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[ga] Current state of Versign's illegitimate activities


I apologize for the inflammatory nature of the document but I dont know how 
else can years of persistent anticompetitive activity be addressed. I urge 
DNSO representatives to aggressively pursue their mandate. Best Regards



What is Verisign really up to?

(Here is the stuff you wont see in their press releases)

Verisign is once again trying to exploit its monopoly status and drive its 
competitors out of business.  The Internet infrastructure gorilla, worth 
over $6 billion in today's market, is still pushing its latest 
anti-competitive tactic called the Waiting List Service to control the 
secondary market for domains and force massive new costs on its small 
competitors.

For most of the Internet's history the government granted the former 
Network Solutions Inc. monopoly status in domain registrations. This policy 
was widely regarded as a failure since NSI did not meet basic service 
levels and simultaneously forced every domain consumer to pay excessive 
fees that some considered an illegal tax (usually $70-$119 per registration 
wherein the new competitive market offers the same for about $10-$30 and 
often provides enhanced service levels). Hence, the government tried to 
break the monopoly by separating the now Verisign Global Registry with its 
retail Verisign Registrar service. Unfortunately this new policy leaves a 
monopoly on the registry side wherein every new competitor still has to pay 
Verisign $6 for every registration to manage the central database - 
eventhough the company is working against them in the marketplace. These $6 
fees from competitors apparently rake in a cool $180 million per year for 
Verisign.

Despite Verisign's monopoly power, competitors have been making inroads in 
to the secondary domain market which includes previously owned but 
currently expired domains. Versign is now asserting its power by announcing 
they want to charge $35 to every competitor who wants to register an 
expired name for their customer by getting on a Verisign controlled 
"waiting list". This is a sevenfold increase in fees for all small 
taxpaying registrars and appears to be blatantly contrary to agreements 
guaranteeing competitors $6 registrations. Many new competitors who have 
invested heavily in the secondary domain market would likely fail if 
Verisign succeeds in instituting the WLS.

SnapNames, which currently makes the most money off expiring names, would 
go out of business under this proposal and by far be its most vocal critic. 
However, Verisign has agreed to purchase their support by "licensing their 
technology". Similar technology could easily be adopted by Verisign and 
would function much better since Verisign controls all the data concerning 
expiring domains and the names themselves. This isnt rocket science - its 
just allocating an expired name from one registrant to the next in a 
database. Verisign merely needs SnapNames on their side so they are the 
biggest proponent of the service instead of being the biggest opponent 
which they would be naturally. SnapNames falsely professes to the public 
that the majority of registrars support the WLS, while we have only heard 
of one registrar supporter and dozens in opposition.

Verisign says the WLS is a way for them to save money on their technical 
systems yet they already get an estimated $180 million a year to run the 
database, competitors feel they don't make basic improvements to the 
current system, and they will still be running the current system in 
parallel for any domains that aren't purchase via the WLS and expire 
naturally. Plus their recent policy to restrict the amount of traffic 
coming in to their systems from other registrars seems to have solved the 
main issue of excessive load on the Registry. If the WLS would save them 
money on their systems then what's the logic to massively increasing 
mandatory fees?

As you see the government allowed the monopoly to charge $6 to competitors 
seeking to register names for their clients but Verisign is unilaterally 
trying to change it to $35 for a huge portion of these registrations. They 
also seek to control who is assigned all of these millions of expiring 
names while currently its strictly first come first served. In our opinion 
Verisign appears unable to compete on price and customer service in the 
re-registration and domain brokerage areas and therefore they exert 
monopoly influence to get their desired results. Since they control both 
their legacy Registrar, with tens of millions of renewals per year, and the 
central Registry, which seeks to dramatically increase competitors fees and 
control all expiring domains, competition is stifled by an enormous 
conflict of interest.

Even more alarming is that some competitors estimate that Verisign still 
hoards over a million expired domains with no legitimate claim. BuyDomains 
own research has uncovered at least hundreds of thousands that are long 
expired but not released to the market. Most have expired many months if 
not years ago by companies that are no longer in business or just don't 
want to pay for a yearly renewal. In fact they have not released any 
significant batches of expired names in the six weeks since they announced 
the WLS (usually large batches of the names they are not hoarding are 
released to the public weekly). By perpetuating the hoarding they prevent 
any competitor from registering one of these expired names for a new 
customer and simultaneously prevent a secondary market in these domains 
from taking root. All the while they try to push through the Waiting List 
Service and charge $35 instead of $6 for the names that should have been 
available to the public long ago according to existing contracts with 
regulating agencies. Competitor Register.com (Nasdaq:RCOM) is also hoarding 
substantial numbers of expired names thereby helping stifle free market 
activity themselves. The names Verisign hoards are often among the most 
valuable since they (NSI) controlled 100% of the market in the Internet's 
formative years when the first and best names were originally registered. 
Sample "hoarded" domains are found at the bottom of this document. A 
"Whois" lookup will show their long overdue expiration dates yet Verisign 
wont delete them.

With the hoarding problem addressed above and the mandatory $6 domain fees 
it is already quite difficult and expensive to operate in the domain 
marketplace. With the risk of the proposed $35 WLS fees and additional 
unfair rules being thrust upon the market there is an unacceptable business 
risk placed on competitors. This makes raising capital, hiring employees, 
and promoting competition even more difficult than it would be in a fair 
marketplace, especially given the decline in the technology sector and the 
September 11th economic fallout.

While this WLS has not yet been approved or rejected by ICANN we think that 
proactive government involvement is in order. Companies hoping to compete 
with NSI/Verisign have always suffered inequities in the marketplace and we 
believe fairness has to be forced upon Verisign or they will never practice 
fairly. In the interim many small competitors are likely to fail as a result.

Another sore spot with competitors is Verisign's habit of offering select 
partners "Promotional" domains. It is estimated that over a million domains 
have been given away free by the Verisign Registrar to their friends. 
Trying to follow the money trail shows us the market inequities and may 
raise Enron/Microsoft type concerns but on a much smaller scale.

While much of the below analysis on the effects of "promotional" domains is 
highly speculative it is the best we can do without extensive research and 
disclosure from Verisign.

The recipients of those promotions did not pay for those same registrations 
from Verisign competitors who were not on the friends list - thereby 
stifling the market. Customers often left preferred competitors in light of 
the below market registrations offered by Verisign's friends.

The Verisign Registrar probably paid the Verisign Registry the required $6 
per name, possibly grossing the Registry about $6 Million. Verisign 
probably passed $6 Million from one department to the next at no net loss 
but a competitor would have been drained by the entire $6 Million if trying 
to offer that same promotion. The competitors who already have a difficult 
time raising capital would have had an additional $6 Million expense above 
that of their much larger monopolistic competitor if they wanted to 
compete. As far as we know Verisign can continue to push this scheme on the 
marketplace up to any cost level.

Wall Street may have been told of approximately an additional one million 
registrations from the Registrar side while the Registry may have 
simultaneously recorded $6 Million in revenue. This ability to manipulate 
the marketplace cannot and could not be matched by competitors.

BuyDomains.com and most competitors think Verisgn's persistent 
anticompetitive efforts in the marketplace are a sham on all domain 
consumers and competitors. BuyDomains and dozens of other competitors are 
urging authorities to put a halt to what they consider to be outrageously 
anticompetitive behavior. Competitors want Verisign to release all expired 
domains immediately, to rescind its WLS proposal, and to cease offering 
"promotional" domains to business partners. We recommend that you contact 
relevant government representatives to attempt to protect your rights as 
domain consumers and domain registrars. The Department of Justice Antitrust 
Division and the FTC have the greatest responsibility to act. Also ICANN 
leadership and the DNSO need to act assertively in an effort to finally 
create an open fair marketplace.

Michael F. Mann
mike@buydomains.com
301-530-8040 fax: 301-530-9611

President, BuyDomains.com - The World's Leader in Virtual Real Estate. 
http://www.buydomains.com/
Executive Director, Grassroots.org - http://www.grassroots.org/


Sample Hoarded Domains and expire dates: (more available on request)
wholesalecatalog.net
bergmann.com	6/6/1998
legalknowledge.com	7/31/1998
charlie.org	7/31/1998
new-perspectives.com	9/12/1998
internet-channel.com	9/21/1998
iimages.com	10/17/1998
graphicmedia.com	12/20/1998
vectordesign.com	12/28/1998
air-web.com	1/6/1999
toyroom.net	1/6/1999
deckcare.com	1/8/1999
virtualinternational.com	1/26/1999
datatools.com	2/12/1999
city-web.net	3/4/1999
allianceservices.com	4/10/1999
topweb.net	4/25/1999
proflink.com	4/29/1999
inthegroove.com	5/15/1999
creativesoftware.com	5/22/1999
earthcom.net	6/8/1999
greatnet.com	6/9/1999
crazy-horse.com	6/14/1999
funvideo.com	6/14/1999
vegasmall.com	6/18/1999
zvz.com	4/28/2000
youridentity.com	4/15/2000
yourcomfort.com	4/21/2000
xrayequipment.com	7/19/2000
worldviews.net	3/22/2000
worldpercussion.com	4/9/2000
worldleadership.com	7/9/2000
worldbeds.com	5/2/2000
wmsl.com	9/16/2000
wintershop.com	12/15/2000
widenet.net	3/17/2000
wholesomefood.com	9/12/2000
wholesalemarkets.com	12/30/2000
whalenet.com	4/5/2000
websistemas.com	5/3/2000
webgoal.com	9/11/2000
webdummies.com	5/4/2000
webchristmas.com	6/11/2000
webcompras.com	5/17/2000
webbedfeet.com	3/15/2000
walldecor.com	11/20/2000
vorname.com	9/26/2000
visualscape.com	5/29/2000
viptalk.com	8/8/2000
vintageshops.com	10/16/2000
videofantasy.com	8/15/2000
ventureinternational.com	5/1/2000
vegetableshortening.com	8/18/2000
valuation.org	12/30/2000
usabrands.com	10/15/2000
weapons.org	1/2/2001
animalhusbandry.com	1/2/2001
cuanto.com	1/2/2001
liquidhelium.com	1/2/2001
liquidhydrogen.com	1/2/2001
htmlserver.com	1/3/2001
foodhandling.com	1/4/2001
foodmanufacturer.com	1/4/2001
foodpreparation.com	1/4/2001
deductive.com	1/4/2001
salenetwork.com	1/5/2001
bankboard.com	1/5/2001
linuxsupportline.com	1/5/2001
surfacecoatings.com	1/6/2001
processconsulting.com	1/7/2001
aircraftcertification.com	1/8/2001
searchware.net	1/8/2001
siteresources.com	1/9/2001
hostingpro.net	1/9/2001
discovergolf.com	1/9/2001
accesstech.net	1/11/2001
flatspeakers.com	1/11/2001
studentinvestor.com	1/11/2001
industryline.com	1/12/2001
composed.com	1/12/2001
wowdesigns.com	1/12/2001
greecevacations.com	1/13/2001
quicknews.net	1/15/2001
dreampalace.com	1/15/2001
internetapparel.com	1/15/2001
worldwideshop.com	1/16/2001
hometechsupport.com	1/16/2001
preciousthing.com	1/16/2001
worldwideshopping.com	1/16/2001


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