[The deal] doesn't do anything for the Internet community

Karl Auerbach, A critic on the Icann board

The company will turn .org over to a competitor after 2002 and will submit .net for competitive rebidding in early 2006.

The Internet Corporation for Assigned Names and Numbers (Icann), which brokered the deal with Verisign, called it "a significant improvement over the original agreement negotiated in 1999".

Approval came in a private conference call. The vote was 12-3, with one abstention. The changes still need the approval of the US Commerce Department, which chose Icann in 1998 to set policies on domain names.

The Department rarely overturns decisions by Icann.

Database management

Verisign currently runs the master databases for addresses ending in all three suffixes.

With the new deal, one organisation will be given the job of administering the central list of a particular suffix, such as .org. Many other companies will continue to sell rights to internet users wanting to have specific domains.

Under the new deal, Verisign also gets preferential treatment for the renewal of the .com contract beyond 2007. It does, however, face penalties if it fails to separate running the databases from its registrar business that sells rights.

Lack of separation between the two businesses would have given the company an advantage over competitors.

Verisign has also promised to spend $200m on research, development and related improvements.

Little input

However, some competitors have still seen the new deal as a windfall for Verisign, complaining that it was negotiated with little input from the internet community.

The .com registry is a lucrative business for Verisign, which gets $6 per name each year, regardless of whether Verisign or one of its competitors handles the registration.

One of the critics on the Icann board, Karl Auerbach, said the deal "doesn't do anything for the Internet community. There's nothing to drive down the fees".

In the past, Verisign has been criticised because it controls so many of the most popular net domains. Verisign's control over these domains dates from the days when the internet was a largely US phenomenon.

Changes ahead

Although Verisign maintains the master list of .com domains and where they are, it registers less than 50% of them.

Under an agreement drawn up in 1999, Verisign had until 10 May to divest itself of half its domain registry business.

The 1999 agreement was drawn up when the booming popularity of the internet forced the US Government to bring in measures to change the way that the net was overseen.

There are more than 21 million .com names claimed, compared to four million for .net and three million for .org.

Icann is also considering a plan to restrict the organisations using .org to non-profit groups only.