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ICANN urged to reject .com price increases

Kevin Murphy, November 21, 2018, 11:35:36 (UTC), Domain Registries

The Internet Commerce Association has asked ICANN to refuse to allow Verisign to raise its wholesale prices for .com domain names.

The domainer trade group wrote to ICANN last week to point out that just because the Trump administration has dropped the US government objection to controlled price increases, that doesn’t necessarily mean ICANN has to agree.

Verisign’s deal with the National Telecommunications and Information Administration “does not of course, compel ICANN to agree to any such increases. Any such decision regarding .com pricing
remains with ICANN” ICA general counsel Zak Muscovitch wrote.

The deal allows Verisign to increase the price of .com registrations, renewals and transfers by 7% per year in four of the next six years, leading to a compound 30% increase by the time it concludes.

The arguments put forth Muscovitch’s letter are pretty much the same as the arguments ICA made when it was lobbying NTIA to maintain the price freeze.

Namely: Verisign already makes a tonne of money from .com, it has a captive audience, it cannot claim credit for .com’s success, and .com is not constrained by competition.

“As NTIA makes clear, it is up to Verisign to request a fee increase and ICANN that may agree or disagree. ICANN should not agree. Indeed, it would be a dereliction of ICANN’s responsibilities to the ICANN community if Verisign were permitted to raise its fees when it is already very well paid for the services which it provides,” Muscovitch’s letter (pdf) concludes.

For many years ICANN has been reluctant to get involved in price regulation. It remains to be seen whether it will make an exception for .com.

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Comments (5)

  1. Mark Thorpe says:

    I would be shocked if ICANN did not allow Verisign to increase .Com prices.

    • Rubens Kuhl says:

      ICANN already allowed the last time, with NTIA blocking the raise.

      • Tim says:

        Rubens,

        Oh, the irony.

        You are correct. Both ICANN and VeriSign negotiated the 2012 .COM Registry Agreement and sent the proposed changes to NTIA for review and approval in 2012. Terms included:

        —-VeriSign can increase .com prices by 7.0% in 4 out of 6 years of the contract from the $7.85 price

        —-ICANN receives $0.25 from VeriSign for each .com registration, renewal or transfer (roughly $8 million extra cash per year)

        However, upon review by the NTIA, Lawrence Strickling, initiated an Inter agency review and determined VeriSign was making too much money and froze wholesale .com prices at $7.85 each. Mr. Strickling concluded consumers would benefit by freezing .com prices.

        Kevin Murphy commented, “It’s also an embarrassment to ICANN, which seems to have demonstrated that it’s less capable of looking after the interests of registrants than the US government.”

        Now in one of the most puzzling and confusing announcements to hit the DNS Industry, the NTIA amended the Cooperative Agreement and is allowing VeriSign to increase prices even further – without justification. The new .com price hike can happen as early as 2020.

        But this directly contradicts the current .COM Registry Agreement which has .com prices frozen at $7.85 through 2024.

        What a complete mess!

        Sources:
        http://domainincite.com/11156-breaking-verisign-loses-right-to-increase-com-prices
        http://domainincite.com/9845-icann-to-get-8-million-more-from-new-com-deal
        https://www.internetcommerce.org/dotcom_price_freeze/

  2. Tim says:

    Let’s focus on the most important question at hand:

    Just who exactly owns the .com registry?

    ICANN as a trustee on behalf of the community, or Verisign, the technical services operator?

  3. Richard Funden says:

    If they did, Verisign would just trigger the mother of all law suits and ICANN would fold like a hand of cheap cards.

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