VeriSign may be able to offer differential pricing for .net domain names under the just-published draft .net registry contract.
The current .net agreement expires at the end of June, but VeriSign has a presumptive right of renewal.
The newly negotiated contract has a new “Special Programs” clause would enable VeriSign to offer pricing incentives to registrars in “underserved geographies” not available to other registrars.
Here’s the meat of the paragraph:
Registry Operator may for the purpose of supporting the development of the Internet in underserved geographies provide training, technical support, marketing or incentive programs based on the unique needs of registrars located in such geographies to such registrars, so long as Registry Operator does not treat similarly situated registrars differently or apply such programs arbitrarily. Registry Operator may implement such programs with respect to registrars within a specific geographic region, provided, that (i) such region is defined broadly enough to allow multiple registrars to participate and (ii) such programs do not favor any registrar in which Registry Operator may have an ownership interest over other similarly situated registrars within the same region.
Later, the part of the contract that limits VeriSign’s registry fee and requires uniform pricing among all registrars has been amended to specifically exclude these special programs.
The contract does seem to envisage differential registrar pricing, within certain geographic parameters, perhaps enabling VeriSign to stimulate growth in low-penetration markets.
It’s probably too early to speculate, given that we don’t know what incentives VeriSign has in mind, but it’s not difficult to imagine a scenario where particularly attractive pricing could cause a bunch of shell companies to emerge in, say, Africa or Asia.
For now, the provision would only apply to .net domains, but VeriSign has been known to use .com as a venue for dry runs of services it wants to offer in .com. The .com contract is up for renewal next year.
There’s a provision for VeriSign to be able to “prevent” the registration of certain names, such as those that would have led to the Conficker worm spreading, in order to protect the security of the internet.
Some of the things that have not changed are also quite interesting.
With ICANN’s recent “vertical integration” decision, which will allow registries and registrars to own each other, you’d think the .net contract renegotiation would be the perfect opportunity for VeriSign to signal its intentions to get into the registrar business, as Neustar already has.
But it has not. The contract contains the same prohibitions on cross ownership as the earlier version.
And as Domain Name Wire noted, the new contract would allow VeriSign to continue to increase its prices by 10% every year until 2017.
That could lead to a maximum of about $9 per domain per year, including ICANN fees, by the time the deal is next up for renewal, if VeriSign exercised the option every year.
There’s an ICANN public comment period, open until May 10.