One of the central players in the complex worldwide battle over administering Internet domain names - Network Solutions Inc. - says the US Justice Department has launched an antitrust investigation of its operations. The inquiry was disclosed in the company's IPO filing last week with the Securities and Exchange Commission.
Network Solutions holds an exclusive contract with the National Science Foundation to register names in the .com, .net., .edu, .org, .gov, and .mil top-level domains through March 1998. The registration charge is US$100, with a $50 annual maintenance fee. The company, which has registered 1.2 million names since it got the contract in 1993, anticipates revenue of $200 million in 1999.
The Justice Department's letter to Network Solutions, which the company says it received on 27 June, is a civil investigative demand to determine whether the company is violating antitrust laws established under the Sherman Act. The inquiry came to light after Network Solutions filed for an initial public offering with the Securities and Exchange Commission on Thursday.
"It's not clear why they are investigating us, but we intend to cooperate with them fully," said Christopher Clough, spokesman for Network Solutions. He would not comment further because of the IPO-filing "quiet period" mandated by the SEC.
The Justice Department declined to give a detailed response about the investigation. "All I can say is that we're looking at Internet address registration under fair practice laws," said spokeswoman Gina Talamona. She would not comment further.
The investigation comes amid international turmoil over how to expand and administer the domain-name space. An exclusive global task force on the issue, the International Ad Hoc Committee, has set a plan in motion to create seven new top-level domains and create an unlimited number of new registries. The proposed system has won support from some of the largest telecommunications firms in North America, Europe, and Asia, as well as independent Internet authorities, but has run into resistance from both Network Solutions and smaller companies. Seeing their business potential threatened, they have challenged the decision-making power of the ad hoc group.
A US interagency task force is exploring ways to make the lucrative business of issuing domain names more competitive. The Commerce Department last week began seeking public comment on how to address domain-name issues.
