As Network Solutions gets legal sanction to continue its domain-name business unfettered, a new wrinkle has appeared in the sometimes weird and twisting tale of challenger AlterNIC and its embattled founder, Eugene Kashpureff.
That wrinkle goes by the name of Jason Hendeles. An estranged friend and former business partner of Kashpureff's, Hendeles plans to take over AlterNIC's name and assets and return it to its original mission as a bona fide alternative registry of domain names.
"We don't want the AlterNIC to continue in its current condition," Hendeles said. "It threatens a lot of the people and the groups that are involved in this because it destroys the legitimacy of the effort."
Kashpureff himself is now awaiting judgment from a New York court after pleading guilty to computer fraud last month. Kashpureff admitted diverting Web traffic from Network Solutions' InterNIC domain registry to his rival AlterNIC. He faces a maximum penalty of five years in prison and a $250,000 fine.
AlterNIC is the best known among the smattering of alternative domain-name registrars who want to see the market open up. It has been servicing new top-level domains, such as .nic, .per, and .xxx., since early 1996.
In AlterNIC's stead, Hendeles is preparing to launch a new service to take on Network Solutions' control over the domain-name space. The new registry will be based in Toronto, where Hendeles lives, and will seek to administer standard top-level domains. These domains (such as .com, .org, and .net) are now handled by Network Solutions, which runs the Net's primary domain name registry, InterNIC.
Hendeles said he will target the service primarily at Canadians, but will also seek to administer non-standard domain names such as .med, .arts, and .xxx for international customers. The working name for the service is C-NIC -- Canada Network Information Center.
Asked to assess Hendeles' plans for C-NIC, Kashpureff said, "I think it's pretty lame." There are other alternative domain-name efforts, he said, and some of them have gained a strong following. Furthermore, C-NIC diverges from Kashpureff's original view of AlterNIC, he said.
"I envisioned that it should be a network information center," Kashpureff said, characterizing Hendeles as more interested in the money-making potential of AlterNIC.
Hendeles bases his right to take over the business on a recent county court ruling in Washington state. The judge assigned a debt by Kashpureff's AlterNIC parent company, A Towing Company Inc., to Hendeles' Skyman Enterprises. The debt was incurred by AlterNIC in March 1997, Hendeles said, when he began funding the registry after becoming involved with Kashpureff and his plans during the preceding year.
"The ruling positions us as a creditor, and now that we have judgment we can seek assets to repay the credit," Hendeles said.
When launched, "[C-NIC] will be a new consolidated group that repositions the AlterNIC," Hendeles said. "It's going to be an established service with a strong network, a strong ... database system and a mix of other services."
The relaunched registry will have financial and strategic backing from several unnamed partners, he said. But the primary funding comes from Skyman Enterprises, a holding company enriched by Hendeles' inheritance as a member of a Canadian family with valuable real estate holdings.
Not Waiting for Reform
If successfully launched, C-NIC will preempt higher-level efforts to reform the management and business of domain-name registration. The US government issued a "Green Paper" in January calling for the removal of the domain system from its control. The document calls for opening the registration business to competition, and sharing Internet technical governance among private organizations and international bodies.
But there is resistance to the government's plan, which critics say enables Network Solutions to continue its monopoly, and doesn't allow fully open competition for domain services. The International group, the Council of Registrars has its own proposal for revamping domain administration, and has repeatedly issued its own condemnation of the US plan.
Hendeles agrees with critics. "There are so many cooks in that kitchen that nothing will get done. I think [the US plan] is years away from being an effective and efficient process."
"Network Solutions doesn't have the right to be granted a monopoly," Hendeles said. "There are groups who have a right to compete and have a right to sell these services themselves. And we are the first group to do that." And the necessary network infrastructure is in place, Hendeles said, for C-NIC to proceed.
But as it attempts to administer names itself, the new AlterNIC will face the task of somehow getting its names recognized on its system. Critics wonder how Hendeles can gain customers when those customers' domain names stand little chance of recognition by the Net's primary root server system.
Hendeles said part of the solution is to distribute software to Internet Service Providers and network administrators that points to name servers aware of the new domains. But getting administrators to deploy such software en mass will be an uphill battle. Hendeles hopes that by building enough awareness, promoting its mission, and gaining a critical mass of customers, C-NIC administered names and name servers will become a de facto part of the Internet's mainstream root server system.
Meanwhile, he said, domains that are not recognized by the Internet at large will appeal to many customers, much like an unlisted telephone number. Hendeles believes businesses preferring to run their networks with "unlisted" domains will be a core element of C-NIC's new beginning. Such domains would be meant only for internal company use.
But some don't want to see the effort succeed in advance of plans like the US Green Paper or the Council of Registrars, fearing that plowing ahead without consensus will rob the Internet of its universality, both technically and politically.
"If they succeed in Balkanizing [the domain system] it will never recoalesce," worries Jerry Scharf, executive director of the Internet Software Consortium. "They're willing to risk Balkanization to try and get what they want, and to me the fundamental asset of [the Net] is not to have that. You have to have that universal span that makes all this interesting."
For its part, primary domain keeper Network Solutions is silent on the matter for now. Spokesperson Nancy Ward said "the ability to share in .com and .org isn't technically ready yet," but said the company has no comment on Hendeles plan for C-NIC. "We fully expect competition, but it's going to be a little bit longer before we're technically ready."
Kashpureff, currently in Seattle, had not yet learned of the Washington court's ruling when reached for comment. But he characterized Hendeles financial contribution as venture capital -- not debt. "He was ostensibly buying in for stock," he said. "Then he backed out."
Hendeles says the investment was purposefully structured as a "convertible debt," in part to prepare for the situation he now finds himself in. "If the company had done well we could have converted the debt to equity." The court's ruling supports Hendeles side of the story.
There were too many risks, Hendeles said, to simply provide unconditional funding. "I did not feel that a typical venture capital situation was appropriate... Eugene was always aware of that."
Hendeles claims other groups involved in alternative domain registration have expressed interest in seeing AlterNIC closed down.
In any case, he said, it's time to move forward without controversy. "Controversy is only good to a point. At some point you either make things happen or you don't."
