Eight small Internet domain name retailers today sued the Internet's most visible regulatory body, claiming that the group will drive them out of business by giving Web address giant VeriSign Inc. a monopoly over a lucrative portion of the Internet domain name business.
The companies asked a Los Angeles federal court to block the Internet Corporation for Assigned Names and Numbers (ICANN) from approving VeriSign's planned domain name "wait-listing service" and to keep Mountain View, Calif.-based VeriSign from launching it. The lawsuit names ICANN and VeriSign as defendants.
"Most of our clients earn the majority of their revenue from that service," said Derek Newman the Seattle-based attorney who is representing the small addressing companies. "When the [wait-listing service] launches our clients go out of business."
The lawsuit comes one day after VeriSign itself sued ICANN, claiming that the group, which manages the Internet's address system under a U.S. government agreement, is preventing VeriSign from launching new services such as the wait list and a function that offers paid advertising links to people who type nonexistent Web addresses into their Internet browser.
The VeriSign lawsuit and, to a lesser extent, today's action represent the most concentrated legal assault so far on the Internet's most recognized oversight body and could alter the way that people use basic parts of the Internet.
The plaintiffs in the wait list lawsuit, including ABR Products Inc., Name.com and AusRegistry Group, are among several dozen companies that make their business by waiting for attractive "dot-com" addresses to expire and then pouncing on them on behalf of their clients.
VeriSign operates the master registry of dot-com names. Its officials have argued that the speculators put an undue load on the registry by constantly peppering them with requests for expiring names. Under the VeriSign plan, address sellers would pay VeriSign a per-name fee to be placed on a waiting list for addresses. When a contract expires on a domain name, it would go to the wait-listed registrar.
The problem, the registrars said, is that VeriSign can dictate how dot-com retailers do business, making the wait-list service an abuse of its monopoly position, Newman argued.
That abuse will hurt consumers because VeriSign's proposal calls for consumers to pay in advance for names that may never expire. Newman said his clients only charge consumers once they obtain an expired name.
The launch of the wait-listing service would deal a stiff blow to consumers, said Mike Arrington, chief executive of Pool.com Inc., an Ottawa-based company that provides technology for the plaintiffs in the case.
"They're rewinding the clock and saying 'we're going to charge the old style way before competition became a factor,'" he said.
ICANN spokesman Kieran Baker said that the group had not seen the lawsuit and declined to comment on it. VeriSign officials were not available for comment.
ICANN and VeriSign have argued that the wait-listing service will organize what is now an almost anarchic market for expiring names.
VeriSign officials in the past have said that registrars will be the ones selling the wait-listing service and can charge an appropriate markup.
Ironically, one of the allegations VeriSign raised in the lawsuit it filed yesterday is that ICANN has taken too long to approve the wait-listing service, costing the company money by hamstringing its business practices.
