A follow-up to the earlier article on where the money is going...

http://www.news.com/News/Item/0,4,15256,00.html?st.ne.ni.rel

As a sidebar, note that more than 50% of new registrants in
com/net/org do not identify themselves as living in the USA.

Leni.

Domain fund marked for next Net
By Courtney Macavinta
Staff Writer, CNET NEWS.COM
October 14, 1997, 5:15 p.m. PT

Congress has finally tapped a $34.2 million fund set
up to "preserve and enhance" the infrastructure of
the Internet, but questions remained today as to
how the rest of the money will be used.

Drawing from Net domain registration fees, the
National Science Foundation created the fund as
part of its agreement with Network Solutions to
administer the official U.S. registry for top-level
domains, such as those ending in ".com" and ".net."

The agreement will expire between March and
September of next year, but over the past five
years, Network Solutions was supposed to have
deposited 30 percent of every $100 domain
registration fee into the account. In addition, the
"intellectual infrastructure fund" is earning several
million dollars in interest each month, according to
the NSF.

During last month's House Science Committee
hearings on the future of the domain name system
(DNS), the fate of the intellectual infrastructure fund
was often the central focus as Congress members
wondered how the money would be spent.

As part of a huge appropriations bill sent to
President Clinton last week, Congress earmarked
$23 million of the fund for the NSF in carrying out
the White House's Next Generation Internet (NGI)
initiative. The NGI aims to create advanced online
applications and route data at 1,000 times the
speed of today's Net. Backers have been struggling
to garner $100 million for the plan, which is about
$5 million short now.

"When that account was initially set up, no one had
specifics in mind as to how it would be used
exactly," said Beth Gaston, a spokeswoman for the
NSF. "The Next Generation Internet fits with our
goal."

In the past, Network Solutions submitted proposals
for the fund's use. An ad hoc group that plans to
compete with the registrar when its contract expires
had also asked Congress for a piece of the money
pie.

"We did ask for a small percent for the setup of our
global registrars, but I don't expect anything from
them," said Donald Heath, president and CEO of
the Internet Society, which is pushing an alternative
domain name registration system that would be run
out of Switzerland. More than 50 companies have
already applied to become registrars.

Although the NSF never touched the money, there
are questions about whether Network Solutions
will owe payments to the fund when the contract
expires. The NSF inspector's office released a
report in February stating that by September 30,
1998, Network Solutions would owe $120 million
to the fund based on the estimated $400 million it
should have collected by that time in registration
fees.

However, the money may not be there if Network
Solutions fails to collect delinquent registration fees
or renewals. "This is the minimum estimate of
available funds because Network Solutions is owed
additional fees for domain name registration," the
inspector's report stated. "If a person or entity
registered or renewed a domain name, then it is
obligated to pay, and under the terms of the
cooperative agreement, Network Solutions is
obligated to collect. Accordingly, this revenue is
owed to the pool."

The NSF's inspector plans to audit the company
when the contract expires. "The account is 100
percent current," Network Solutions spokesman
Christopher Clough said today.

Now that the multimillion dollar account is on
Congress's radar screen, there is no doubt the
government will be counting every penny while
dreaming up more ideas for its use. "A pot of
money sitting out there is always vulnerable," said
one Congressional staffer.