The creeping economization of internet policy

Observations from the 25. Icann meeting in wellington

When paul twomey, for four years ceo of the "internet corporation for assigned names and numbers" (icann), talks about the future, he recently starts presenting numbers. However, twomey is not so much concerned with the number of new top level domains licensed by icann or the new anycast root servers, but with the volume of the market that icann manages. The domain name market in the narrower sense is now worth more than a billion dollars. Adding all the current and future services offered by icann-affiliated registries and registrars, this market would grow to about ten billion euros by 2010. Compared to the bureaucratic administrative burden of similar global markets, said twomey, icann, with its nearly 50 employees and a budget of 20 million us dollars, represents an almost sensationally favorable cost-benefit ratio.

Twomey’s wink at the economic fencepost is, of course, aimed primarily at governments, to whom he wants to say that their policies on "internet governance" the government should make the internet more market-oriented, as the economic performance of the national e-economy depends on the functioning of the domain name system. But it also makes clear that the economic component will increasingly play a leading role in icann’s future political decisions.

The giant gets rougher

The most hotly debated decision in wellington also concerned a political decision that was primarily about money: the new contract between icann and verisign for the continuation of the registry for the top level domain .Com. Was approved by the icann board of directors in early march 2006 by a vote of 9 to 5 with one abstention. It had triggered a wave of protest among numerous icann constituuencies – from registrars to users.

The contract that .The contract, which gives verisign a de facto perpetual license to the internet’s internet service provider, com, and allows a seven percent annual price increase, cements a monopoly for years to come for the ever-expanding network giant, critics argued, pointing out that icann was created to promote competition in this new market. Instead, straton sclavos, the clever ceo of verisign, is becoming more and more a kind of bill gates of the internet. After all, verisign not only controls the domain name market, as the "trust company" verisign is a leader in internet security, one of the most dynamic and lucrative fields of the new generation of networks.

The fire fanned by verisign’s opponents soon burned out at the wellington meeting. So really convince that an alternative operator for .Com was better for the global internet community, the arguments could not be. While the criticism that icann is creating a monopoly – which, incidentally, funds the lion’s share of icann’s budget – and undermining competition is more than justified, it ran a bit aground with regard to the .Com-contract a little bit into the void. Who would have been able to easily take over the 50 million registrants under com from one day to the next? .Com from one day to the next?

The critics, who now even threatened to take the matter to a us court, would have preferred to have been more careful with the reallocation of the .Net registry – which also has over seven million registrants – a year ago. At that time there was a tender. Five applicants came forward and all received high marks from the evaluators. But in the end verisign won. Had one .Net z.B. The competitors denic – just under ten million registered .De name – or afilias – just under three million under .Info and again about five million under .Org, where afilias does the technical backup – at least a competitor would have been created, which still would not have been able to compete directly with verisign, but at least would have been able to carry the label of an "global players" had been able to claim.

At that time, the outcry of today’s critics was limited and icann’s governmental advisory committee (gac) was speechless, although it is actually the responsibility of governments to ensure fair competition in new markets. The argument "competition" was weighed by icann’s board of directors at the time against the risk that a transfer of millions of .Net addresses (the vast majority of which are in the u.S.) to the stability and security of the internet "stability and security of the internet" security of the internet. The us government liked it, and the european union was politely silent on the matter. Thus, in a dynamically developing market of billions of dollars, a rather distorted competitive situation has arisen, where a giant is surrounded by dwarfs. It will take some time before a competitor will be able to make a serious pursuit.

Europe or china: who will be the number 1 runner-up??

Whether such a competitor will come from europe is rather doubtful. The euphoria generated in the public these days about the "success story" of .Eu – since the beginning of april 2006 it has finally been possible to register domains under this tld and things are indeed moving forward now – somewhat shamefully hides the fact that the europeans slept through the development for years and then pushed ahead with the introduction of .Eu to an agonizing and time-consuming bureaucratic process has led to the fact that eurid, the new .Eu registry, is now going on the hunt with a huge backlog. In 1997, the then eu commissioner martin bangemann had not listened to his advisor christopher wilkinson, who instead of a "handshake delegation" of .Eu a la jon postel a "communication from the european commission to the european council and the european parliament" recommended to "legal protection", a .Eu registry might be a close competitor of verisign today. But eurid will need a lot of patience to reach the level of the german denic.

The real music of the future in this market plays so and so in asia. And here there will possibly be even more shrill sounds than with the .Net and .Com re-delegations. The ".Com topic" was quickly dealt with in wellington, the "idn topic" was knocking on icann’s door for the first time as an economic ie. So far, the so-called "internationalized domain names" – d.H. The tld endings not based on the ascii code – have been discussed primarily under the aspect of feasibility as a technical problem or under that of language diversity as a political problem. In wellington, the economic dimension became more visible than before, which in turn has its specific global political and strategic implications.

The starting point of the new discussion is the chinese government’s test attempt, extended since march 1, 2006, to allow domain name registrations in the tlds under .Cn, .Com and .Net with chinese characters. The zone files with the chinese characters for the three tlds are hosted in a chinese root server and their publication has been authorized by the chinese ministry of information industry (mii) (clash in the internet?). The outcry of the internet community that china was going to split the internet was, however, initially unfounded, because in the test the chinese server, as soon as it receives a request containing the chinese .Com characters, the chinese server converts them into an ascii address under .Cn. This does not create an "alternative internet root", but the nuclei of an "extended internet roots" visible.

So far all .Com names are managed by verisign. Versign also manages the master copy of the root server system. The publication of the .Com root zone file with the ascii characters in turn authorizes the u.S. Department of commerce. The chinese representatives in wellington now made it quite clear that, while they do not challenge icann’s and the u.S. Department of commerce’s sovereignty over the internet root, verisign would be committing a fallacy if it were to ame automatically that all .Com registrations in the chinese language, as proposed in the dname protocol. The chinese want the .Com registrations with chinese characters under their own control.

Although there are currently just one million domain name registrants in china (in both latin ascii and chinese characters), with 115 million chinese internet users at present, it is only a matter of time before this number also explodes. Of the domain names registered in china to date, 50 percent are registered under .Cn and 40 percent under .Com. The rest is distributed among .Org, .Net, .Hk (hong kong) and .Mo (macau). With just over 100 million chinese domain names registered – a not unrealistic number by 2010 – that was just under 50 million .Com names, as many as verisign currently manages in total in ascii code under .Com. If dname became the icann sanctioned protocol, this billion dollar business would automatically fall to verisign. However, such a miraculous increase of money will probably not take place so easily.

So no sooner have the wsis storms passed than icann is headed for a far more dramatic attrition test. To what extent this future poker game will influence the process of "expanded cooperation" (enhanced cooperation) and whether this explosive question will become the topic of the new internet governance forum (igf) (a virtual mecca for netizens?), is difficult to forecast at the moment.

However, anyone who had expected that after the "tunis deal" between the u.S. And the eu was out of the air "internet governance controversy" (pea numbers after the cyber battle), had done the math without the chinese host. And this does not even address the question of who then authorized the publication of the chinese variant of the .Com root zone file: the us department of commerce (doc) or the beijing ministry of information industry (mii)? In any case, the time bomb has already started ticking.