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No Surprise: Verisign's Shift on New gTLDs

Paul Stahura

Five years after ICANN approved the new gTLD policy in Paris, two years after it approved the implementation plan in Singapore, and a year after the application window closed and some concrete steps were taken toward delegation of new gTLDs, a series of scary-sounding "what if" scenarios have mysteriously taken over discussions at ICANN.

From colliding names and failing life support systems to mass confusion and technological outages, the profusion of horror stories has rivaled the hype for the Y2K conversion, with about as much basis in fact. But what's most interesting is who is driving this bout of Chicken Little commentary.

Verisign — the company that has so competently provided stewardship to the .COM and .NET gTLDs — has suddenly found itself "worried" about security risks that it somehow missed during its participation in the eight-year process leading to new gTLDs.

Verisign's official position on new gTLDs may have changed, but the one thing that stays consistent about the company's stance is that it always is driven by what's best for Verisign. It's no surprise a company will act in its self-interest — but when that self-interest is cloaked in false fears about the future of the Internet it becomes deeply troubling. The ICANN Board would do well to remember that as it considers the source for this latest round of fear mongering.

Four years ago, when gTLDs were already highly debated, Verisign was being dogged by antitrust concerns. At that time, Verisign made a very public show of supporting the new gTLD program. Verisign VP of Policy and Compliance Chuck Gomes posted a very well received article here, which pacified critics, fortified ties with the new gTLD community, and improved Verisign's bargaining position within ICANN. Through years of SSAC reviews, Board reviews and reviews by the very constituency group in which Verisign plays a leadership role, the organization has been mum about the supposed dire threats that it has recently "discovered."

Flash forward to today, when Verisign has resolved its contractual renewal issues with ICANN and suddenly, new gTLDs pose real and imminent threat to its marketplace dominance. The company is singing a far different tune.

In a series of recent letters to ICANN, the .com operator has warned of a host of horrors should the organization move forward with its already-delayed new gTLD launch schedule. Not surprisingly, Verisign proposes a massive security overhaul that would delay widespread new gTLD adoption by months or years.

What changed in the intervening years?

Certainly it isn't the underlying technology of the DNS, or the legitimate challenges posed by introduction of new gTLDs, which the ICANN community has been resolving for more than a decade. Indeed, even Versign's own team of DNS technologists, which presumably signed off on the company's previous bullish posture on new gTLDs, includes many of the same experts that it did in 2009. DNS stability and security in general, but also regarding Verisign's specific claim about name collisions and certificates, is better now then when Verisign didn't bring it up years ago.

The thing that has changed is what new gTLDs mean to Verisign's business interests. In 2009, the new gTLD process was a boon for a company that was spending a great deal of its time defending its dominance of the global gTLD marketplace. The program — and Verisign's own support of it — became a handy talking point for executives explaining away the company's dominant market position.

Today, Verisign has secured renewals of both .net and .com, and has agreed to halt its ubiquitous annual .com price increases. So while the idea of the new gTLD program may still have some limited financial value to the company (and to its applicant customers to whom it agreed to provide technical services), the reality of actual, competitive new gTLDs poses a very real threat to its bottom line.

So now the only way to increase revenue is by increasing .com registration quantity — any threat to volume is a threat to revenue — and new TLDs pose a major threat to .com volume.

There is nothing wrong with a corporation acting in its own self-interest in the ICANN process. The multistakeholder model actually depends upon it. Our company is heavily invested in the new gTLD program, and has ardently supported its development, completion and execution through the policymaking process. Admittedly this is our position, but as the community has agreed, it's in the Internet's wider interest to have the competition our company is bringing. But when those policy motives directly contradict one of ICANN's primary mission objectives, transparency becomes even more critical than usual. When tough decisions need to be made, increased competition — instead of benefit to the incumbents' status quo — is the proper default choice.

ICANN was created in large part to promote competition and Internet user choice, i.e., to break Verisign's monopoly position. The new gTLD process represents the ultimate fruition of ICANN's directive to enhance innovation and competition in the DNS.

It is only natural that Verisign shareholders are acting in a rational, self-interested manner regarding this historic development. In scenario planning by our team and others, many gTLD applicants were guessing when Verisign would step in and try to abort or seriously delay the process. It is the step we always expected. But the rest of the ICANN community, staff and Board should have no illusions regarding what is fueling those so-called concerns.

By Paul Stahura, Founder and CEO Donuts Inc.

Related topics: DNS, ICANN, Internet Governance, Top-Level Domains

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