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Why Bermuda should refuse to pay a domain name levy

A furore has broken out over the call by the Internet Corporation for Assigned Names and Numbers (ICANN) for countries to cough up some dough for supporting its administration of top level country domain names like ".bm'' for Bermuda or ".uk'' for the United Kingdom.

Domain names are the Internet addresses of Web sites and come in the form of "www.bermuda.com'' or "www.bermuda.bm''.

The levy for the smaller jurisdictions is miniscule. But it's the principle of "no taxation without representation'' and of acknowledging that money is owed to the US-based non-profit organisation that has stopped many countries from handing any money over. I attempted to contact the Bermuda College, the Island's registry administrator, to find out what Bermuda was doing with the request but I have not received an answer yet. I believe Bermuda should take the strategy adopted by Europe and refuse until a more formal agreement over administration of the ".bm'' affix is forged.

ICANN is a technical co-ordination body for the Internet created in October 1998 by a broad coalition of the Internet's business, technical, academic, and user groups. ICANN assumed responsibility for a set of technical functions previously performed by another organisation under contract from the US government. ICANN co-ordinates the root servers or databases that act as master lists of the sites individual domain names refer to on the Internet.

Basically, ICANN purports to be and acts as a digital traffic cop.

In May ICANN decided it needed some funding and at a meeting the organisation decided on a range of payments countries were going to "self-select'' to pay depending on the number of domains registered under the country appendage, and according to GDP. About $1.5 million was needed for ICANN's $4.5 million annual budget.

The money is separate from the contributions made by the owners of the .com, .net and .org domains who pay a levy to ICANN as part of the annual fees to a variety of registrars. ICANN directly controls the generic affixes while designated national registers look after the country codes. I assume Bermuda and the other UK dependencies received invoices when the UK was invoiced.

Guernsey received one for the upkeep of its ".gg'' domain (kind of sexy isn't it?), but the Island's Governmental Advisory Committee on Domain Names (GAC) decreed that the levy would not be paid.

"The GAC is not prepared to concede that ICANN or the US has any jurisdiction whatsoever in relation to the Channel Island domain names, and explicitly rejects any attempt to raise a charge on e-commerce in the islands,'' a spokesman said.

The UK, along with the Channel Islands and the Isle of Man, has been invoiced for about a quarter million dollars. Guernsey said the Channel Island's contribution was about US$1,000 but the committee was worried about acknowledging Guernsey was not the ultimate administrator of ".gg''.

The rest of the European Union has gone along with that decision. The country registrars refuse to pay until proper contracts are in place guaranteeing a standard of service in return for the cash.

Europe's industry body, The Council of European Top Level Domain Registries (Centr), has advised members to make a donation to ICANN but accompany the cash with a letter saying that this implies no legal contract. South Africa and New Zealand have also been unwilling to pay their levy. Bermuda, hopefully, has taken a similar stand in what so far has been an Internet centred too much on the US.

Judges, in some cases, are so far out of touch with the advance of technology as to make stupid decisions. In the legal battle over the domain name sex.com.

Network Solutions, the previous monopoly holder of domain name administration, is also behaving stupidly in the case.

The supposed owner of sex.com, probably one of the most lucrative domain names on the Internet, has been ex-convict Stephen Cohen. The original owner of the domain, Gary Kremen, claims in the US court that Mr. Cohen stole the domain two years ago by forging a phoney transfer letter to domain registrar Internic, the body that is now controlled by Network Solutions.

Mr. Kremen's suit against Mr. Cohen and Network Solutions, which refused to revoke the transfer, is currently before the courts. If it wasn't for the astounding decision by a US District Court Judge and the ludicrous defence claim by Network Solutions, the case would have been an issue of business fraud.

The judge tried to weasel out of responsibility by claiming that it was now up to the US Government to forge laws to protect domain name rights. To me, the whole treatment of domain names so far has been one akin to that of a type of property. They have value and are bought, sold and transferred.

Network Solutions has defended itself by claiming that domain names are not property, and are therefore not subject to property law. US District Court Judge William Ware sided with Network Solutions in a summary judgment he gave in May. Mr. Kremen put new arguments before the courts last week with a decision expected in two weeks.

Huh? What the heck did I and thousands of people like myself pay $100 or so bucks a year to them for, if not to secure exclusive use of a domain name, a right that Network Solutions was contracted to administer? That is -- the domain name was some form of property.

OK, I know there are more complicated legal arguments behind what I see is a common sense view over the treatment of domain names. According to Wired Magazine the dispute centres around whether domains are more like a plot of land (property) or a phone number (a designation for a service).

If Network Solutions is claiming domains are not property it might win in the short-term, but the Internet as a place of commerce will be destroyed. A win will mean chaos in which hijackers will rule. I vote for common sense.