VeriSign will continue to operate the .com Internet top-level domain registry until 2007, while giving up control of the .org registry next year and putting the operations of the .net registry up for open bids in 2005.
Under an agreement announced by the US Department of Commerce, the changes are being made to revise the original contract signed in November 1999 between VeriSign and the Internet Corporation for Assigned Names and Numbers (ICANN), the organisation responsible for managing the Internet's domain-name system. The Commerce Department approval was the final step of the deal.
Brian O'Shaughnessy, spokesman for VeriSign, said the amended terms reflect changes that have occurred in the online world since the original contract was signed. This assumed that competition would develop slowly, but the market grew far more quickly than anticipated, requiring amendments to the original deal, he said.
"This new agreement allows clarity for VeriSign to do its job," O'Shaughnessy said. "Now we have a clear set of terms by which we can do our business."
Originally, the company was to maintain control of the .com, .org and .net registries through to 2007.
In March, however, a series of amendments was proposed in which VeriSign would give up the .org and .net registries early. ICANN gave its approval for the proposed changes in April.
However, sceptics said that the conditions were too favourable for VeriSign and objected to the contract language that gives VeriSign "presumable right of renewal" for the .com registry when the deal expires in 2007.
Under the new deal, VeriSign will turn over the .org registry next year to a non-profit group, along with $5m (£3.5m) to help continue its operations.
In 2005, when the .net registry agreement expires, VeriSign will have to compete with other bidders to keep it. If the growth of the .net registry fails to meet specified goals, VeriSign could lose control of it in 2003, according to the terms of the new agreement.
Commerce Department general counsel Ted Kassinger said his agency "sought changes to promote competition, preserve stability and protect consumers. We believe that our objectives have been met."