On July 2, 2002, Damien Cave published an interview on Salon.com with John Gilmore, "original 'cypherpunk' and all-around Internet supergeek," titled "It's time for ICANN to go." In this wide-ranging interview, Gilmore — an early employee of Sun Microsystems who also co-founded Cygnus Software (acquired by Red Hat) and was an early supporter of the Electronic Frontier Foundation and the Internet Society (ISOC) — offered blunt insight and eye-opening historical detail that explains an awful lot about how the root zone of the global Internet has become such an unmitigated mess.
Stakeholders may find familiar the criticism cited in Cave's introduction that, "(c)ritics from across the political spectrum have claimed for years that ICANN is secretive, slow, inefficient and, worst of all, firmly in the pocket of special interests." But what is striking is that ICANN was barely four years old at the time and what becomes crystal clear by the end of the interview is that the issues plaguing ICANN and Internet governance are systemic, long-standing, and firmly entrenched.
According to Gilmore, "(t)he root of the problem, I believe, was ICANN's original 'volunteer' lawyer, Joe Sims. He wrote the bylaws of ICANN and structured it so that it would be, as completely as possible, unaccountable to anybody." He went on to say that:
I was involved in these discussions while Jon Postel (the person responsible for assigning numerical Internet addresses for much of the Internet's existence) was alive; we were all afraid that any small organization set up to end the NSI (Network Solutions) monopoly (on domain names) would be sued out of existence by NSI. We didn't want NSI to succeed at that.
With simple logic, Gilmore points out that transparency and accountability can't exist when a trustee of a global resource is effectively immune from scrutiny by users of that resource. Many stakeholders — particularly the more than 9,000 public commenters that opposed ICANN's $20 million sale of .com pricing power to VeriSign — might relate to Gilmore's observation that, "(t)hey (ICANN) hold 'open public meetings' where the public is free to shovel its comments into a dumpster. But then they ignore the comments and do what they want in closed-door meetings."
Gilmore goes on to recount that, in March 1995, SAIC acquired NSI for $3 million. What happens afterward appears convoluted, with Gilmore asserting:
But somehow in the actual government decisions, what always ended up happening was that NSI would keep its monopoly. The rationale was "stability of the Internet" (a hoax, since hundreds or thousands of people in addition to NSI were capable of doing the technical work involved), "avoiding trademark squatting" (NSI had already set its domain-dispute policy to "anybody with a trademark trumps anybody without one," so they were working in league with the trademark lobby) or "preventing chaos" (another word for competition).
While this historical narrative is illuminating, financial mathematics is even more compelling. Gilmore says that he learned from his work with the CORE domain registry that it cost less than 25 cents per year per name to run. He observed that NSI was working with much higher volumes and that "it should actually cost them less than 1 cent per year to do the work."
In 2000, NSI reported in official filings with the U.S. Securities and Exchange Commission (SEC) related to its acquisition by VeriSign that it managed 10 million total registrations across its registries, which included .com, .net, and .org, among others. Today, the .com registry has more than 150 million registrations and the price is $7.85. It seems highly unlikely that the vast delta between "less than 1 cent per year" and $7.85 is accounted for by the increased security and workload requirements of the modern Internet registry — an assumption supported by VeriSign's allocation of less than 7% of revenue to infrastructure investment while using the rest for stock buybacks.
In May 2000, VeriSign, which had been public for two years at that point, acquired NSI from SAIC for "$21 billion in stock." The risk analysis included in the acquisition prospectus cited earlier makes clear that the U.S. Department of Commerce was transferring responsibilities for operating the Internet's public interest infrastructure to ICANN and NSI — a very different proposition than granting rights to the registries and certainly not anything approaching ownership. Importantly, VeriSign understood the reality of what it was buying — and not buying — with sufficient presence of mind to flag this to investors and the SEC as a risk.
This return on a five-year investment of $3 million isn't too shabby — especially considering that, at $6 per year for 10 million names, it would have taken about 350 years to recoup the $21 billion paid.
It didn't take three centuries, however, and the reasons why not go a long way towards explaining the rot at the root of the global Internet. On Monday's broadcast of MSNBC's Rachel Maddow Show, Senate Majority Leader Chuck Schumer said of recently-confirmed Interior Secretary Deb Haaland that, "...she'll stop the rape of our great federal lands by the oil companies." However, oil companies pay leasing fees to the U.S. federal government in exchange for the ability to extract petroleum from public lands, and Senator Schumer should look at what is being taken from the U.S. government's public interest Internet registries — he might find his analogy much more apt.
Written by Greg Thomas, Founder of DNSDecrypt