VeriSign may settle CFIT lawsuit

VeriSign’s chief executive has not ruled out settling its potentially damaging lawsuit with the Coalition For ICANN Transparency out of court.
During the company’s second quarter earnings call earlier this week, Mark McLaughlin was asked whether there was a way the lawsuit could be made to go away, settling investor nerves.
His response: “It is an option that could be pursued.”
CFIT, backed by Momentous.ca, claims that VeriSign’s .com and .net no-bid contracts with ICANN, including the price increases they allow, are anti-competitive.
If VeriSign loses the case, it could face the loss of its .com and .net monopolies, which makes me think it will certainly seek to settle the case before that becomes a risk.
VeriSign currently has to decide whether to request a review at the Supreme Court, or go to the District Court for trial. It has until October 7 to make its call.
Also during Monday’s earnings call, McLaughlin addressed the growth opportunities VeriSign is looking at, following its renewed focus on the domain name business.
Asked whether the introduction of new TLDs would affect .com and .net growth, McLaughlin said:

I think it’s positive… just related to .com and .net, with the introduction of new TLDs there’s an expectation it just brings more people to the market and we generally do better when more people show up to the market. And the second thing, we intend to participate in some of those ourselves, so we see growth opportunities for us.

He also confirmed again that VeriSign will seek to launch non-ASCII internationalized versions of its existing TLD base, which includes .com, .net, tv and .name.
As Andrew Allemann noted yesterday, he also declared the pay-per-click-based speculative registration market essentially “dead”.

VeriSign antitrust claims will be heard in court

VeriSign has suffered another legal setback in its antitrust court battle with the Coalition For ICANN Transparency, after an appeals court ruled that CFIT has a case to be heard.
CFIT reckons VeriSign’s deal with ICANN to run the .com registry, which has a presumptive right of renewal and allows annual price increases, breaks US competition law.
Its complaint had been thrown out of court, but was restored on appeal last year. Today, VeriSign’s request for a rehearing was rejected, meaning the case is cleared for trial.
CFIT counsel Bret Fausett tweeted this evening that it will head either back to the District Court, or to the Supreme Court.
The news couldn’t come at a worse time for VeriSign.
The company has spent the last couple of years getting out of most of its non-domain markets, epitomized by the recent sale of its SSL unit to Symantec, so it is ultra-exposed to risk and uncertainty in its highly lucrative .com business.
For that reason, I doubt this case will ever see trial. We’re looking at a settlement, most likely. VeriSign’s probably going to have to break out the check-book.
CFIT is basically a front operation for Momentous.ca, owner of aftermarket player Pool.com.

More details on the Tuvalu-VeriSign deal

VeriSign offered Tuvalu an extra $1 million a year in exchange for the continuing right to run .tv, but the tiny island nation declined, according to a new interview.
The Australian Broadcasting Corporation has a short audio piece over here on the strained relationship between VeriSign and Tuvalu, including an interview with finance minister Lotoala Metia.
Tuvalu gets about $2.2 million a year from VeriSign, according to the piece, but the government thinks it’s being short-changed.
VeriSign offered the country another $1 million a year, on the condition that the deal would be extended for five more years. It currently expires in 2016. Tuvalu declined.
The company declined to comment to ABC, but AusRegistry chief Adrian Kinderis stepped up to defend the deal, pointing out that VeriSign took all the risk.
Kinderis also accepted the interviewer’s suggestion that the new TLD round could leave .tv “obsolete”.
Here’s a link to the stream.

Tuvalu not happy with VeriSign deal

The government of the Pacific island nation of Tuvalu feels it’s getting a raw deal under its current contract with .tv registry manager VeriSign.
According to Radio New Zealand International, Tuvalu finance minister Lotoala Metia said VeriSign pays “peanuts” for the right to run the .tv namespace:

We are negotiating but we are tied because of the agreement that was signed before us. We cannot negotiate for an increase until 2016. Counter offers have been made but they are not acceptable to the government of the day. So we have to stick to our guns now. They’re giving us peanuts.

VeriSign, and its predecessor registry, run .tv under lease as a generic TLD. It is of course Tuvalu’s country-code. By GDP, Tuvalu is one of the poorest nations in the world.
The RNZI article reports that Tuvalu receives $2 million per year from VeriSign. That’s possibly sourced from the CIA World Factbook, which estimated that amount for 2006.
Yet the CIA also says that Tuvalu receives $1 million per quarter, based on a 12-year, $50 million deal that started in 2000.
For all these facts to be true, the deal must have been renegotiated at some point since it was originally signed.

WSJ reporting bogus Indian domain name market info?

The Wall Street Journal is reporting that India “passed an Internet milestone of sorts” in the first quarter, when the number of .com domains registered in the country broke through 1 million.
Did it?
This is what the WSJ says:

[India] now has more than one million registered web sites using the suffixes .com or .net, according to data released today by VeriSign Inc., the U.S. company that tracks this sort of thing.
In its Domain Name Industry Brief, it reported that India now has a registered total of 1.037 million .com and .net domain names, up from about 800,000 in the same period the year before.

The number 1.037 million is terribly specific, considering that VeriSign’s Domain Name Industry Brief doesn’t say anything of the sort.
There’s nothing in the DNIB to suggest that anybody in India has ever registered a single .com domain.
The DNIB has never broken down .com registrations by location, and the Q1 report, released on Monday, doesn’t use the word “India” once.
If the WSJ numbers are accurate – the paper does appear to have interviewed a VeriSign India executive – I’m wondering how they were calculated.
It can’t be a case of tallying the number of .com domains managed by Indian registrars. Mumbai-based Directi alone has had more than a million .com names under its belt for a long time.
Could VeriSign be mining Whois records for location data?
It runs a thin registry, so it would have to reference Whois data acquired from its registrars in order to compute the numbers.
Or did the WSJ hit on unreliable sources? It seems possible.

Domain name industry growth slowed by China crackdown

The massive slump in Chinese domain name registrations appears to have hit the overall domain name market significantly in the first quarter 2010, slowing its growth.
According to the latest VeriSign Domain Name Industry Brief, only one million net new domains were registered across all TLDs in the period, a paltry 0.6% increase.
There were about 193 million domains active at the end of March, up from 192 million at the start of the year.
A million might seem like a lot, until you consider that the market grew by 11 million domains in the fourth quarter and by three million in the first quarter of 2009.
The slump is certainly due to the rapid decline in .cn domains.
China’s ccTLD had about 13.4 million names at the end of last year, and only 8.8 million at the end of March. April’s numbers show the decline continued, with 8.5 million names registered.
The China drag has been caused by a combination of pricing and the Draconian new identification requirements the communist government placed on the registry, CNNIC.
Chinese registrants now have to present photo ID before they can register a domain.
VeriSign’s own .com/.net business did a decent trade in the quarter, up 7% compared to the same quarter last and 2.7% on December to 99.3 million names in total.
With registrations growing by 2.7 million per month, this means VeriSign already has more than 100 million names in its com/net database.

VeriSign announces bizarre ‘.com 25’ award winners

As part of its 25th anniversary of .com celebrations, VeriSign has today announced the 25 winners of its “.com 25” award.
The award was given to “the 25 people and/or companies whose inspiring contributions were fundamental in shaping the Internet and, thereby, our worlds”, VeriSign said.
The winners all seem to deserve the recognition, even if one of them, craigslist, is technically a .org.
But looking at the 75 nominees the judging panel had to choose from, I’m scratching my head on at least half a dozen of them.
What is Zappos? What does Pandora do? Why is Muhammad Yunus on the list? What on earth is TheKnot.com?
And where are Jon Postel and Paul Mockapetris, who between them basically created the domain name system in the first place?
It’s a little disappointing that the only European with a gong appears to be web inventor Tim Berners-Lee. It’s even more disappointing that I can’t think of any other deserving Europeans.
The full list of winners can be found here.

Will VeriSign change its name?

VeriSign’s $1.3 billion sale of its SSL business to Symantec yesterday means not only that the company will be almost entirely focussed on domain names, but also that it will no longer “sign” anything.
The word “VeriSign” will cease to describe what the company does, so will it change its name?
The idea could make sense, given that the services Symantec bought are all about trusting the VeriSign brand, and Symantec has acquired certain rights to use that brand.
Under the deal, Symantec is allowed to use the VeriSign name in authentication services such as the VeriSign Trust Seal. The company plans to incorporate “VeriSign” into a new Symantec trust logo.
VeriSign boss Mark McLaughlin said on a conference call yesterday that Symantec is buying certain VeriSign trademarks, such as Thawte and GeoTrust, but that VeriSign will stay VeriSign.
Symantec will be able to use the VeriSign brand in its logos for a “transition period of time over a number of years”, McLaughlin said.
On the one hand, there’s a potential for a certain degree of confusion that might persuade VeriSign to brand itself afresh. On the other, corporate rebranding is not cheap.
I suppose, if it does choose to rename itself, it had better hope that its first choice of .com is available.

VeriSign poised to sell SSL business to Symantec

Reliable news sources including the Wall Street Journal and Reuters are reporting that VeriSign is on the verge of offloading its market-leading SSL certificate business to Symantec for over $1 billion.
The sale would be the latest in a series of spin-offs that started in 2007, highlighting the company’s renewed focus on domain names.
VeriSign spent many years acquiring a bunch of companies in tenuously related markets – deals that never really made any sense to me – and the last few years selling them off again.
But SSL is not really in the same category as VeriSign’s bizarre forays into, for example, the Crazy Frog ringtone company. It’s the business the company was founded on when it was spun out of RSA Security 15 years ago.
It’s called VeriSign for a reason.
But offloading the SSL business would make sense. One of the reasons VeriSign bought Network Solutions ten years ago was the obvious retail synergies between domain names and SSL certificates – customers could buy both at the same time.
That synergy was diluted when VeriSign spun the NSI registrar business out as a separate company three years later, creating the vertically separated domain name market we know today.
Symantec, with its fingers in the enterprise and home/small business pies, might be able to make a better crack at the SSL game.
So is this bad news for SSL’s current silver medal holder, Go Daddy?
Possibly. Symantec is a force to be reckoned with – only marketing prowess could explain why so many people use Norton.
Of course, these news stories could be nonsense.
But my guts say they’re probably based on the same kind of leaks that companies often float to the press, to see what the markets do, when they’re in the final stages of negotiations.

Root DNSSEC push delayed two weeks

The final rollout of DNSSEC to the internet’s root servers, a major security upgrade for the domain name system, has been pushed back two weeks to July 15.
ICANN’s DNS director Joe Abley said in an update on root-dnssec.org and in email to the dns-ops mailing list:

The schedule change is intended to allow ICANN and VeriSign an additional two weeks for further analysis of the DURZ rollout, to finalise testing and best ensure the secure, stable and resilient implementation of the root DNSSEC production processes and systems.

The Deliberately-Unvalidatable Root Zone is a way for the root operators to test how normal DNS resolution copes with fatter DNSSEC responses coming from the root, before worrying about issues concerning DNSSEC validation itself.
The DURZ has been cautiously rolled out over the last few months and has been operational across all 13 root servers since May 5.
The original plan called for the roots to become validatable following a key signing ceremony on July 1
The schedule change from ICANN also comes with a notice that the US government will be asking for public comment before the decision is made to properly sign the root.

Prior to 2010-07-15 the U.S. Department of Commerce (DoC) will issue a public notice announcing the publication of the joint ICANN-VeriSign testing and evaluation report as well as the intent to proceed with the final stage of DNSSEC deployment. As part of this notice the DoC will include a public review and comment period prior to taking any action.

I may be just a little forgetful, but I can’t remember hearing about this Commerce involvement before.
Still, DNSSEC is a big change, so there’s nothing wrong with more of the softly-softly approach.