Falling Prey to the VeriSign Beast

(This column was originally published by NewsFactor Network, June 25, 2002.)

Kirk L. Kroeker

Just a few years ago, Network Solutions -- now owned by VeriSign -- sat in a position of monopolistic power, governing the registry for the com/net/org domain space. Consumer horror stories emerging from around the globe seemed to be the norm rather than the exception for those doing business with the company.

But consumers could do nothing about Network Solutions' anticonsumer business practices because of its 1994 U.S. government contract, which gave Network Solutions complete proprietorship over the com/net/org registry.

For many years, the company was the only option for those wanting to register a com/net/org domain. However, about three years ago, the U.S. government -- through domain governance body ICANN -- forced Network Solutions to open the domain space to competing registrars.

But the emergence of competing registrars did not stop Network Solutions from continuing its anticonsumer practices. Network Solutions -- I'll call the company VeriSign from here on because it was at about this time that VeriSign acquired Network Solutions -- has become known for shoddy business practices, incompetent tech support and overpriced services that capitalize on the company's former monopoly.

Threatened with losing business to burgeoning and very popular alternate registrars -- and there are plenty of reports suggesting that VeriSign will soon lose its dominant market share -- VeriSign arguably has gotten worse rather than better when it comes to dealing with consumers.

Scare Tactics

VeriSign is well known for domain slamming -- a process in which a registrar sends out fake domain renewal notices to the customers of competing registrars, deceptively urging them to renew their domains through the slamming registrar or risk losing them altogether.

What many of these customers did not realize is that not only did they not need to renew through VeriSign, since their own registrars could handle renewals, but that once they sent back these fake renewal notices, VeriSign actually would transfer their domains away from their current registrars.

The renewal deadlines on these slamming scares did not coincide with the actual expiration dates of the domains themselves. But this detail did not prevent many confused domain owners from paying VeriSign's completely unnecessary US$29 renewal fee -- especially considering that, by and large, most of these slammed domain holders had been paying far less than $29 per year through their own registrars.

This slam tactic worked well enough to get VeriSign itself slammed -- with several lawsuits from competing registrars. And the courts finally stepped in to do something about it, recently ordering VeriSign to stop.

Politics of Squatting

About two years ago, VeriSign acquired GreatDomains -- one of the largest domain auction houses -- in order to auction off expired domains without letting those domains lapse back into the general unregistered pool. Because VeriSign had a complete com/net/org monopoly prior to 2000, the company had millions of domains in its registry that it would not have had if consumers had a choice.

Instead of letting those expired domains lapse back into the general unregistered pool -- a practice that would have been consistent with ICANN's mandate against domain hoarding -- VeriSign listed them on the GreatDomains site to earn auction fees.

After much consumer complaint, VeriSign clarified its position, stating that its policy is to auction only those domains that customers have freshly registered and not paid for.

Regardless of whether VeriSign acted deceptively in this case, no other registrar, save perhaps Register.com, would ever consider doing this because of the pure anger it would generate on the part of people seeking to register unused domains upon their expiration.

Working the Domain

Those who have worked with domain names -- modifying nameservers, executing ownership transfers or even updating admin contacts across hundreds of domains -- know that VeriSign defines inefficiency in a world that loves automation.

If you own a domain name registered through VeriSign and you want to sell that domain to somebody else or put it into a different company name, you have to execute an ownership transfer.

If you want to do it the slow way, VeriSign takes roughly a week to complete the modification -- plus, you'll have to pay a $15 fee. If you want to expedite the ownership transfer, you can pay VeriSign's $199 "priority" fee and the company will do it -- get this -- in one or two days.

This might come as news to anybody who hasn't been paying attention for the past couple years: Most alternative registrars not only perform ownership transfers for free, but also finish them in real-time.

Plain and Simple

Of the more than 20 million existing dot-com registrants, there are still roughly 10 million VeriSign dot-com holders who, amazingly, have not moved their domains to another registrar to take advantage of better services and lower fees. If you are selling a domain registered through VeriSign, my advice is to execute a registrar transfer so you can then quickly transfer ownership without paying VeriSign's extortionist "priority" fee.

Given the amount of market share VeriSign has lost recently, the company has been using behind-the-scenes tactics to prevent registrar transfers from going through. While many registration service providers have written letters to ICANN asking the governance body to stop VeriSign from blocking legitimate transfers, it is widely believed among competing registrars that the company has continued to deny legitimate transfers in order to avoid losing more market share.

Most registrar transfers away from VeriSign, when not blocked by the company, take roughly five to seven days to complete. Then registrants can immediately take advantage of their new registrar's capabilities. To transfer domain ownership if you use an OpenSRS registrar, for example, you simply create a new registrant profile, transfer the domain into it from your main profile, and issue the new owner a username and password.

Truly, it is as simple as that. After the registrar transfer completes -- which, on average, costs less than $15, depending on which alternative registrar you use -- the whole ownership-transfer process takes about 60 seconds and doesn't cost a cent.

Natural Selection

Most people who love the Internet hate VeriSign more than open source advocates hate Microsoft. But despite the prevalence of this sentiment, many continue to register and renew their domains through the company. It is my hope that more court rulings will force VeriSign to stop abusing consumers in the interest of turning a profit.

If you own your own domain name -- in my case, I own about 200, which I happily manage through OpenSRS, just like the admins who manage the NewsFactor Network domains -- then you probably already have at least one VeriSign or Network Solutions horror story to tell.

Despite all these horror stories, VeriSign will control the central dot-com registry until the end of 2007. I hope that at that point ICANN will not renew VeriSign's contract and that a competing registrar like OpenSRS, GoDaddy or Melbourne IT will rise to the challenge and usher in a new era of customer-friendly, low-cost registry services.

Until then, VeriSign will likely do everything in its power to turn a profit. And those unfamiliar with alternative domain services will continue to fall prey to the VeriSign beast.