[ga] Five Questions with David Hernand, New.net CEO

[Bruce James <bmjames@swbell.net>]

Subject: Five Questions with David Hernand, New.net CEO

 http://www.business2.com/technology/2001/06/dhernand.htm

Five Questions with David Hernand


New.net CEO weighs in on the tussle between his company and ICANN over who
controls the expansion of the Internet.

Jim Welte 06/29/2001

Since early 2001, the Internet Corporation for Assigned Numbers and Names
(ICANN) has had a major thorn in its side. That thorn, domain name registry
New.net, has circumvented ICANN's process for naming new domain suffixes to
expand the Internet beyond the .com, .net and .org domains that have been
used to date. New.net has gone directly to Internet service providers (ISPs)
and made deals to allow users to access new domains that New.net sells, and
has drawn a heap of controversy its way by doing so. Business 2.0 Online
visits with New.net CEO David Hernand to get his take on the debate
surrounding the expansion of Internet domains.

In your estimation, why is ICANN inherently incapable of meeting the market'
s demand for new top-level domain names?

Because of the nature of the ICANN beast, in that it is a consensus-building
organization that was set up to be a technical standards-setting body to
make technical decisions, but what it is now trying to do is act as a
super-government and make political, economic and socio-economic decisions.
For example, when it last considered introducing new names, several
applicants were applying for a .kids domain name. And ICANN decided that it
was controversial to adopt the .kids domain because of the free speech
considerations and the limitations in ensuring that those sites contain
kid-friendly content. That is not a technical decision. That is purely a
political decision. So you have this body that is trying to be
representative to everyone, but the people that are most vocal don't
represent everyone but only a well-funded constituency that is not in favor
of expansion of the name space. And you have a body that is not responsive
to the market.

Your business model is seemingly predicated on the idea that ICANN doesn't
have its act together and hasn't met the demand that's out there. What
happens if they do get their act together? What happens if they smooth out
the process and allow more TLDs to be rolled out this year?

No one thinks it will happen this year. Even ICANN says it will not happen
this year. Our objective from the beginning was to go out and populate
domain names and get them widely accepted and used. And we will create a
large enough body of users so that ICANN, if it chose to release a
conflicting name, would be the interloper and they would be choosing to
create confusion in the market from what's already been used.

Also, we continue to try and pork within the ICANN process. We show up to
the ICANN meetings and we're very involved in the discussion and we welcome
opportunities to be involved in the process and to have our names recognized
and become the official registry for those names. We're just not going to
wait for the political process to work, we're going to demonstrate the need.

There are some similarities between what we're trying to do and what
Goto.com did. They tried to use a market-based approach for search engines,
and at the time it was very controversial. There was a lot of bad press
about how anyone could do something so crass as to have a market-based
approach for search, which is supposed to be holistically pure, and people
didn't realize that search engines were being paid off for years. And now it
's a known fact and Goto has done very well and everyone is using a
pay-for-performance model. Similarly, we are taking a market-based approach
and we get some negative press because of it.

So if ICANN does start rolling out domains that you have been selling, it
will essentially come down to a public relations duel to convince the market
that the other is interloping and creating confusion in the marketplace?

I think the battle will take place in a slightly different way. We will be
in there applying to be a registry for our names because we've demonstrated
our ability to run a registry. We've got thousands of users with live
websites and if ICANN chooses to do something else and create confusion, I
don't think it will be New.net that will need to be the party out there
crying foul. It will be Internet users who are making use of these names, so
the PR battle won't need to be waged by us. It will be between ICANN and the
hundreds of thousands out there that feel like their names are being taken
away, which is far more powerful than simply one company in Pasadena.

What has your involvement in the ICANN process been to date? Have you
established a relationship with Vint Cerf and other board members? How about
Karl Auerbach, widely regarded as the contrarian of the bunch?

Going to an ICANN meeting is like going to a UN meeting, only slightly more
dysfunctional. We go to all of the different constituency meetings at ICANN,
and we went to the last one to answer questions and participate in the
discussion. As far as the ICANN board, we don't have a close relationship
with Vint Cerf or anything, we have spoken to many of the board members, and
some board members support what we're doing, and others are quite critical
of what we're doing. Vint Cerf has never been very vocal in the press about
opposing us. He has described us as a clever trick, and he probably shares
some of the concern that others do about the potential for conflict in the
future. I'm sure he would like us to wait and work within the ICANN process,
but surprisingly, he has been much more receptive to us when we've been at
the podium making comments to the board. He has never treated us in a way
that shows any kind of disrespect. We've been very impressed with his
even-handedness. The more negative comments come from other boards members
and the new CEO of ICANN, who has recognized that we are a threat to them,
and so he has stepped up the rhetoric.

Karl is the one person on the board that was elected through a democratic
process, so you might say that he represents the little guy, and yes, he
tends to be quite a contrarian and a dissident. He does support what we're
doing, although he doesn't officially come out and say that. Karl is an
active proponent of increasing the number of top-level domains and believes
that this whole issue of conflicts is really overblown, that there are
technology solutions to use in dealing with conflicts.

There are several ways this struggle could play out in the next year to two
years. In your ideal scenario, how does this play out, with ICANN and
New.net acting in a somewhat harmonious way or at odds with each other?

If ICANN returns to its roots as a technical standards-setting body and
focuses on that role, then there will be a future where New.net exists with
its top-level domains as a registry selling names, many of them recognized
on the A root server and have worldwide appeal, but some won't. And there
will be other companies doing the same thing. If ICANN continues its current
path of trying to play the uber-government of the Internet and makes social
policy decisions, I think ICANN will lose that battle, be overtaken by
market forces, and become completely marginalized and perhaps implode.

Jim Welte is a reporter for Business2.0 Online.


/Bruce








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