (thereby increasing the sale price, other things being equal). For more information on the agreement, see here.
  8. NSI also registers domain names themselves, charging anywhere between $35 and $169, depending upon the registration options desired (e.g., length of registration, listing in a directory, etc.).
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