Protecting Domain Name Assets

CPA Journal, The, Apr 2004 by Bagby, John W, Ruhnka, John C

Despite the bursting of the dot-corn bubble, Internet business continues to expand at a rapid pace. Traditional "brick and mortar" businesses continue to adopt e-commerce features, and both business and governmental organizations are moving general information, catalogs, inquiries, orders, transaction processing, and payments online. Connecting customers and providers in this complex electronic environment is made possible by the domain name system (DNS). As e-commerce capabilities and revenues become an increasingly important dimension of more organizations, their domain name system assets become an increasingly valuable intangible. Consequently, monitoring and protecting such assurance of continuous name server operation has become increasingly important.

The Domain Name System

Every Internet web server has one or more unique Internet Protocol (IP) addresses, following the format "255.255.255.255." The domain name system links these numerical IP addresses to easier-to-remember alphabetical names. These alphabetical IP address forms, known as web domain names, and the domain name system serve two critical functions in e-commerce.

First is a lookup and mapping function. In the massive network of networks that is the Internet, lookup and mapping is conducted by a global name server network that looks up IP addresses on behalf of user requests; it then maps the correct electronic route to the specific server requested. The system also answers inquiries from other name servers. In addition, lookup and mapping are used to route e-mail correctly.

The second key function of the domain name system is to strengthen and extend brand image; domain names that strongly identify a business or organization play a critical role both in attracting e-commerce business and in generating repeat traffic.

The Internet was developed by the U.S. government as a robust data communication network for defense and academic research purposes. By the 1990s, Internet communications transcended simple text files to include audio and visual media, and the Internet expanded beyond university and government researchers to include consumer and business users. Government and law enforcement agencies at all levels also adopted the Internet.

Large user networks developed in many nations, and by the late 1990s, the U.S. government acknowledged the Internet's commercial and international transformation; they turned control of the domain name system and Internet technical interoperability standards over to an international nonprofit organization formed under U.S. auspices, called the International Corporation for Assigned Names and Numbers (ICANN). ICANN includes a generic names supporting organization, which approves generic Top-Level Domain registries (gTLDs) such as .com, .net, and .org, and an address supporting organization, which regulates address mapping and interoperability standards.

In the domain name cpaj.com, "cpaj" indicates the specific IP address of the organization and the ".com" suffix indicates the gTLD registry in which that IP address is located-in this case, the .com registry. In all non-U.S. countries, Internet addresses must additionally contain a country code suffix, such as .uk for Britain or .fr for France, identifying the specific country registry in which the IP address is located. Each generic and country code TLD registry is headed by an administrator who keeps track of all domain names listed in that registry. For example, the generic TLD registry .org is administered by the Public Interest Registry. Country code registries also have administrators; for example, the DotPH administrator maintains all .ph country code domain names for the Philippines, while in Vietnam, the Vietnam Internet Centre administers the country code .vn registry.

In addition, ICANN has authorized different commercial domain name registrars, such as Network Solutions, Inc. (NSI) or Register.com, to sell new domain names in approved generic and country code TLD registries. NSI, now part of VeriSign, has administered the generic domain name registries .com, .net, .org, and .edu in the private sector since 1979, under its former exclusive contract with the National Science Foundation. NSI also nonexclusively sells domain names, and has handled most of the major TLD registries. ICANN has accredited new TLDs, such as .biz, and has approved additional commercial companies as domain name registrars, such as Register.com.

Global Internet Environment

Internet technology is rapidly spreading throughout the world; eventually, the United States will cease to constitute the largest Internet audience. North America presently has 165 million Internet users and Europe has 140.6 million, while the Pacific Rim has over 100 million users-and a population nearly eight times larger than North America or Europe. The much larger Pacific Rim population, and its increasing Internet use, will eventually produce a larger audience than either Europe or North America.

Countries take three general approaches to Internet operations. Numerous countries take a largely hands-off approach; for example, Israel has few substantive conditions on domain name issuance or Internet usage. On the other hand are nations that seek to impose strong control over domain name issuance in order to regulate Internet content, restrict traffic, tax ecommerce, conduct law enforcement, or protect political or social norms; China is an example of this more restrictive approach. Another example is Vietnam, which prohibits political groups from using the .vn country code registry unless they store all of their related data on servers located in Vietnam itself; foreign online newspapers must use the .vn registry in order to be distributed online in Vietnam. (See The Future of Ideas: The Fate of the Commons in a Connected World, by Lawrence Lessig, 2001.)