Groups make flawed case that .com is a cartel

Three pressure groups in the US have called on the government to strip Verisign of its .com contract, saying the company is operating as a “de facto cartel” with ICANN that has allowed its shareholders to milk the public for billions.

But their argument has a pretty significant hole in it, based on an apparent misunderstanding of how Verisign funds ICANN.

The American Economic Liberties Project, the Demand Progress Education Fund, and the Revolving Door Project have written to the Department of Justice and National Telecommunications and Information Administration to demand that they “cut off” Verisign.

The NTIA is the third party in the triumvirate with ICANN and Verisign that controls who gets to run the immensely powerful .com TLD. It’s the NTIA that gets to decide whether Verisign is able to raise its registry fees, how often and by how much.

The Obama administration froze the fee for its last six-year run, but the caps were lifted under Trump, giving Verisign four 7% increase options over the current six-year deal, all of which it has chosen to exercise.

The price of a .com registration or renewal has gone up from $7.85 in 2018 to $10.26 later this year. Verisign enjoys some of the highest profit margins of any public company in the US as a result, with much of its cashflow diverted into share buybacks.

This has to stop, and the .com contract should be open for bidders, the three groups said in their letters:

Ending this contract will force the initiation of a competitive open-bidding process, ultimately bringing down costs for those who must register a domain name. ICANN and VeriSign function as a de facto cartel and the NTIA should stop sanctioning the “incestuous legal triangle” that serves as a shield to deflect overdue antitrust scrutiny into their otherwise likely illegal collusive relationship.

While the letters raise many good points, they’re the same good points that have been raised every few years for the last quarter century. The US government response seems to depend entirely on whether the current occupant of the White House wears a blue tie or a red tie.

Where the argument is flawed is in the statement: “ICANN has a vested interest in VeriSign making as much money as possible, as VeriSign pays ICANN for each annual domain name registration.”

This is not quite correct, as ICANN’s current financial problems can attest.

In reality, while it is true that Verisign is by far the biggest contributor to ICANN’s budget, the dollar value is tied not to how much money Verisign makes, but to how many registrations and renewals it processes.

ICANN gets a quarter for every domain-year, basically, regardless of whether Verisign charges $7.85 or $10.26, so ICANN’s vested interest is in Verisign selling as many domain-years as possible, not its bottom line. If .com shrinks, so does ICANN’s budget.

And that’s exactly what has happened over the last couple of years. As Verisign’s prices have gone up, volume has started to go down, first in China and more recently in the US.

While I don’t believe the company has explicitly linked its volume decline to its price hikes, it’s said that a solution to the problem is new promotional activities later this year, so draw your own conclusions.

ICANN’s budget has taken a hit as a result. The Org said in April that it was looking at an $8 million shortfall and last month said it was laying off 7% of its staff to try to save $10 million.

The fact that it’s just canned 33 staff is pretty decent argument against the cartel claim, and I expect it to form part of ICANN’s response.

The three groups’ letters may be on more solid ground with its claim that ICANN has enjoyed a “$20 million cash bonus” that they describe as a share of Verisign’s “ill-gotten rent to maintain its market power.”

That’s a reference to the $5 million a year for five years additional payment that Verisign agreed to when it renegotiated its registry contract with ICANN in 2020.

Nominally to help fund ICANN’s DNS “security and stability” efforts, the optics of this side deal have always been terrible, the granularity of the accounting transparency has been criticized as lacking, and I’ve frequently referred to the payment as a “bung”.

But that payment is strictly bilateral and not part of Verisign’s deal with NTIA.

The NTIA arrangement has presumptive renewal of six-year terms, but NTIA can revoke it with 120 days notice. That means it will have to act before August 2 if it decides to terminate Verisign’s contract.

You can read the letters in full here.

A dot-brand so unloved they killed it twice

Indian consumer goods firm Dabur has told ICANN to turn off its dot-brand for the second time, having had second thoughts a few years ago.

The company, which mainly sells Ayurvedic alternative medicine products, had originally asked for its registry contract for .dabur to be terminated in 2021, but changed its mind shortly before ICANN actually pulled the trigger.

As I noted at the time, dabur.com popped up a prominent fraud warning when people visit the site, urging people to only trust dabur.com to source its products.

There was a dot-brand business case right there, but evidently Dabur couldn’t find it. The fraud pop-up still appears today, three years later.

The gTLD did have a few registered domains, but my records show no zone file activity since 2017.

Unstoppable plotting manga-themed gTLDs

Another two likely new gTLD applications have emerged from the blockchain world.

Unstoppable Domains yesterday announced it’s planning to apply for ICANN for .manga and .anime Kintsugi Global, which already operates the two namespaces on a blockchain.

The two domains currently sell via Unstoppable for $80.

Secret new gTLD application revealed

Unstoppable Domains has revealed the next partner with which it intends to apply to ICANN for a new gTLD two years from now.

It’s linked up with Secret Network Foundation to apply for .secret and in the meantime to flog .secret names that only work on its Polygon blockchain naming system.

Secret is a startup that develops privacy-oriented, blockchain based applications.

It’s the sixth likely new gTLD application Unstoppable has announced this year.

DotMusic delays gTLD launch again

DotMusic has pushed it general availability launch date out by more than three months, as it tries to recruit anchor tenants from the music industry.

The registry says GA is now planned for October 8, versus a previous date of June 25.

The gTLD is currently in its “community organization phase”, during which musicians and industry entities can claim their matching .music domains after completing a rigorous identity verification process.

DotMusic has offered up to a million domains for free via participating partner organizations.

The registry announced this week that it has partnered with a company called Shufti Pro on registrant ID verification.

.tm prices to skyrocket next week

Already-expensive ccTLD .tm is set to see its prices rocket by hundreds of dollars next week, with an annual registration set to cost $1,000 or more.

.TM Domain Registry says a one-year registration or renewal will cost registrars $400, which can be reduced as far as $200 if they register more than 100 domains. Currently, the price is $80, according to tldpricechanges.com.

The recommended retail price will be $1,000, the registry says. The increases come into effect June 1.

The registry is also scrapping its practice of requiring all registrations to be for 10 years, adopting the industry standard of one to 10 years instead.

Today, the cheapest retail price I was able to find was $1,200 for a 10-year reg. After the increase, we could be looking at closer to $12,000 for the same service.

.tm is the ccTLD for Turkmenistan, but the registry has been run from the UK and owned by Paul Kane, the same person who ran .io before selling it to Identity Digital a few years back, since the 1990s.

Bitcoin gTLD gets launch dates

Orange Domains has announced the launch schedule for .locker, a real gTLD that nevertheless has support for the Bitcoin protocol built in.

Sunrise is set to kick off next month, running from June 19 to August 20, shortly followed by a “Pioneer Program” in which the registry will seek out anchor tenants for marketing purposes.

General availability is set for September 26, following a week-long Early Access Period. Prices have not yet been published.

.locker is a proper DNS gTLD, but Orange Domains intends it to be compatible with apps, such as cryptocurrency wallets, that run on the Bitcoin Name System protocol.

The registry is a joint venture of Trust Machines, Tucows, and Hiro Systems.

.locker was originally owned by the satellite TV company Dish DBS, which it had intended to use as a dot-brand, but it was never used and sold off to Orange last year.

First metaverse gTLD is announced

Unstoppable Domains has announced plans to apply for the first gTLD devoted to a metaverse.

The company has partnered with Metropolis, a “a 360° curated universe that blends commerce, gaming, and experiences that span both digital & physical worlds” to launch .metropolis names on Unstoppable’s blockchain.

“Metropolis plans to explore future ICANN gTLD applications in order for .Metropolis to become even more integrated in the digital landscape,” Unstoppable said.

In the meantime, Metropolis expects its users to use the blockchain version of the names to address “virtual real estate within the metaverse”.

I checked out the Metropolis web site, clicked on everything, and have to confess I don’t understand any of it. I feel about a thousand years old.

ICANN preparing for ONE HUNDRED registry back-ends

The number of gTLD registry back-end providers could more than double during the next new gTLD application round, ICANN’s board of directors has been told.

There are currently about 40 registry services providers serving the gTLD industry, but ICANN is preparing for this to leap to as many as 100 when it launches its Registry Service Provider Evaluation Program for the 2026 application round.

“We’re preparing, I think, for roughly a hundred or so applications which will include the 40 existing providers that we’re aware of, and another 60 or so is sort of our rough market sizing,” Russ Weinstein, a VP at ICANN’s Global Domains Division, told the board during a meeting in Paris last week.

The number is based on what ICANN is preparing to be able to handle, rather than confirmed applicants to the RSP program, it seems.

“We are hoping to see some diversification and new entrants into the space,” Weinstein said.

Board member Edmon Chung elaborated that he expects most of the new entrants to be ccTLD registries hoping to break into the gTLD market.

“We can expect a few more ccTLD registries that might be be interested,” he said. “We’re probably not expecting a completely new startup that just comes in and becomes a registry, but beyond the 40, probably a few more ccTLDs.”

ccTLD registries already active in the gTLD market following the 2012 application round include Nominet, Nic.at and AFNIC, which tend to serve clients that are based in the same timezone and use the same native language.

Unstoppable to apply for Women in Tech gTLD

Unstoppable Domains and Women in Tech Global have announced that they plan to apply for a new gTLD when ICANN opens the next application round.

They want .witg, which Unstoppable has already launched on its blockchain-based naming system. They cost $10 a pop.

Unstoppable says the names come with some social networking features, as well as the usual ability to address cryptocurrency wallets.

The company has also recently announced gTLD application partnerships with POG Digital for .pog, Clay Nation for .clay and Pudgy Penguin for .pudgy.

Unstoppable is mainly competing here with D3 Global, which is also recruiting blockchain businesses that want to embrace the DNS when the next round opens.