February 16, 2001
Network Solutions Admits It Sells Customer Data
By Keith Perine, The Standard

The domain-name registrar says it only sells information about businesses, not individuals. The news comes as Congress decides if it should enact new privacy safeguards.

WASHINGTON: VeriSign (VRSN) subsidiary Network Solutions confirmed Friday that it is selling data from the central registry of owners of dot-com, dot-net and dot-org Internet domains.

VeriSign spokeswoman Cheryl Regan said Friday that the company sells data, such as names, addresses and phone numbers of businesses (but not of private individuals) that register domains. The buyers are marketing firms and other businesses, such as Internet service providers and Web hosting and telecommunications companies, which are interested in selling their services. NSI tells the data buyers whether domain names are linked to Web sites that are actively engaged in e-commerce.

"It is a way to earn revenue," Regan said. "There is a demand for it." She added, however, that the revenue from such sales is a "fraction of a percent" of VeriSign's projected $750 million of revenue for this year.

Regan said that the company doesn't sell e-mail addresses and that registrants can opt out of having their data sold by sending a message to privacy@networksolution.com, although few have done so.

"This adheres to all of our privacy guidelines," Regan said.

News of the data sales, reported Friday by the Wall Street Journal, comes as Congress begins mulling over whether and how to enact new privacy safeguards for data. On March 13, the Federal Trade Commission will hold a workshop to examine data handling both online and offline. NSI is legally required to make the registry data publicly available and, according to Regan, nothing prohibits the company from selling it.

"It does highlight the questions many people have raised about whether there are privacy implications because of the availability of this data," said Alan Davidson, associate director of the Center for Democracy and Technology.

In 1992, NSI won an exclusive contract from the government to register dot-com, dot-net and dot-org domain names on the Internet. For several years, NSI acted as the Ma Bell of cyberspace, registering new domain names and maintaining the registry of assigned names.

After NSI's exclusive agreement with the government expired in 1998, the Clinton administration transferred nominal control of the three domains to the Internet Corporation for Assigned Names and Numbers, a nonprofit organization of the Internet's business, technical and academic players. NSI began facing competition for registering domain names in June 1998, but has retained control of the registry of information on the entities that have rights to individual domains.

In September 1999, the Commerce Department, NSI and ICANN struck a deal whereby NSI won the right to keep control of the registry for up to four more years, and agreed to divest itself of either its registrar business or the central registry by this April. Two weeks ago, senior executives for VeriSign, which bought NSI last year, signaled that the company was soliciting bids for the registrar side. Spokesman Brian O'Shaughnessy said VeriSign is "certainly leaning very favorably toward the registrar being divested." If the company meets the April deadline for divesting its registrar business, it will get to keep control of the registry until 2007.

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