Aardvark Daily
Domain name funds hit by legal action
Copyright © 1997 to Bruce Simpson, syndication rights available
The Clinton Affairs, a 7am News Special
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28 Jan 1998

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A class action lawsuit filed by the Association of Internet Registrants of America (AIRA) has led Judge Thomas Hogan to ask Network Solutions Inc (NSI) and the National Science Foundation (NSF) to "freeze" the funds in the Intellectual Infrastructure Fund in until it is decided whether the fund was lawfully created.

Judge Hogan is now to decide whether the $100 registration and $50 annual renewal fee that applies to internet domain names constitutes an unconstitutional tax. His decision on this matter is expected by the end of the month.

The plaintiffs in this action are claiming that the setting aside of 30% from the registration fees amounts to an unconstitutional tax and that NSI are in breach anti-trust laws with respect to their operation of the domain name function.

William Bode, attorney for the plaintiffs is quoted as saying "Under federal law, no independent executive agency -- such as NSF -- can collect fees that exceed the cost of providing the service they are administering. NSI, the agent of NSF, spends less than $5 to register domain names, yet it charges a registration fee of $100 and renewal fees of $50 per year."

A second motion will be filed this week asking the US District Court to force NSI to return all registration and renewal fees to Internet users and to prevent NSI from collecting fees in excess of those required to run the service.

"The government has, in effect, unlawfully given this [intellectual] property for free to NSI and permitted NSI to make exorbitant profits -- at the expense of the Internet user. Worse, the services these fees are supposed to fund are not meeting the needs of the Internet user." said AIRA President Howard Sartori.

Many commentators have been concerned over the NSI/NSF monopoly on the management and issuance of domain names in in the .com, .org and .edu domains. Moves are already afoot to reorganize the administration of the domain name administration and operation to "free up" the market to other registrars and administration bodies.

Related Story

More domain news can be found at 2Day Internet

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