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Commission investigates Internet agreements

European Commissioner Karel Van Miert has ordered an investigation into the licensing agreements between Network Solutions Inc (NSI) and the test-bed registrars of second level Internet domain names in the .com, .org and .net domains. The Commission's Directorate-General for ...

European Commissioner Karel Van Miert has ordered an investigation into the licensing agreements between Network Solutions Inc (NSI) and the test-bed registrars of second level Internet domain names in the .com, .org and .net domains. The Commission's Directorate-General for Competition (DG IV) has identified a number of clauses in the licensing agreements - which came up for renewal on 16 July - that raise anti-competitive concerns, and has launched an anti-trust inquiry. The Internet domain name system maps user-friendly names onto difficult-to-remember numbers (IP addresses) that identify computers connected to the Internet, the most frequently used generic top level domain (gTLD) being .com. The gTLD is regulated through licensing agreements granted by agencies contracted to the US Department of Commerce. These licensing agreements came up for renewal on 16 July 1999. A more liberalised system is to be introduced, by accrediting an unlimited number of competing registrars in accordance with guidelines laid out by the regulatory body ICANN (Internet Corporation for Assigned Names and Numbers). NSI has already licensed five test-bed registrars, and is developing a shared registration system (SRS) to allow for additional competing registrars. Mr Van Miert wants to ascertain whether the licensing agreements restrict competition and whether certain provisions in the agreements might constitute an abuse of NSI's dominant position. DG IV has alerted the US Department of Justice and the US Department of Commerce to its concerns. In a letter addressed to Becky Burr of the US' National Telecommunications and Information Administration, DG IV expressed doubts relating to the lack of safeguards preventing the NSI registry discriminating against competing registrars and that NSI is not subject to the conditions set out in the ICANN agreement. The letter highlights barriers to market entry such as the requirement of a performance bond of one million US dollars to enter the market, and the disincentives to transfer business between competing registrars. Mr Van Miert has opened an informal inquiry following the receipt of several informal complaints against the licensing agreements and alleged abuse of NSI's dominant position. DG IV will investigate these allegations in cooperation with the US Department of Justice.