UPDATE 1-US government signs pact with Internet domain body

Wed Sep 30, 2009 6:17pm EDT

* Pact draws praise from lawmakers companies, governments

* ICANN will be subject to periodic reviews

* U.S. will maintain relationship with ICANN (Adds ICANN, Google, comments; details, background)

WASHINGTON, Sept 30 (Reuters) - The U.S. government and the body in charge of assigning Internet addresses signed an agreement on Wednesday that allows for greater global participation in the Internet domain name process.

The U.S. Commerce Department said it reached an agreement with Internet Corporation for Assigned Names and Numbers (ICANN), drawing praise from U.S. lawmakers, who wanted more trademark protections, and companies and international officials seeking greater independence from U.S. control.

The agreement, which allows ICANN to become a "private sector led organization," subjects ICANN to periodic reviews by a panel that includes a U.S. representative and independent experts, essentially allowing the organization to no longer report solely to the United States.

Ending an 11-year partnership with the U.S. Department of Commerce, the pact also provides stability for companies such as Verisign Inc (VRSN.O) and Go Daddy that sell domains and maintain extensions like ".com".

It also comes months after the European Union said ICANN should be delinked from the U.S. government and made fully independent.

"The pie actually became bigger" for greater involvement from other governments, said Larry Strickling, administrator of the Commerce Department's National Telecommunications and Information Administration, who signed the agreement.

Before the signing the U.S. government wanted certain conditions -- largely driven by concerns from lawmakers -- to be met, including keeping ICANN a nonprofit organization headquartered in the United States.

In support of the deal, U.S. Representative Rick Boucher, chairman of the House Energy and Commerce Subcommittee on Communications, Technology, and the Internet, said ICANN has promised it will address various issues, including consumer protection and trademark matters, before implementing new domain names.

"This agreement gives international stakeholders an even more powerful voice in our activities moving forward," ICANN Chief Executive Rod Beckstrom said in a statement.

Set up in 1998, ICANN was operating under the aegis of the Commerce Department, an arrangement that raised concerns by some that said the Internet is not seen as belonging to a wider global constituency. It decides on what names can be added to the Internet's top level domains (TLDs) such as .com as well as country designations.

The California-based organization has been in the spotlight over whether or not it should include .xxx for pornographic Websites. In 2007, it rejected a petition to include that extension as a TLD.

In 2008 Internet regulators voted to relax rules on domain names such as .com or .edu, paving the way for companies or individuals to create an array of new addresses for the Web.

Under the new system, individuals, companies or groups could apply to have any string of letters established as a domain name. It could be a vanity name, for example -- .smith -- or a category name such as .sports or .perfume.

A company could also change its domain to reflect its brand, so Apple.com could become Apple.mac, for instance.

Vint Cerf, Google Inc's (GOOG.O) vice president & chief Internet evangelist -- known as the "father of the Internet" --said the pact fulfills a long-standing objective which is to "create an organization that can serve the world's interest in a robust, reliable and interoperable Internet."

Even with the looser relationship, the U.S. government will take part in reviews of ICANN, which is expected to start taking hundreds of applications for new TLDs early next year.

A survey conducted by the Future Laboratory earlier this year showed that two-thirds of businesses were unaware they will be able to use their own name in place of domain extensions such as .com, .org or .net when Internet domains are liberalized next year.

With a fee of more than $100,000, applications are expected to be limited to large corporations and organizations.

Key U.S. lawmakers who had previously raised concerns praised the agreement.

Boucher said the agreement will ensure transparency and accountability from ICANN and include periodic reviews of ICANN's performance.

The European Union also welcomed the agreement. "This is a significant positive move towards a new and more open 'working environment' for ICANN and this document provides a good basis for further improvements," Swedish Infrastructure Minister Asa Torstensson said in a statement.

(Reporting by John Poirier; Editing by Richard Chang)