updated 3/29/2005 9:23:57 AM ET 2005-03-29T14:23:57

An independent advisory firm recommended Monday that VeriSign Inc. be given another six years to run the Internet's third most popular domain name suffix.

If approved, renewal of a contract to serve as master-keeper of ".net" directories would generate about $20 million annually for VeriSign, which already makes more than $200 million a year managing ".com."  Owners of ".net" domain names could see lower prices when they renew.

Though most other Internet users should not see any immediate changes, the company that runs the directories ultimately influences whether people can send e-mail and reach the Web sites they are seeking.  Technical failures in the directories, for instance, could leave a large portion of the Internet inaccessible because computers can't find one another.

The domain name operator, known as the registry, also has the technical ability — though some question whether it has the legal authority — to make sweeping policy changes.  In 2003, VeriSign briefly redirected Web surfers who mistype ".com" and ".net" addresses to VeriSign's own search engine, breaking some spam-filtering programs and other applications in the process.

VeriSign suspended that program under pressure and has since sued the Internet's key oversight body, the Internet Corporation for Assigned Names and Numbers, accusing it of impeding efforts to offer new, moneymaking services.

ICANN hired an outside firm, Telcordia Technologies Inc., to evaluate the ".net" applications to avoid any appearance of conflicts given the pending lawsuit.

In its application, the Mountain View, Calif.-based VeriSign stressed stability and experience, while its rivals, all formally based outside the United States, played up their international appeal and the need for competition.

VeriSign now has about two weeks to negotiate a new contract with ICANN staff, after which ICANN's board and the U.S. government must sign off on the renewal. ICANN will concurrently hold a public comment period.

Any renewal would take effect July 1.

Other possibilities
If VeriSign and ICANN cannot finalize a deal, ICANN will begin talks with the second-ranked applicant, Sentan Registry Services Inc., a partnership between the operators of ".biz" and Japan's ".jp."

The third-ranked bidder is Afilias Ltd., operator of ".info," followed by DENIC, operator of Germany's ".de," and Core++, a consortium that includes Spanish telecommunications company Telefonica.

VeriSign took over ".net" in 2000 when it bought Network Solutions Inc., which had been running the domain name since 1993.  VeriSign initially had a contract through 2007, but agreed to an early rebidding in exchange for a more lucrative extension for ".com," the most popular suffix with about 35.5 million names.

There are about 5.5 million ".net" names; Germany's ".de" is the only other suffix with more registered names — more than 8 million.

VeriSign currently gets $6 annually for each ".com" and ".net," though it promised to settle for $4.25 in the new contract, 75 cents of which would go to ICANN.  The other bidders had also proposed lower fees.  Though these involve payments by separate companies that handle domain name registrations, they could pass on savings to domain name holders.

The U.S. government, which funded much of the Internet's early development, selected ICANN in 1998 to oversee Internet addressing policies.

There are currently 248 domain name suffixes, with ".eu" about to be added for the European Union.  ICANN staff also recently completed agreements on two more, ".jobs" and ".travel," and they await board approval.  ICANN also recently added ".tl" for Timor-Leste, the formal name for East Timor, which gained independence in 2002.

Copyright 2005 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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