Value-Added Registration Services Aim to Break NSI Monopoly

One of the Internet's strangest accidental empires, Network Solutions Inc. (NSI, www.networksolutions.com), is fighting with a growing number of competitors who are seeking to break its lock on domain name registrations. In addition to charges of monopoly, the challengers are coming after NSI by tempting customers with value-added registration services.

NSI generates much of its revenue by the grace of a government contract, recently renewed through September 2000, that appoints the company as the sole registry for .com, .net and .org domain names. The contract ensures that companies or institutions wishing for their own .com, .net or .org address must pay NSI for the service.

But NSI is now besieged by competitors who argue that the contract is a government-granted monopoly that is bad for them, bad for end users, and bad for the Internet as a whole. "We need to end the stifling control of a monopoly supplier and see what new services spring up with competition," says Ivan Pope, CEO of NetNames Ltd. (www.netnamesusa.com), which provides registration services worldwide. "I think the whole Internet [community] will be pleasantly surprised."

NSI doesn't share this view. Doug Wolford, senior vice president of marketing and sales at NSI, says .com is a brand name grown by NSI. "Dot com is the gold standard," he says. "We compete with 240 other registries, and each one has the same ability to create a brand around their name."

A number of mostly smaller countries are trying to do just that. Tuvalu is charging $1,000 a year for registrations in its .tv domain, arguing that cnn.tv is a better name than cnn.com. Turkmenistan is working with NetNames to sell addresses in the .tm domain, reminding buyers that "tm" also means trademark. Tonga is selling space in .to, allowing users to come up with names like how.to. Registrations in the Cocos Island's .cc domain are available for $50 a year.

To combat NSI’s hold on the domain name market, companies such as NetNames are offering value-added services: mail and URL forwarding, directory services, hosting, trademark dispute resolution, and multicountry registrations. NSI also has begun to offer some of these services, such as mail forwarding, for additional fees.

"Currently NSI uses its position as both registry and registrar to privilege itself and to refuse to add any new services at the registry level. NSI can use its monopoly position to try and force competitors out of business," Pope explains. "If this happens, the end users will suffer."

The Clinton administration would like to induce competition by splitting the registrar function -- checking name availability and processing applications -- and the registry function, which involves maintaining the database of registrations. The administration is asking the newly formed Internet Corporation for Assigned Names and Numbers (ICANN, www.icann.org), chaired by Esther Dyson, to oversee the process.

Unfortunately, it seems as if domain name issues will be resolved by policy, not by technology or market dynamics. "The problem with domain names is that they cross over from a purely technical issue into being a legal and functional issue," Pope says. "No one is really going to get very upset about their personal IP address, but they get very upset about domain names, with good reason."

So for IT managers looking to put their company on the Internet with a unique name, the choices have gotten more complex. Right now, value-added services could be a good way through the maze.

Some of the other players in the value-added domain name arena include the following: RealNames (www.realnames.com), a free service from Centraal Corp., ensures names within its system are unique and allows the use of non-Roman characters, such as Chinese; Register.com, from Forman Interactive, offers free registration services in a number of domains, and offers Namestake service, which provides domain name and trademark research; TABNet (www.tabnet.com), from Verio Inc., provides web hosting services in addition to registration.