Is Network Solutions next on the Department of Justice's antitrust hit list? The Justice Department this week rekindled an investigation to determine if Network Solutions has violated US antitrust law by claiming sole ownership of a database of Internet names and addresses.
Legal observers, competing domain-name registrars, and a former Justice Department official see several possible outcomes from the new investigation, but few predict that Network Solutions will lose its favored status.
The US government granted Network Solutions the authority to assign Internet domains. The company assembled the applicants' contact information into the Whois database, which became the standard domain-name utility when it went online in 1993.
"I think it may be much ado about nothing -- but I'm not sure," said attorney Sally Abel, chairwoman of the trademark group at Fenwick & West.
Abel believes neither the Internet Corporation for Assigned Names and Numbers nor the US government has the political will to remove .com. or .net from Network Solutions' control as a registry. ICANN was formed to carry out a government-ordered transition to competition in the domain-name business.
"If you drill down, you'll find certain interests that are in powerful positions to discourage the government or anyone from acting in a way that is adverse to the interests of NSI [Network Solutions Inc.]," Abel said.
She is not alone in her opinion.
"My prediction is that this will blow over, and that perhaps there might be some compromise," said Rob Phillips of Arnold, White & Durkee, an intellectual property law firm doing work in the domain area. "But I don't think we're going to see years of litigation over this."
Former senior Justice Department official Robert Hauberg said the DOJ will be looking for behavior pertaining to the domain-name database to see if the company has intentionally created barriers to competition.
"They're trying in economic terms to determine whether there are any impenetrable barriers created by NSI."
Gina Talamona, spokeswoman for the Justice Department would only reiterate an earlier statement that "the antitrust division is looking at the possibility of anti-competitive practices in the Internet address registration industry." She wouldn't confirm that the division is specifically investigating Network Solutions.
ICANN legal counsel Joe Sims said it was too soon for his organization to comment on the investigation.
But NSI's critics and would-be competitors don't mince any words, claiming the company has been moving, altering, and otherwise messing with a database they see as public property. Unfettered access to that property is critical to their business, they say.
"It's an anti-competitive thing they've done and clearly they aren't entitled to do it," said Jeff Field, president and CEO of ICANN-accredited registrar NameSecure.com.
Abel says a spate of actions by NSI in recent months have altered the location and availability of the database and its information. The changes clearly benefit Network Solutions' plan to compete as a registrar -- unfair practice for a company in NSI's position, she said.
Recent changes from Network Solutions include removing the creation date from domains in the Whois database, removing the entire database for a short period of time, and "making noises about needing to restrict access to that database under the guise of needing to protect against domain-name harvesting," said Abel.
"NSI has done an excellent job setting itself up as the registry," she said. "But the more arrogant NSI becomes, the more attention it attracts from the Justice Department."
Robert Raisch, who was active in initial commercialization of the domain-name system and now an Internet business consultant, said if the investigation is successful the Whois database will be deemed a public resource.
"There are a number of businesses who require the information in Whois in order to be able to compete," he said. But it's no longer possible to download that info en masse, he complains. "You have to go and probe Whois. It's managed by NSI and now it's designed to put a chokehold on companies that wish to harvest that information."
The company contends the database is its own property to do with is as it wishes. It vehemently rejects the description of its agreement with the government as a contract that somehow makes the Whois database government property.
"We have a cooperative agreement, we do not have a contract," said Chris Clough, Network Solutions vice president of corporate communications. Cooperative agreements make the database the property of the "awardee" of the cooperative agreement, he said.
Still, as Network Solutions acknowledged in recent SEC filings, the Department of Commerce, which oversees the agreement between NSI and the government, has expressed concern about the company's consolidation of the once separate Whois database into its own commercial site.
Commerce Department officials did not return calls.
Phillips said NSI has a legitimate interest in maintaining the propriety of its database, "particularly [since] they have spent a tremendous amount of time and resources creating it and protecting it."
Abel said NSI is betting heavily on its long-term right to own the data.
"Ultimately it will have to find a court that agrees with it that it owns the database," she said. "My understanding is that NSI is obligated to turn over the database at the end of its contract."
The company denies that.
If the Justice Department files suit, Hauberg said the ongoing Microsoft antitrust case points to the possible outcome. One possibility is a compulsory licensing process imposed on Network Solutions.
But Abel, Phillips, and others don't see such changes as likely.
"Obviously it's difficult to predict exactly how this is going to play out," said Phillips. "But I would not expect this to turn into a full-blown investigation."
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