Soviet Internet sovereignty

How a RuNet pioneer found himself under criminal investigation and in the Kremlin’s crosshairs

In late December, officials revealed a felony case against RuNet pioneer and former Communications Deputy Minister Alexey Soldatov and his business partners Evgeny Antipov and Alexey Shkittin. All three are charged with large-scale embezzlement, specifically “theft by defrauding IP rights,” which investigators say inflicted more than 500 million rubles ($8.1 million) in damages on the Russian Institute for Public Networks (RIPN). Meduza has learned that the authorities launched the criminal case at the Kremlin’s direct request, at the initiative of Andrey Lipov, who oversees the Putin administration’s office on developing information and communication technologies. Soldatov’s conflict with the Kremlin stems from a fight over the .su top-level domain, first registered in 1990 for the still-standing USSR and still widely used in Russia today. Recently, .su — along with the domains .ru and .рф — became part of the “national domain zone” under Russia’s “sovereign RuNet” law, ostensibly putting them under state control. Historically, however, Alexey Soldatov’s Internet Development Foundation, not the government, has managed these key Russian domains. Meduza's Maria Kolomychenko looks at how it all went wrong.

A RIPN good time

For a long time, the Russian Institute for Public Networks (RIPN) was one of the only organizations developing the Russian Internet (RuNet), performing the technical functions to support its infrastructure and creating computer networks for scientific and educational organizations. RIPN was created in 1992 at the “Kurchatov Institute” National Research Center, where Alexey Soldatov headed the computer center that launched the first online research network, “Relkom,” just two years earlier. (Using the same name, he founded Russia’s first Internet service provider in 1992.)

Early in the decade, RIPN became the first Russian member of the Réseaux IP Européens Network Coordination Center (RIPE NCC), which distributes IP addresses in Europe, Central Asia, and the Middle East. With “local Internet registry” (LIR) status, RIPN was allocated a block of IP addresses that it could distribute (for a fee) to customers in Russia (like telecom operators, hosting providers, and network owners). By early 2019, RIPN had assigned about 490,000 IPv4 addresses to more than 700 clients (mostly scientific and educational groups).

In April 2019, RIPN informed clients that it was terminating its work as a LIR and re-registering their IP addresses in RIPE NCC’s database under a Czech company called “Reliable Communications” (owned by Alexey Soldatov and Alexey Shkittin). This is the deal now at the center of the criminal case against Soldatov and his partners. Months later, after the Kremlin’s intervention, RIPN apologized to customers and announced that it will retain its LIR status and reclaim its IP addresses.

The dissolution that wasn’t

Alexey Platonov, a member of RIPN’s board of directors, told Meduza that the board agreed in December 2018 not just to cease the institute’s LIR activities but to dissolve the organization completely, deciding that its role as an operator of scientific and educational networks is no longer necessary and its commercial operator activity is no longer sustainable. Platonov points out that RIPN had lost several consecutive bids to Rostelecom on government contracts for providing services to state and non-profit groups. RIPN even lost a deal to supply Internet access to its parent organization, the Kurchatov Institute. Meanwhile, assigning IP addresses was always considered to be auxiliary work for RIPN, says Platonov.

Acting on a recommendation from board member Alexey Soldatov, RIPN’s ailing director put Alexey Shkittin in charge of the dissolution process. Shkittin’s job was to phase out the institute’s unprofitable operator activity and transfer its IP-address blocks to a similar organization. He settled on his own Czech business, “Reliable Communications,” and selected Evgeny Antipov’s “Relkom Group LCC” to handle customer network support.

Alexey Platonov says he now recognizes that it was a problem to transfer the IP-address space to a foreign country and acknowledges Soldatov’s conflict of interests, but he still thinks the decision falls short of criminal activity in the context of RIPN’s dissolution. Maxim Burtikov, the external relations director for Eastern Europe and Central Asia at the RIPE NCC, agrees that nothing illegal happened here, arguing that the address blocks allocated to organizations aren’t subject to property law. He says local Internet registries can use these addresses for clients or their own internal purposes, or they can transfer their rights on these blocks to other LIRs.

Sarkis Dabrinyan, Shkittin’s lawyer, says investigators are confused by the fact that Shkittin was simultaneously Reliable Communications’s co-owner and acting RIPN director at the time of the IP-address transfer. But this was perfectly legal and ultimately necessary, says Dabrinyan, in light of RIPN’s hurry to dissolve. Dealing with Reliable Communications and Relkom Group was the “simplest” option, he says, and it averted a scenario where RIPN might have dissolved without transferring its IP addresses, which would have reverted them to RIPE NCC and left its 700 clients out in the cold. Dabrinyan also insists that IP-address blocks aren’t property, meaning that claims of 500 million rubles in damages are nonsense. Russia has no regulations on IP-address transfers or laws that define IP addresses as intangible assets (they can’t be included on a company’s books), so there’s no way to claim that assets were stolen, Dabrinyan says.

Two sources in Russia’s telecommunications industry told Meduza that Andrey Lipov, who oversees the Putin administration’s office on developing information and communication technologies, directly asked the Interior Ministry to review RIPN’s transfer of IP addresses. According to Alexey Platonov, the Kremlin learned in April 2019 about RIPN’s looming dissolution and promptly contacted senior staff at the group’s parent organization, the Kurchatov Institute, which on April 24 demanded a stop to the liquidation process. Months later, in October, RIPN’s board appointed Kirill Izotov as its new director, who set about reclaiming the IP-address blocks from Reliable Communications.

Also in October 2019, Andrey Lipov received letters from the heads of four organizations (the Russian Academy of Sciences’ Fiber Optics Research Center and its Far Eastern Branch’s Computer Center, Kuban State University, and Perm National Research Polytechnic University) complaining that RIPN’s IP-address transfer to a foreign company has raised costs. The head of the Perm National Research Polytechnic University even wondered if transferring such a “valuable and scarce” Internet resource abroad might endanger the RuNet’s research segment. In these letters (obtained by Meduza), the senior researchers asked the Kremlin to transfer their IP addresses to a “competent organization with state participation.”

In a subsequent letter (also obtained by Meduza), Lipov then instructed Izotov to evaluate the legality of RIPN's IP-address transfer and the deal’s potentially destabilization of Russia’s scientific Internet networks.

The IP business

Kuban State University and the Russian Academy of Sciences’ Fiber Optics Research Center told Meduza that they turned to the Kremlin after seeing their IP-address fees spike 10 times under Relkom Group, and they’ve already asked for a new block of IP addresses from their Internet service provider, “Informika.” But it’s probably unfair to accuse Relkom of price gouging.

Meduza obtained Relkom Group’s price quote and showed it to staff at two telecommunications companies, who say the fees are typical for the market. Clients were nevertheless shocked, Platonov says, because RIPN hadn’t raised its address-space fees in several years. Sources at two universities, meanwhile, say the four organizations that reached out to Andrey Lipov in the Kremlin were acting on the encouragement of Informika, a state-run ISP subordinate to the Education Ministry that provides services to research and educational groups.

Informika has prior experience when it comes to litigating IP-address transfers. Three years ago, the outgoing director of its St. Petersburg branch, Yuri Gugel, transferred 300,000 IP addresses allocated to Informika to his own company, “Universal Telecommunications.” The deal eventually collapsed in arbitration, but it demonstrates why apparent conflicts of interest are so common in this industry, and how the authorities are handling RIPN’s case more seriously.

It turns out that Gugel for years paid RIPE NCC fees out of his own pocket to maintain Informika’s rights to distribute these IP addresses. In fact, only individuals — not organizations — can pay RIPE NCC membership fees for LIR status (in 2020, the account fee is 1,400 euros, or about $1,572) and, because of this scheme, staff who pay these fees themselves sometimes transfer the IP addresses to their own enterprises when stepping down, the head of one ISP told Meduza. The RIPN situation is nearly identical to Informika’s incident, but there was no criminal investigation in 2016.

Both Informika and the Kurchatov Institute declined to discuss this article, and Meduza was unable to reach Andrey Lipov.

Why the Kremlin cares

According to RIPN board member Alexey Platonov, the Kremlin got involved not because of the transfer of the IP addresses, but over concerns about the fate of the .su domain, which is considered part of Russia’s so-called “national domain zone” under a new “Internet sovereignty” law.

Another non-profit called the “Internet Development Foundation” — created by Russia’s first two major ISPs, “Demos” and Alexey Soldatov’s “Relkom” — has effectively managed the .su domain since 2001, but RIPN is still listed as the ccTLD (country-code top-level domain) manager in ICANN’s database. In June 2018, according to the SPARK database, the foundation’s founders became Soldatov and Alexey Shkittin. For many years, Soldatov’s wife has also worked as the organization’s director.

First registered in 1990 for the Soviet Union, the .su domain remains popular in Russia today and now hosts more than 111,000 websites. The digital space is large and prestigious enough that Kremlin officials consider it fundamental to Russian Internet sovereignty.

How normal is this thinking?

The Kremlin’s philosophy about ccTLD management isn’t the global norm. Leonid Todorov, the general manager of the Asia Pacific Top Level Domain Association, told Meduza that state agencies don’t usually manage so-called national domains, and insists that these domains are not countries’ property or signs of their sovereignty.

According to one federal official, the potential dissolution of RIPN alarmed the Putin administration because it could have ceded ccTLD management of .su to the Internet Development Foundation, putting the domain in independent hands, in violation of legislation that entered force on November 1 requiring Russia’s so-called “national domain zone” to be coordinated by a non-profit organization founded in part by the state. The Internet Development Foundation doesn’t meet these criteria.

The Russian government has imposed state control over domain zones before. In December 2015, the Communications Ministry became one of the founders of the formerly independent Coordination Center for TLD RU, and Rostelecom later took over for the Technical Center of Internet as the provider of technical support for the domain’s main registries and registration systems.

Not Soldatov’s first rodeo

Around this time, Deputy Communications Minister Alexey Sokolov reportedly reached out to Soldatov and tried and failed to negotiate the transfer of .su management, according to two sources. The Communications Ministry declined to comment on these claims. Multiple industry experts also told Meduza that the Kremlin and officials in Russia’s Communications Ministry have disliked Soldatov for years.

In 2011, Russia’s Federal Antimonopoly Service fined the “RU-CENTER” domain name registrar and hosting provider more than 200 million rubles for anti-competitive practices when registering .рф domains. At the time, Soldatov’s sister was a shareholder in the company, and there were also allegations that Soldatov pressured the Coordination Center for TLD RU to rush new registration rules.

Soldatov’s lawyer, Natalya Davydova, declined to speak to Meduza for this article.

Story by Maria Kolomychenko

Summary by Kevin Rothrock