Network Solutions - Registry and Registrar Business

Registry and Registrar Business

Network Solutions, Inc. (NSI) first operated the domain name registry under a sub-contract with the U.S. Defense Information Systems Agency (DISA) in September 1991. NSI gave out names in .com, .org, .mil, .gov, .edu and .net for free, along with free Internet Protocol (IP) address blocks. This work was performed at the Chantilly offices of GSI, the primary contractor, a corporation formed by Infonet to avoid foreign ownership of U.S. government contracts. The Network Information Center at SRI International had performed the work under Elizabeth J. Feinler since 1972.

In 1992, NSI was the sole bidder on a grant from the National Science Foundation to further develop the domain name registration service for the Internet. In 1993, NSI was granted an exclusive contract by the National Science Foundation (NSF) to be the sole Domain name registrar for .com, .net and .org Top Level Domain (TLD) names, a continuation of work NSI had already been doing. NSI also maintained the central database of assigned names called WHOIS. A contract was given to Boeing to operate the .mil registry, and was also performed by NSI under subcontract.

In 1995, the National Science Foundation gave Network Solutions authority to charge for domain name registrations. Network Solutions charged $100 for two years registration. The fee was imposed on all domains and 30% of this revenue went to the NSF to create an "Internet Intellectual Infrastructure Fund." In 1997, a lawsuit was filed charging Network Solutions with antitrust violations with regards to domain names. The 30% of the registration fee that went to the NSF was ruled by a court to be an illegal tax. This led to a reduction in the domain name registration fee to $70.

In the 1990s, Network Solutions implemented a policy of censoring domain names. This came to light when Jeff Gold attempted to register the domain name shitakemushrooms.com but was unable to. Further aggravating the controversy was the fact that while Network Solutions' automated screens blocked the registration of shitakemushrooms.com, the domain name shit.com had been successfully registered. Network Solutions argued that it was within its First Amendment rights to block words it found offensive, even though it was operating pursuant to contract with a Federal agency.

Network Solutions' $100 charge, which many parties believed was excessive, in addition to its monopoly position in the market, was one of the contributing pressures that resulted in the creation of the International Ad Hoc Committee and its failed attempt to take control of the domain name system, and to the US Department of Commerce, NTIA releasing the White Paper and ultimately contracting with ICANN to administer the DNS.

With the formation of ICANN, the domain name industry opened up to partial competition, with NSI retaining its monopoly on .com, .net and .org but having to recognize a separation of registry, which manages the underlying database of domain names, and registrar, which acts as a retail provider of domain names. To achieve this separation, NSI created a "firewall" between the two new divisions of the business, creating separate technical infrastructure, organizations, and facilities. By the end of 1999 the fee for registration had been reduced, from $34.99, to a wholesale rate of $6 per year to registered resellers.

In August 2009, Network Solutions notified customers that its "secure" servers were breached, and led to the exposure of names, address, and credit card numbers of 573,928 people who made purchases on Web sites hosted by the company. Susan Wade, a spokesperson for Network Solutions, said, "We really feel terrible about this." At the time of this writing, NSI does not know how their servers were compromised.

One year later in August 2010, Network Solutions discovered that one of their widgets offered to their domain registration and hosting customers was capable of distributing malware by sites displaying it. As many as 5,000,000 of their registered domains may have been affected by the hack. The affected widget was at least temporarily addressed by Network Solutions, who were able to make changes to the code to prevent it from loading.