Domain Name Primer

As the Internet has exploded onto the business landscape, companies are quickly being forced to build Web sites, to create Internet strategies, and to register relevant Internet domain names. With over eight million domain names registered so far, good names are highly-prizedwitness the recent sale of business.com for $7.5 million. So what is the domain name system, and what legal issues does it raise?

What is a Domain Name? Domain names are the convenient, human-readable combinations of letters and numbers that identify a location on the Internet, such as "hughesluce.com" or "yahoo.com." Most common domain names end with a dot and a series of three letters, such as .gov, .edu, .net, .org, or the ubiquitous .com. Each domain name corresponds to a series of numbers called an "Internet Protocol number" or "IP address" that serves as a routing address on the Internet. For example, the IP address for the domain name hughesluce.com is 208.35.145.201. By using this information, a computer can connect to the server hosting the Hughes & Luce Web site. The directory of all domain names and their corresponding IP addresses makes up the Internet domain name system, also called the DNS.

History of Domain Name System. In 1993, a company known as Network Solutions, Inc. ("NSI") entered into an agreement with the United States government to provide domain registration services and became the only company allowed to register Web site names ending in the popular .com, .org and .net suffixes. Initially, domain registration was fully subsidized by the National Science Foundation, resulting in free domain registrations for anyone interested in having a domain name. However, the Foundation soon discovered that the popularity of domain names would quickly drain its resources and stopped the subsidies in 1995. Thereafter, NSI charged registrants a $100 fee for a two-year registration, which was later lowered to $70 after a $30 government fee was discontinued. This fee was not without its opponents, however, and in 1998 a group of nine angry individuals and companies sued Network Solutions and the Federal government in a class action claiming that the fee was an illegal tax on computer users. On January 18, 2000 the Supreme Court affirmed without comment a Federal judge's holding that neither the government fee nor the registration fee constituted an unauthorized tax.

Current Domain Name System. As the Internet grew in popularity, resistance to NSI's...