Users to Lose Web Addresses Over Unpaid Fees

By Leslie Walker
Washington Post Staff Writer

Saturday, June 24, 2000; Page E01

Internet address king Network Solutions Inc. this week notified thousands of owners of online domain names with delinquent registration bills that it would auction the Web addresses to the public unless they pay by Wednesday.

Customers and competitors of the Herndon-based company complained loudly about the plan, saying Network Solutions should instead be required to return all delinquent names to a public database where any of several dozen other accredited registrars could offer for sale the names ending in ".com," ".org" and ".net."

The auction is the latest in what competitors say is a series of anti-competitive actions by Network Solutions, which last year lost its government-sanctioned monopoly on assigning domain names.

"It's a matter of legal interpretation, and our counsel is looking at it," said Michael Roberts, president of Icann, the Internet Corporation for Assigned Names and Numbers, the nonprofit group appointed by the Clinton administration to establish rules for the Internet's addressing system. Icann received the complaints yesterday.

One of the largest and most profitable Internet companies, Network Solutions was acquired by VeriSign Inc. this month in a deal valued at $15 billion.

Network Solutions said people misinterpreted the e-mail it sent delinquent name-holders to mean that the company would auction names to the highest bidder. "The names will be offered for whatever price is required to liquidate the debt," said Douglas Wolford, general manager of the registrar.

Wolford said Network Solutions has to pay a $6 fee to the registry--the master database maintained by a separate division of the company--even for delinquent accounts. "We have paid for them, and so we are out of pocket," he said.

Network Solutions plans to keep the money from the auction and will not allow competitors to resell the names. Domain names are issued for fees of $15 to $35 a year, depending on the registrar, and sometimes are resold at lofty prices.

Wolford said some recipients of the e-mail may have been confused because, starting in July, Network Solutions will begin auctioning some valid Internet addresses to the highest bidder, but those are owned by people who paid for them and may have bought them from competing registrars. Network Solutions will take no commission on the sales but will offer to sell services to the buyers and sellers.

In the e-mail it sent to delinquent account holders, the company said if an account was not paid in full by June 28, "we will enter the domain name in Network Solutions' new auction site. . . . Any and all proceeds that we receive . . . will be retained by Network Solutions, and your domain name will be transferred to the successful bidder."

Elana Broitman, director of policy and public affairs for competitor Register.com, called the auction plan "an abuse of the registry system. They should release the names. This is undermining the competitiveness of the marketplace."

"It's an inherently unfair thing to do," said Judith Oppenheimer, president of ICBtollfree.com and member of an Icann oversight group.

Network Solutions has drawn criticism in the past for not requiring upfront payment to register names, which allowed speculators to reserve names simply to take them off the market and then not pay. In an agreement with Icann earlier this year, Network Solutions agreed to tighten its payment requirements. But it recently began offering 90-day free trials of names ending with ".net," causing its competitors to cry foul because once someone takes a name even on a trial basis, it is taken off the market and, if the owner ends up not paying, it could become the property of Network Solutions.

It is unclear how many delinquent domain names may be affected by the plan to resell them at auction because, Wolford said, the company does not disclose its delinquent accounts. But Network Solutions said in its 1999 annual report that 36.5 percent of all people who registered names with the company in recent years had failed to pay.

As of March 31, the company had registered more than 10 million names.

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