The U.S. Commerce Department and a California-based group charged with managing Web site domain names announced Wednesday that they have severed an 11-year partnership, putting the U.S. government's stamp of approval on a private-sector model for directing the Internet.

The Commerce Department still will play an active role in deliberations of the Internet Corporation for Assigned Names and Numbers, or ICANN.

ICANN performs a critical function for companies like Verisign Inc. (VRSN) or NeuStar Inc. (NSR) that manage Web domains. Versign is keeper of the most popular Web suffix, ".com." NeuStar manages ".biz."

E-commerce firms also are dependent on ICANN to ensure that Web traffic is directed to them, as well as companies like Go Daddy Group Inc. that sell Web site names.

The Commerce Department and ICANN have now entered into an "affirmation of commitments" in which the parties pledge to "a multi-stakeholder, private-sector-led, bottom-up policy development model" for the Internet, according to the new agreement.

Commerce will be actively involved in ICANN's activities as a member of the group's Governmental Advisory Committee.

ICANN asked that the previous joint-partnership agreement with Commerce be eliminated. The pact had been renewed multiple times since it was originally drafted in 1998.

"This completely confirms that after a decade of very careful study and review, the U.S. government is confident that the private-sector model, as enshrined by ICANN, is the right one," said John Kneuer, a former Commerce Department official who oversaw the last renewal of the ICANN agreement.

Kneuer said private-sector entities should now work with ICANN to "support its mission in maintaining the stability and security of the Internet."

"The first significance of this is that [ICANN] truly is independent. It should be music to the ears of the global Internet community," said Steve DelBianco, executive director of Net Choice, a coalition of e-commerce and online services. DelBianco also leads ICANN's business constituency.

ICANN executives say the group will to abide by its core principles -nonprofit, private and U.S.-based. Critics have questioned whether ICANN's decision-making process is transparent enough and sufficiently accountable to the global Internet community.

ICANN was set up in 1998 by the U.S. government to oversee the technical underpinning of the Internet, including establishing country-code domain names and Internet-protocol addresses.

A separate, permanent Commerce Department contract with ICANN gives the independent nonprofit group management of the master files of the domain name system. ICANN also manages and coordinates the allocation of Internet protocol addresses.

-By Fawn Johnson, Dow Jones Newswires; 202-862-9263; fawn.johnson@dowjones.com