Politicized domain-name war threatens e-commerce growth
By Daniel W. Gottlieb -- Purchasing, 9/2/1999
Politicization of Internet system management was probably inevitable given the high commercial stakes involved. Beneath the dust of battle is a struggle involving commercial and political forces, spelling bad news for rapid e-commerce growth. The same thing has been occurring in telecommunications deregulation over the past decade and a half. In the beginning, a regulated monopoly, AT&T with its local telephone subsidiaries, exercised a virtual monopoly over telephone service, regulated at the federal and state levels. Breaking AT&T's old grip on long-distance service has been fairly successful; breaking the hold of its successors--the regional bells--on local telco competition has been agonizingly slow.Now look at the Internet. The Clinton Administration decided a little over two years ago to privatize Internet management, turning the task over to an internationally representative nonprofit body. At the time, the Internet was run by a bipolar monopoly--one a government contractor, Network Solutions Inc. (NSI), running the domain name system, and another managing routers (the network system that assures that when you click on a URL, you get to the right site).
Opening the registration of domain names would seem to be a whole lot simpler than opening the door for telephone companies to enter dominant Bells' territories. The new overseer of the Internet, the Internet Corporation for Assigned Names and Numbers (ICANN) optimistically thought the same thing. But as ICANN is finding out, ICANN can't--at least not by fiat. Network Solutions, Congress, and the Commerce Department (which oversees Internet privatization) are now whipsawing the company.
Network Solutions launched a lobbying campaign in Congress when it felt ICANN was becoming too high-handed, allegedly encouraging the Justice Department to revive an antitrust investigation into the company. One bone of contention between ICANN and NSI is whether NSI must keep its domain name list or Internet telephone book database open. Without the open database, competing companies would have to set up their own directory databases. That would slow rather than speed access, making the "World Wide Wait" even longer than it is today and slowing Internet growth.
House Commerce Committee Chairman Thomas Bliley, already a critic of ICANN, fired off letters to the Commerce Department about ICANN's proposed self-financing scheme (levying a dollar surcharge for each name registration), noting that congress had passed a moratorium on Internet taxation. ICANN immediately backed off the idea. Bliley also asked for details surrounding contacts between ICANN and the Justice Department regarding reported pressure on NSI. Meanwhile, a number of House Democrats, at a hearing before one of Bliley's subcommittees, jumped on Network Solutions Inc. (NSI) for allegedly dragging its feet in implementing the Clinton Administration's scheme for introducing competition.
As a political issue, the Internet is already surfacing in 2000 congressional and presidential campaigns, with both sides claiming the high ground of being pro-e-commerce and Internet. Both Texas Governor George Bush and Vice President Al Gore are courting IT industry support.
As Don Heath, president of the Internet Society, a broad coalition of Internet users, puts it: "It's a ghastly scene." If the various groups represented on ICANN can't regulate domain registration, then some international body such as the World Trade Organization may have to, Heath says. What's happening, he says, will slow down Internet growth and e-commerce. Big issues further down the road: privacy, authentication, and encryption. Bottom line is that e-commerce may fall far short of its potential in the next few years as these issues are fought out in the courts and halls of Congress.
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