ROANOKE TIMES
Copyright (c) 1997, Roanoke Times
DATE: Monday, January 13, 1997 TAG: 9701130058
SECTION: VIRGINIA PAGE: B-6 EDITION: METRO
DATELINE: HERNDON
SOURCE: Associated Press
The federal government in 1995 authorized Network Solutions Inc. to charge registration fees for Internet addresses and required that 30 percent of the money be placed in a fund for ``preservation and enhancement'' of the global computer network.
Since then, the popularity of the Internet has soared, and so has the number of addresses - known as domains - registered by the Herndon-based company. But none of the money earmarked for the Internet fund has been spent, and the amount collected lags far behind the number of domains registered.
Network Solutions said $9.9 million had been deposited in the account between Sept. 14, 1995, when the fees were introduced, and Nov. 30, 1996.
The company's own figures on the total number of addresses registered during the period indicate that the balance should be about $20.7 million, not counting interest, provided the company collected all the fees.
Privately held Network Solutions has declined repeated requests by The Washington Post to explain the apparent discrepancy.
The $10.7 million gap ``is indicative of a delinquent payment problem experienced by Network Solutions,'' said Bill Noxon, a spokesman for the National Science Foundation, the federal agency that placed Network Solutions in charge of the Internet address registry and oversees its work.
The unpaid fees are partly attributable to ``speculators and resellers who have no intention of paying,'' Noxon said.
The gap doesn't take into account a delay between the time a domain is registered and the time payment is due, he said.
Noxon said an audit last year showed that the funds placed in the account were consistent with the fees received by Network Solutions.
Network Solutions, a subsidiary of San Diego-based defense contractor Science Applications International Corp., has declined to discuss profitability.
The company's agreement with the National Science Foundation says the money in the account is to be spent on the ``intellectual infrastructure'' of the Internet, a term the agreement doesn't define.
Domains - such as ``cnn.com'' for Cable News Network - have become such hot commodities that legal fights have erupted over rights to them. Companies have bought them for tens of thousands of dollars on the secondary market.
The number of domains registered with Network Solutions increased by 688,499 between Sept. 30, 1995, and Nov. 30, 1996, according to company figures. If Network Solutions was paid for all of them, its 70 percent share would amount to $48.2 million and the 30 percent allotted to the Internet fund would amount to $20.7 million.
Not all of those payments were due by Nov. 30. Network Solutions accepts payments up to 30 days after a domain is activated, according to the company's World Wide Web site.
Nor does the $20.7 million reflect renewal fees that Network Solutions was entitled to charge for domains registered before the fees were instituted, when the NSF was paying the company to perform the service.
The company last year cut off thousands of domains for nonpayment.
Peter R. Rony, a chemical engineering professor at Virginia Tech who is working on a book about domains, said that Network Solutions should provide a public accounting of th $10.7 million difference.
The apparent gap reinforces his opinion that the NSF is ``out of its element'' overseeing the domain registry.
``I think NSF has a tiger by the tail, and the prudent action is to let go of the tail,'' Rony said.
The agency's agreement with Network Solutions ends in 1998.
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