Domain name brings riches, ripoff worries to islanders
The Associated Press
Tuesday, July 06, 2004
FUNAFUTI, Tuvalu - It took just a bit of alphabet and a jot of punctuation to
pave this island's lone road, to light the village lanes at night, to pay the
rent on an office suite and a UN seat in far-off New York.
Ever since two little letters, "tv," were plucked from the alphabet soup of the
Internet and assigned to tiny Tuvalu, its 9,000 Pacific islanders have been
making the most of it.
Or have they?
Television stations, networks and others with video-heavy websites have been
buying the right to use the island nation's "dot-tv" Internet domain, says Bart
MacKay of California-based VeriSign Inc., which sells the Tuvaluans'
cyber-identity to distributors.
"When we speak with our customers and ask what domain extensions they would like
to sell, dot-tv is at the top of their list," he says.
But the Tuvaluan government may not be getting top dollar for its lucky draw in
the World Wide Web lottery, some islanders are grumbling.
"What do you call it, 'ripped off'?" politician Apisai Ielemia asks a visiting
reporter. "We should not be ripped off by these business-minded companies."
The Tuvaluans themselves are decidedly not business-minded. Traditional, remote,
living on a scattering of sunny atolls midway between Hawaii and Australia,
their chief exports are coconut oil and postage stamps. Co-operatives or the
government run almost everything, from the ramshackle markets to the radio
station. (The land of dot-tv, ironically, has no television.)
Tuvaluans also have been too trusting in the past. In 1979, for example, a year
after the colony gained independence from Britain, an American "real estate"
scammer swindled it out of half its $1-million U.S. reserves.
By 1998, when a Canadian entrepreneur dropped in to regale them with tales of
riches awaiting via the Internet, they consulted U.S. lawyers.
The Geneva-based International Organization of Standards, assigning
country-code, "top-level domain" names on the Internet, had bestowed dot-tv on
Tuvalu, just as it had dealt dot-jp to Japan and dot-fr to France. The Tuvaluans
owned that Web address, and could license it for non-Tuvaluans to use.
With no real marketing plan, the Canadian deal foundered, however, and Tuvalu
reached another deal, with a California company, in 2000. Two years later, that
company sold the new dot-tv Corp. to VeriSign, the powerful outfit that
maintains registries for "dot-com" and "dot-net," the most important Internet
Along the way, the Tuvaluan government collected more than $20 million in
lump-sum payments, from dot-tv Corp. stock sales and other windfalls, and dot-tv
collected tens of thousands of registrants -- from Major League Baseball's
mlb.tv, which streams video of games, to a site called farm.tv, which offers
videos of farms for sale.
The revenue -- about twice as much as Tuvalu's previous annual gross domestic
product -- allowed the islanders to tar the road that runs the length of
slender, sandy, 12-kilometre-long Funafuti; to install road lights; to pay the
$50,000 admission fee to the United Nations, among other things.
Regular cheques came in as well, as Tuvalu's cut in annual registrants' fees: a
guaranteed $550,000 per quarter, plus five per cent of quarterly income over $5
million, with the rest going to VeriSign. As each quarter passed with only the
minimum payment, however, that deal began looking less lucrative.
"We're getting very little," said Amasone Kilei, a member of Tuvalu's 15-seat
Parliament. "It's our property, and we need to get more than the company
operating it -- more than 50 per cent."
Mr. MacKay, at VeriSign, said ordinary dot-tv domains sell for an average $49 a
year, but the most desirable premium names, such as "drugstore.tv," sell for
much more, up to five figures annually.
The current number of registrants is between 190,000 and 200,000, he said. The
previous operator had claimed sales of more than 450,000 domains by December
2001. Aunese Makoi Simati, the government's chief liaison for dot-tv, said
VeriSign must be more open in reporting sales information to Tuvalu.
Meantime, Tuvaluans are looking elsewhere for the next windfall -- toward the
heavens. The government may claim national orbital space from the International
Telecommunication Union, to profit from deals with satellite operators. It's in
negotiation with a potential partner -- again, a U.S.-based company.