ICANN and VERISIGN sued for price fixing by wadnd.com

[DrDomains]

I'm proud to be a board member of WADND and am thrilled to share this tidbit with you guys. It has big implications for all domainers!
Respectfully,
Jeff Reynolds


ICANN AND VERISIGN SUED FOR PRICE FIXING AND MONOPOLIZING THE “.COM” DOMAIN NAME MARKET

San Jose, California:
ICANN (the corporation that maintains the database for all internet domain names) and VeriSign (ICANN’s subcontractor for the “.com” and “.net” domain names) are named defendants in a law suit filed in federal court in San Jose, California, today, alleging that the two have engaged in antitrust activities, including conspiracy, monopolization, illegal price fixing and monopolizing “.com” and “.net” domain name markets. The suit alleges that the two are on the verge of entering “an unlawful agreement [that] gives VeriSign a permanent monopoly over the all ‘.com’ and ‘.net’ internet domain name registrations.”

“This agreement would permanently fix the price of registering any ‘.com’ or ‘.net’ domain name far above what a free market would otherwise bear,” said Patrick Cathcart of Cathcart, Collins & Kneafsey LLP who filed the suit.

“It also guarantees annual price increase at double the rate of inflation. There is no legitimate reason for these price increases. ICANN and VeriSign are trying to take advantage of the lack of government oversight and line their pockets at the expense of consumers,” said Cathcart.

ICANN (or the Internet Corporation for Assigned Names and Numbers) is the California Corporation that maintains the database of all internet domain names (such as www.amazon.com). The ICANN/VeriSign contract, known as the 2005 Registry Agreement would extend VeriSign’s control of the “.com” and “.net” portions of the internet database.

Complaint here: http://wadnd.com/Complaint(ver4).pdf

[Rick Schwartz]

Domainers are DONE getting kicked around. A new day has dawned as WADND.COM has filed this lawsuit in behalf of its members and all domainers.

Find a copy of the lawsuit filed today here:

http://wadnd.com/Complaint(ver4).pdf

[mole]

:-o

[JMJ]

Glad to see it Rick. A cyber high five goes out to ya. I'm sure many more will follow.

[Dave Zan]

Well, good luck to you and the others, Rick. At least something's being done.

[xtc]

Great news! Best of luck Rick!

[GeorgeK]

There are obvious factual errors in the Statement of Claim with regards to .net. See:

http://www.icann.org/tlds/agreements...nt-01jul05.pdf

Section 7.3, and compare with paragraph 41 of the Statement of Claim. Sloppy work, that ICANN and VeriSign's lawyers will have a field day with.

[xtc]

Good find George, I hope they're somehow able to amend the complaint and/or strike out paragraph 41.


Paragraph 41 of the Complaint:
41. The 2005 Registry Agreement fundamentally changes ICANN’s
oversight relationship with VeriSign. The 2005 Registry Agreement fixes the
maximum price for .com and .net domain name registration at $6 through December
31, 2006 and thereafter allows VeriSign to raise the price of .com and .net
registration 7% annually going forward. In the 2005 Registry Agreement, neither
ICANN nor VeriSign even purport to promote robust competition or to not
unreasonably restrain competition.

Section 7.3 - 2005 Registry Agreement:
Section 7.3 Pricing for Domain Name Registrations and Registry Services.
(a) Prices for Registry Services. From 1 July 2005 through 31 December 2006,
the price to ICANN-accredited registrars for new and renewal domain name
registrations and for transferring a domain name registration from one ICANNaccredited
registrar to another, shall not exceed US$4.25 (consisting of a
US$3.50 service fee and a US$0.75 ICANN fee). On 1 January 2007, the
controls on Registry Operator’s pricing set forth in this Agreement shall be
eliminated, provided that the same price shall be charged to all registrars with
respect to each annual increment of a new or renewal domain name registration,
and for transferring a domain name registration from one ICANN-accredited
registrar to another (provided that volume discounts and marketing support and
incentive programs may be made if the same opportunities to qualify for those
discounts and marketing support and incentive programs is available to all
ICANN-accredited registrars).
(b) Adjustments to Pricing for Domain Name Registrations. Registry Operator
shall provide no less than six months prior notice in advance of any price
increase for domain name registrations and shall continue to offer domain name
registrations for periods of up to ten years.

[jdk]

Interesting read. Nice find on the error.

[GeorgeK]

Fortunately, the US Department of Justice appears to already be monitoring the situation. See:

http://forum.icann.org/lists/settlem.../msg00021.html

They, or registrars, would likely be more appropriate plaintiffs in any action against VeriSign.

[ShaunP]

At least wadnd.com is putting money where their mouth is and trying to actaually do something about the Icann/Verisign situation, and not just pay lip service to the situation like most.

Shaun

[jelly]

What happens next?

[GeorgeK]

The Plaintiff might have more credibility and legitimacy had it been a true non-profit organization, open to public membership, instead of the lip service above of acting for "all domainers".

According to the Florida Division of Corporations:

http://www.sunbiz.org/scripts/cordet...TIONDOMAIN&r5=

"WORLD ASSOCIATION OF DOMAIN NAME DEVELOPERS, INC." is a For-Profit corporation. This is evident in the "2005 For Profit Corporation Annual Report". One can only speculate who the shareholders are....

Fortunately, there will almost certainly be other lawsuits that will check ICANN and VeriSign's actions, and at the appropriate time, should the ICANN Board proceed to ignore the community feedback on this issue.

[As a simple counter-example, compare with the Internet Society, http://www.isoc.org/news/1.shtml "The Internet Society (ISOC) is a non-profit, non-governmental membership organization focused exclusively on Internet issues."]

[Dave Zan]

Took you a while to reply, George. :-D

[GeorgeK]

Took you a while to reply, George. :-D

I couldn't skip the finale of "Prison Break".

[dodo1]

I merged the two threads on this topic into this one thread.

[GeorgeK]

CFIT, "a not for profit Delaware corporation based in Washington, D.C" has also filed suit:

http://www.cfit.info/legal.html

[Rick Schwartz]

We are working very closely with CFIT and there are some things going on behind the scenes that I am not at liberty to discuss at the moment. Both lawsuits being filed on the same day may not be just a coincidence. :-D

WADND.com has many reasons for not filing as a non profit organization. That said, we make no profits. We simply spend the money that is collected for what the board votes on.

[GeorgeK]

Perhaps WADND might want to update its offical Directors list. According to:

http://www.sunbiz.org/scripts/cordet...TIONDOMAIN&r5=

http://www.sunbiz.org/COR/2005/0106/30262083.tif

there are only 2 directors. But, WADND.com claims something entirely different. The second link was filed after (on January 6, 2005)

"RICK SCHWARTZ
HOWARD NEU
MIKE FIOL
MARCIA LYNN WALKER
STEVE STOESER
JEFF REYNOLDS
DAN WARNER
ALAN REID (BUCKO)
RICHARD LAU"

were supposedly elected Board Members on October 23, 2004. Of course, they could just be make-believe board members as opposed to real ones.

Any real director might want to cover their butt, by getting Directors and Officers Liability Insurance, e.g.

http://www.boltonco.com/boltonco/hot...rDirectors.asp

[Rick Schwartz]

were supposedly elected Board Members on October 23, 2004. Of course, they could just be make-believe board members as opposed to real ones.

3 things.

The list you cite was last years Board.

This years board was elected by written ballot right at TRAFFIC 2005 just a few weeks ago.

The board voted UNANIMOUSLY to file this lawsuit. So you completely misrepresent things for your personal agenda.

Finally, your "Vendetta" against me is showing again. :-D

Only looking for things that don't really matter.

What we are doing is a GREAT thing for ALL domain holders and only YOU can't see that. Not surprising given your past antics. Just par for the course and everyone I know predicted it.

Why not commend us for doing something concrete instead of a bunch of lipservice? The suit is already in papers all over the world as Reuters picked it up this morning.