The following letter was sent to US Commerce Department Secretary Donald Evans in
support of the agreement:
On behalf of the Small Business Survival Committee (www.sbsc.org)
and its more than 70,000 members across America, I wanted to take this opportunity
to urge the Department of Commerce to support cooperative agreement reached between
the Internet Corporation for Assigned Names and Numbers (ICANN) and VeriSign, Inc.
that would allow VeriSign to operate the .com Registry until at least 2007 and the
.net Registry until at least 2006.
In 1999, an agreement was reached between ICANN
and Network Solutions (now named VeriSign, Inc.) that called for Network Solutions
to separate legal ownership of its Registry Services business from its Registrar
business. This agreement was reached in an attempt to advance competition among
registrars, and the proposed amendment is intended to address the state of the current
A principal reason the Department of Commerce should support the
proposed amendment is the fact that the goals of the original agreement have largely
been met. The original agreement was crafted in an attempt to bring new competitors
into the marketplace of providers of Internet domain names. Since the 1999
agreement, ICANN has now accredited over 180 competitive registrars, of which nearly
90 are already operational. In addition to the dramatic growth in the number
of companies marketing .com, .net and .org top level domain names, the prices for
these services have also dramatically decreased. In fact, the average cost
to obtain a domain name has fallen from an average of $70 for two years down to below
$15 per year.
There is no inherent reason why a company should not be allowed
to operate a Registry while also competing as a Registrar. In fact, ICANN allows
companies to serve both functions, and the amendment to the original agreement will
create a level playing field that does not require VeriSign to divest itself from
the Registrar business. The changing nature of technology and the Internet
means that companies must have the flexibility to adopt their business plans on a
relatively quick timetable, and this proposed amendment to the original agreement
has been negotiated in response to new conditions that were not present in 1999.
Department of Commerce is charged with reviewing any changes to the original agreement,
and the Small Business Survival Committee wishes to express our support for the amendment.
While it may not appear to be an agreement that will help small businesses, there
are several very simple reasons why this amendment is needed to protect the interests
of millions of small entrepreneurs across America, not to mention the rest of the
First, competition has exploded since the original agreement was signed.
By removing a significant competitor from the market of those serving as domain registrars,
the incentives for keeping the cost of Internet domain names down will be largely
removed. Prices have fallen because companies are competing for market share.
Removing VeriSign from the market will remove the pressure other companies face to
keep lowering prices.
Second, small businesses set up websites and select domain
names for a variety of reasons -- among which is the knowledge and comfort of choosing
a branded company with a long track record of service. Other companies and competitors
to VeriSign are competing to build brand loyalty, but those customers who choose
to stay on with VeriSign to build or renew their Internet registrations should be
allowed to do so if they choose. If VeriSign fails to provide adequate service
for reasonable prices, small businesses will switch to another company to act as
their website registrar. VeriSign has an incentive to keep prices low and service
quality high, and it should be allowed to continue in this business model given the
fact the goals of the original agreement have largely been met.
Perhaps the greatest
reason to support the proposed amendment is simply one of fairness. As the
Internet business changes daily to meet the needs of small businesses and consumers,
companies seeking to compete in the registrar market must be operating on a level
playing field. Forcing VeriSign to operate in a structurally different manner
from its competitors places the company at a competitive disadvantage. With
an increasingly competitive environment, the public interest is not well served to
force a company to spin off or sell a key component of its operation as a result
of an agreement that was forged in an entirely different market.
you for your attention to this matter, and I hope the Department of Commerce will
see the wisdom of ensuring long term competition in the market for Internet domain
names and support the agreement reached between VeriSign and ICANN. Please
feel free to contact me at (202) 785-0238 with any questions, and I look forward
to working with you on this and many other matters.