ICANN — Accredited Alabanza Enters Market for Domain Name Registrations, Strikes At Network Solutions' Monopoly Pricing

Business Wire, Nov 11, 1999

BALTIMORE--(BUSINESS WIRE)--Nov. 11, 1999--

Alabanza Inc., one of the companies recently accredited by the government to compete with Network Solutions Inc. (NSI) for domain name registrations, has launched Bulkregister.com, a service that offers web site names at rates way below current market prices.

"This is what the government intended when it ended the Network Solutions monopoly. Many companies have been hoping to reap windfall profits by selling domains at current prices. Bulkregister.com will knock prices down to a reasonable level for consumers," said Tom Cunningham, president of Alabanza Inc., a provider of web hosting automation systems.

"Ultimately," added Cunningham, "the web services industry will benefit also. With more domain names registered, there will be greater demand for web sites, and the hardware and software needed to support them."

Most domain registration services charge $70 for two years -- a $35 per year rate. That's because they are reselling domain registrations through NSI, the company that until recently had monopoly rights from the government to register names at a fixed $35 yearly price.

In 1992 NSI was granted an exclusive contract by the National Science Foundation to register .com, .net and .org top-level domain (TLD) names, which quickly became the most popular web site addresses on the internet. NSI captured the entire market, registering more than six million domain names, and generating gross revenues of more than $420 million. NSI now has a market capitalization of more than $5 Billion (Nasdaq:NSOL).

But NSI's monopoly is now ended. More than fifty companies were recently accredited as registrars by the Internet Corporation for Assigned Names and Numbers (ICANN), with more to come. ICANN is the non-profit organization established by the Commerce Department to introduce competition into the domain name market.

The government's negotations with NSI and the nascent internet registrar community have been lengthy and rancorous. This Wednesday the "ICANN-NSI Registry Agreement" was finally signed, putting the rules for competition on a "permanent and firmer footing," according to the ICANN web site (www.icann.org/nsi/nsi-registry-agreement-04nov99.htm).

NSI will retain its role as the official registry (as opposed to registrar) of domain names, responsible for maintaining the central directory of web addresses that is a critical part of the internet's infrasructure. For this service the registrars will pay NSI $9 per domain name through 1999, and $6 per name beginning in 2000, as well as a $10,000 software licensing fee. ICANN will get $1 per name from the registrars, as well as a $5,000 yearly fee, which will provide most of the funding for the organization.

At the prevailing $35 per year rate, the new registrars would stand to earn high profits by processing domain name requests for the thousands of web hosting companies, internet service providers (ISPs), web developers, and webmasters who can resell the service.

But that scenario is now unlikely with Bulkregister.com offering domain names at deep discounts. The annual price per name steadily decreases to $12 as the volume of registrations reaches one thousand. At that price Bulkregister.com will earn only a few dollars per domain name, but is counting on resellers to bring in high volumes. With rates so low, industry observers say, many companies will bundle domain registrations for free with other services, such as web hosting and internet access.

If you would like more information about Bulkregister.com or Alabanza Inc., please see their web sites or call 1-800-361-2682, ext 6501. http://www.alabanza.com http://www.bulkregister.com http://www.networksolutions.com.