A judge in Washington DC has ruled that the part of the domain name registration fee put aside for developing the internet’s infrastructure is an illegal tax; a move that could lead to its refund. From September 1995 when fees were introduced until March 31 this year, $30 of the $100 fee to register a domain in the .com, .net, .org and name spaces was set aside in an Intellectual Infrastructure Fund which contains about $50m. The case was bought by Washington lawyer William Bode against Network Solutions Inc (NSI), which ran the registry, and the federal National Science Foundation (NSF), which granted it the exclusive five year contract to do so. The fee is unconstitutional, according to Judge Thomas Hogan, because its collection was authored by the NSF, not by an act of Congress. He has held back ordering a refund of the money at the moment until he decides whether or not to certify the lawsuit as a class action, which would mean that everybody and every company who has registered a name between 1995 and April 1 will get their $30 back, plus $15 if they renewed during that time. A pleased Bode told us he expects the class certification process to take anything between three and five months. The judge has to decide whether all the domain name registrants constitutes a class. The NSF-NSI contract expired on March 31, but has just started a six-month transition period during which the additional money is not collected and the fee has dropped to $70. Fees were not introduced for domain name registration directly through the InterNic, as the service is known, until September 1995. The ruling was not entirely unexpected because Judge Hogan had already issued a preliminary injunction in February, which had frozen the fund, preventing the NSF from spending any of the money (CI No 3,342). In October last year the Congressional appropriation committee that oversees the NSF instructed the NSF to release $23m of the fund help fund President Clinton’s so-called next-generation internet project. Bode had a wider case specifically against NSI, which alleged that the $70 part of the fee which represented a profit for the company after its costs had been taken care of, was also illegal and should be refunded, but Hogan dismissed that claim. Bode said he didn’t think the NSF would appeal, although they have the right to do so, as does he over the separate NSI issue, although he says he has not considered whether or not he is to appeal that. The ruling was expected a few weeks ago, but the judge needed more time to decide because he felt the lawyers for the NSF had not explained the case to him sufficiently and he asked NSI to do it for him instead. Bode has established an organization called the American Internet Registrants Association (AIRA) under whose auspices the case was brought.
