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04 Aug 2009

Verisign fires back at CFIT and sets a trap for ICANN ICANN

Last month the Ninth Circuit revived CFIT's anti-trust case against Verisign. On Thursday, Verisign filed a most interesting petition for rehearing.

As you would expect, they offer a whole bunch of arguments about why the original decision to dismiss the case was right, and the appeals panel was wrong to reinstate it. Many of them are procedural, and look to me like they could be fixed by amending the complaint. It was never clear why they dropped ICANN from the complaint; to fix the objection that it takes two to have a conspiracy, CFIT might have to add ICANN back in. Verisign makes arguments about why the price is reasonable and how important it is that Verisign have the wherewithal to pay for all the stuff they have to do to make the registry secure and stable, although they never explain why it costs $6.86 to make a .COM domain secure and stable, but they can do it for .NET, which uses the exact same infrastructure, for only $4.98.

The most interesting objection is that the US government approved the contract under Verisign's longstanding cooperative agreement with the US Department of Commerce, a heavily amended version of the original 1993 agreement with what was then NSI to run the Internet's registration services, so antitrust law doesn't apply. This is a somewhat strong objection, although the latest 2006 amendment to the agreement specifically says "This approval is not intended to confer federal antitrust immunity on Verisign with respect to the Registry Agreement", a detail that Verisign somehow also neglected to mention in their petition.

This objection sets a trap for ICANN. For many years, ICANN has claimed that any minute now their Memorandum of Understanding with the Department of Commerce will wrap up, and ICANN will float free unbeholden to any government, or equally beholden to all governments which amounts to the same thing. But what if the MOU is the only thing standing between Verisign and a huge anti-trust case that could easily drag in ICANN? By my reading, the Cooperative Agreement ends if the MOU does, and even if Verisign were able to negotiate an amendment to make the Cooperative Agreement survive the end of the MOU, ICANN would look pretty stupid if they were nominally independent but the only registry that matters (.COM is far bigger than all of the other ICANN-managed domains combined) were still run under a US government contract.

I said last month that I looked forward to the interesting documents that are likely to appear in the discovery stage. We're not even close to discovery, and it's already interesting. Stay tuned.

  posted at: 22:31 :: permanent link to this entry :: 0 comments
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