A newly formed lobbying group is challenging the settlement agreement VeriSign struck last month with the ICANN, the regulatory group that oversees the Internet's technical infrastructure.

The Coalition for ICANN Transparency (CFIT) filed suit in US District Court in San Jose, California, alleging anti-trust violations and illegal competitive acts on VeriSign's part, abetted by ICANN. The group is asking the court to invalidate the settlement arrangement between VeriSign and ICANN and order the two organisations to stick with the terms of their current .com domain operation until its scheduled expiration in 2007.

VeriSign and ICANN ended nearly two years of legal wrangling with a deal last month that laid the foundation for establishing processes to smooth interactions between the DNS's (Domain Name System) overseer and one of its key services providers. The October agreement extends VeriSign's contract to operate the .com domain name registry up to 2012 and sets up a system for rapid ICANN decision making about approval of proposed new VeriSign services.

It's the easing of VeriSign's ability to launch new domain name services that worries Canadian domain-name services company Momentous.ca, CFIT's ringleader. One of Momentous.ca's subsidiaries, Pool.com, filed a lawsuit against VeriSign in 2003 after VeriSign launched a domain wait-list service that directly competed with Pool.com's offerings. Momentous.ca fears that VeriSign's unfettered ability to launch new products would destroy smaller rival vendors.

"VeriSign's conduct makes it abundantly clear that it has no intention of reining in its illegal monopolistic imperialism until it has conquered every market related to Internet domain names," CFIT wrote in its lawsuit. "This is an action to preserve the status quo in markets related to Internet domain names, and to prevent VeriSign from expanding its monopoly control over the .com and .net domain name registries into downstream and adjacent markets."

A VeriSign spokesman cast CFIT's lawsuit as a competitive grievance disguised as an ICANN reform campaign.

"This lawsuit is an effort by Pool.com to hijack the VeriSign-ICANN settlement discussions and block a proposed new service, independent of the settlement, supported by other registrars," VeriSign spokesman Tom Galvin said.

The service Galvin referred to is VeriSign's planned Central Listing Service (CLS), a revised version of the domain wait-list offering that initially sparked Pool.com's wrath two years ago. The planned service, which awaits ICANN approval, would allow registrars to enter customer bids for expiring domain names, with the domain eventually going to the highest bidder. Pool.com runs its own expiring domain service, which attempts to acquire expiring domains customers have requested.

ICANN's staff are travelling this week for an ICANN meeting in Vancouver and could not be reached.

CFIT is a sponsor of that meeting and plans to use it to recruit others to its cause. So far, CFIT's membership consists of Momentous.ca, Pool.com and the World Association of Domain Name Developers, a fledgling industry group.