ISP News


Afternic, ICANN Settle Lawsuit

On July 3, 2000, ICANN's legal counsel contacted Afternic's lawyers to settle Aftnernic's lawsuit. The agreement specifically allows co-branded registrars. ICANN's web site lies, in detail, about the agreement.

by Judith Oppenheimer

The Internet Corporation for Assigned Names and Numbers (ICANN) announced on Friday, July 7th that, Inc., agreed to voluntarily dismiss its lawsuit against ICANN, and to accept ICANN's terms under which a separate company, eXtraActive, would be accredited.

According to ICANN, under the agreement, will:

ICANN announced emphatically that the terms of the agreement were identical to those offered by ICANN to Afternic on April 7, 2000, approximately two months before filed its federal lawsuit against ICANN.

ICANN claims victory, accepts defeat
An announcement on ICANN's site boasts, "The terms of the agreement are identical to those offered by ICANN to on April 7, 2000, approximately two months before filed its federal lawsuit against ICANN."

"Today's agreement represents a total vindication of ICANN's position. We are pleased that has agreed to resolve its dispute on ICANN's original terms," lies ICANN President and CEO Mike Roberts. "ICANN is committed to a fair, open, and consensus-based policy process," Roberts proclaims incredulously, adding, "we do not look kindly on efforts to sidestep that process through litigation."

Louis Touton, ICANN's general counsel, postures, "ICANN will be monitoring eXtraActive and very closely to ensure that the conditions of the agreement are met."

Andrew McLaughlin, ICANN's chief policy officer, puts the icing on the cake: "By ending its lawsuit on ICANN's terms, has agreed to resolve these issues through the ICANN policy process, rather than in the US courts."

In truth, however, it was ICANN who acquiesced hook, line and sinker, to Afternic's original demands that it be treated fairly and equitably, by the same standards and ground rules as and (according to registrar's public S1 filing, the company invested 2.5 million dollars for a 10% ownership stake in It also has an active seat on's board).

Final events in this matter unfolded as follows: On July 3, 2000, three days prior to scheduled depositions of key ICANN personnel, ICANN's legal counsel contacted Afternic's lawyers to discuss the possibility of a last minute settlement of the suit brought by Afternic and eXtraActive.

Unlike previous settlement discussions and all discussions prior to the suit, ICANN agreed to put into writing that an ICANN accredited eXtraActive could enjoy a co-branded, cross-linked partnership with Afternic not unlike the partnerships that exist among many other ICANN accredited registrars and domain aftermarket sites.

A July 6th letter from Louis Touton to Afternic's Jon Whelan confirms this, specifying that the existing co-marketing behavior of registrar and Afternic-competitor - cross linking and co-branding - would now apply to the Afternic/exTraActive settlement.

This July 6th letter, together with the April 7, 2000 assurances constitute the entire agreement for settlement. The full text of the memorandum and assurances may be viewed at

The real deal
The conditions that Touton sternly brags ICANN will "monitor very closely," are in fact benignly as follows:

"Paragraph F. ICANN ... shall permit Afternic and eXtraActive to make available on their respective web sites "links" to each other that are based, in form and in substance, on the linking relationship that and had with one another as of July 3, 2000.

Specifically, makes available on its web site a link to (an ICANN accredited registrar) that permits a customer to go from the GreatDomains web site to a web page operated by

That web page is "co-branded," in that it has a banner at the top that shows the names of both and After going to this co-branded page, the customer may register a domain name wit, with the purchaser being required to enter into's standard form of registration agreement, which does not mention

In addition, there is a link on the co-branded web page to the web site if the customer is interested in selling or purchasing a domain name on the secondary market.

ICANN understands and interprets the April 7 Agreement to permit Afternic and eXtraActive to have exactly the type of relationship that is described in the previously forgoing sentences of this Paragraph F, subject (as noted in paragraph B of the April 7 Agreement), to the adoption by ICANN's Board of Directors of any policies affecting the ability of accredited registrars to conduct their businesses in this manner. ICANN hereby acknowledges that eXtraActive will be executing the April 7 Agreement in reliance upon the understanding and interpretation set forth in this paragraph."

Only because ICANN agreed to allow and eXtraActive to compete as co-branded, cross-linked partners in the domain name industry like other accredited registrars, did Afternic dismiss the suit.

We can only guess at the basis for ICANN knowingly, misleadingly, publicly insisting that "The terms of the [Afternic] agreement are identical to those offered by ICANN to on April 7, 2000..." (see

But participants and observers of ICANN activities including those this week in Yokohama, Japan, should make certain to look beyond ICANN pronouncements. Lurking not far behind can usually be found accurate information on which one can base more realistic opinions, decisions and actions.