Kid-friendly domains could be reborn

With governments around the world increasingly looking at reducing the harmful effects on the internet on children, it seems child-friendly domain name projects may see a resurgence.

The US government’s new hunt for a registry operator for .us, launched this week, contains a fairly explicit call for whichever company wins the contract to “revitalize” the long-dormant .kids.us space.

And I’m aware of one potential new gTLD applicant that wants to apply for a regulated kid-friendly gTLD when ICANN opens up its application window at the end of the month.

The US National Telecommunications and Information Administration said in its .us RFP:

The Contractor shall offer one or more innovative approaches to revitalize the use of the kids.us domain that are consistent with its objective of providing a safe space on the internet for children age 13 or younger, as intended by the Dot Kids Act. In the event a decision is made to reactivate the kids.us domain without any changes to the Dot Kids Act or selection of alternative uses, the Contractor shall be prepared to maintain and operate the second-level kids.us domain as specified by the Dot Kids Act.

It’s not the first time NTIA has tried to get the .us registry operator — now GoDaddy, formerly Neustar — to exhume the .kids.us project, which was closed down in 2012 after fewer than 1,000 registrations and half a dozen active web sites. Prior attempts were unsuccessful.

.kids.us was created by US legislation in 2002, largely as a way for legislators could feel good about themselves in an era when the web was still quite new and frightening and a lot wilder than it is today.

But that was before the dawn of social media and smartphones, the two technology trends driving much of the political focus on child online safety in the 2020s.

At least one new gTLD applicant intends to apply for a child-friendly gTLD this year, known as The Reservoir Project or (preliminarily) the Child Online Safety Association, run by lawyer S Harrison Knudson. The gTLD in question would be .haven.

The early-stage concept would see the registry work patent-pending technology and with ISPs, which would charge customers service fees and split the profit with the registry.

There are already two kid-oriented gTLDs out there — .kids itself and the Russian-language .дети (“.children”).

DotKids launched .kids in late 2022 and has so far accumulated 6,368 domains in its zone file. That’s actually not bad for a niche new gTLD, and based on some of the most uncomfortable Google searches I’ve ever done it looks like the registry is doing a pretty good job of keeping the namespace clean.

.дети has been around longer but has sold fewer domains, with just 1,358 names in its zone file today.

Shrinking .us TLD is up for grabs

The .us ccTLD may change registry operators in the not too distant future, but the domain is currently on a fairly steep downward trajectory in terms of registrations.

There’s also no guarantee that a new operator, should one be selected, would necessarily lead to lower prices for registrants.

The US National Telecommunications and Information Administration yesterday put the .us registry contract out for bidding, with a May 18 due date for offers.

Only the bigger players need apply — NTIA said it will only entertain offers from companies currently managing over two million domains in a single TLD.

That narrows the field quite a lot — only 27 TLDs I have numbers for clock in over two million. Incumbent GoDaddy qualifies, as does Verisign, Identity Digital, and Public Interest Registry.

CentralNic, Tucows, and a handful of non-US ccTLD operators also would be technically eligible, but the NTIA has ruled out any provider that is majority foreign-owned. The successful RSP would have to be fully based on US turf.

But .us has seen its DUM decline in recent months. As of January, it stood at 2,175,340, according to NTIA documents. That’s down from a peak of 2,575,574 just six months earlier, a not-insignificant dip.

On the upside, this is a different type of ccTLD contract to the likes of .ai or .co — the US government doesn’t want a cut of registration fees. The registry gets to pocket the lot.

How much “the lot” is isn’t exactly clear. Prior to 2019, GoDaddy predecessor Neustar was charging $6.50 a year wholesale, but references to pricing are redacted from the current NTIA contract.

So there’s a different pricing dynamic here. Registries competing for the deal can’t rely on bribing the government with a bigger slice of the pie, and NTIA has let it be known that a lower fee is not necessarily a good thing.

The pricing model will have to be in the “public interest” according to the tender. The NTIA documentation states that it will have to balance “the accessibility of .us domains to qualified registrants” and “the safety and security of the usTLD”, adding:

Offerors are advised that the lowest registration fee for a .us domain may not necessarily be in the overall best interest of the administration of the usTLD. The Government may decide to award to a vendor with other than the lowest cost fee structure or other than the highest cost fee structure.

It’s quite possible that the US will choose to stick with GoDaddy, but it’s perhaps worth noting that the current contract still has one unexercised extension option that would let it run until 2029, rather than the current 2027 expiration date.

Verisign gave Trump $100,000

Remember January 20, 2025, about a thousand years ago, when Donald Trump was inaugurated for his second term as President of the United States?

Remember how the dais at the Capitol rotunda was stacked with tech bros including Mark Zuckerberg, Jeff Bezos and Tim Cook, each of whom had authorized million-dollar donations to the Trump inauguration fund?

You will not have seen Verisign CEO Jim Bidzos among the crowd of VIP supporters, but it turns out that’s probably only because his company didn’t cough up enough cash.

The .com registry operator donated $100,000 to the Trump Vance Inauguration Committee, records published Sunday by the Federal Election Commission show.

I’ve searched the disclosure (pdf) for other deep-pocketed domain industry companies and CEOs but couldn’t find any.

The Verisign donation is only a tenth of the size of donations made by Meta, Google and Cook, and is a drop in the ocean compared to the overall size of the fund, which reports put at an eye-watering $245.3 million.

The aforementioned tech bros were accused at the time of making the donations in order to curry favor with the new administration. Some, such as Meta, have since changed their policies to pander to Trump’s sensibilities.

Verisign’s most critical engagement with the US government comes via its Cooperative Agreement with the National Telecommunications and Information Administration, part of the Department of Commerce.

The Cooperative Agreement is the document that cements Verisign’s monopoly over .com and gives it its price-raising powers, currently set at 7% in four out of the six years of the contract’s duration.

The deal was renewed last year and is not due to be renewed under the current Trump administration (unless…). Prices had been frozen for six years under Obama, but Trump reinstated the 7% powers in 2018 during his first term.

But Verisign has also been engaged in talks with the NTIA about downstream pricing — at registrars and domain investors — that have a lot of people worried.

Renewing the agreement last November, the NTIA said that “prices at both the wholesale level and downstream, including prices charged by resellers and substantial markups by warehousers, need to be addressed”.

These talks appear to have stalled due to lack of leadership at NTIA, which is headed by a political appointee. Even 91 days after Trump was inaugurated, the agency does not yet have a confirmed chief.

Adam Cassady, formerly with the Federal Communications Commission, is currently acting assistant secretary, but Trump’s pick as his permanent replacement is Arielle Roth, policy director on the Senate’s commerce committee.

Roth came in for a grilling over suggestions she would use her powers over broadband policy to benefit Elon Musk’s Starlink, but seems to be a shoo-in for confirmation

In Verisign’s most recent earnings call, Bidzos noted that “unregulated retail price increases exceed our wholesale price increases”, adding “we look forward to engaging with our new regulators”.

So what does a hundred grand buy you nowadays? I guess we’ll find out soon.

Verisign has much to be thankful for as .com contract renewed

Verisign went into the US Thanksgiving weekend with a freshly renewed .com Registry Agreement that allows it to keep control of its cash cow for another six years with price-raising powers the US government admitted it is powerless to rescind.

The deal with ICANN does not change Verisign’s price caps — it will still be allowed to raise prices by 7% in four of the six-year term — but it does allow ICANN to raise the fees it charges by an amount linked to US inflation.

ICANN has already said it plans to increase its fees on all other gTLD registries, so it seems certain .com, which raises more transaction revenue than any other TLD, will get the same notice before long.

The deal means cost-conscious registrants have a bit of breathing space; Verisign is only allowed to raises prices in the final four years of its term, which runs from yesterday until November 30, 2030.

So, no more price hikes until September 2026. Due to the required notice period, designed to allow registrants to lock in renewal pricing, we’ll almost certainly hear Verisign talk about a fee increase in early 2026.

The US government, via the National Telecommunications and Information Administration, also confirmed that it has renewed its Cooperative Agreement, which is where the price caps come from, with the company:

NTIA recognizes concerns about current pricing and believes a reduction in .com prices would be in the best interest of the public. We also recognize that prices at both the wholesale level and downstream, including prices charged by resellers and substantial markups by warehousers, need to be addressed. That said, both parties must agree to any changes in order for the Cooperative Agreement to be amended. Over the past several months, NTIA and Verisign have engaged in serious conversations, but, despite our best efforts, we have been unable to agree how wholesale .com pricing should change.

So the status quo remains, at least regards pricing.

The ICANN contract also requires Verisign to act on reports of DNS abuse — malware, botnets, phishing, pharming, and some spam — for the first time, in line with the standard RA signed by all other gTLDs.

A side deal that sees Verisign pay ICANN a few extra million bucks a year and commit to cooperate on DNS security has also been renewed, with a strong implication that it will too become part of the contractual status quo over the coming year.

ICA finally comments on .com pricing talks

With the latest public debate about whether Verisign is ripping off registrants with its .com pricing now into its third month, one voice has been conspicuously absent.

But the Internet Commerce Association, which represents domain investors and domaining registrars, has now publicly called for .com wholesale fees to continue to be capped and Verisign’s profit margins to be tempered.

Issuing a statement late last week, the ICA revealed that it has participated in talks with the US National Telecommunications and Information Administration regarding its upcoming renewal of the .com Cooperative Agreement.

ICA said it is “encouraging NTIA to focus on ensuring that price caps have some relation to both the cost of operating the .com registry and a reasonable, if not healthy operating margin”, adding:

We believe that it in the absence of actual competitive market forces determining price, it is crucial that an economic study be conducted to determine what a reasonable price would be for .com registrations, having regard to the costs of operating the .com registry on behalf of ICANN while also taking into consideration the need to make a reasonable profit from the exclusive license. As a trade association focused on Internet commerce, although we are generally uncomfortable with determining prices by any method other than via a competitive marketplace, this method is the next best thing in the circumstances.

The statement completely ignores Verisign’s attempt to preemptively flip the debate on its opponents when it recently claimed that the true price gouging occurs in the “unregulated” retail and secondary markets.

The .com pricing debate first came back into the public sphere in July, when three campaign groups called on NTIA to cancel the Cooperative Agreement and allow the .com registry contract to be open for competitive bidding.

The agreement, terms of which routinely make their way into ICANN’s Registry Agreement with Verisign, allow the company to raise prices 7% in four of each six-year term, options Verisign habitually exercises.

The result is a .com registry that generates the company operating margins in excess of 60%, returning mountains of cash to investors.

Three Republican lawmakers then raised the issue with NTIA and NTIA later said that it intended to renew the Cooperative Agreement, but that it had invited Verisign to talks focused on pricing.

In apparently coordinated statements, both parties said the talks would also extend to pricing in the retail channel and secondary market, which should have made ICA members nervous.

Verisign even put out a lengthy statement calling out registrars and domain investors for selling .com domains at hugely inflated prices, conveniently ignoring the facts that the registrar market is genuinely competitive and that domainers shoulder the risk that the domains they pay annual rent to Verisign for very probably will not ever sell.

Verisign’s arguments are sufficiently flawed that it’s perhaps surprising on the face of it that ICA’s new statement completely fails to address or challenge them.

The fact that Verisign is prepared to throw its most dedicated customers under the bus without too much fear of retaliation — something it does every time .com pricing comes up for debate — is perhaps indicative of its market power.

It’s the only dealer in town, and it knows it can say whatever it wants about the crackheads who frequent its corner.

US could change .com pricing terms

The US government and Verisign are to enter talks about possible changes to .com pricing.

The National Telecommunications and Information Administration has told the company that it “intends to renew its Agreement with Verisign” but said it welcomed Verisign agreeing to talks that “may include an amendment to the pricing terms”.

The news came in an exchange of letters between NTIA assistant secretary Alan Davidson and Verisign chief Jim Bidzos over the weekend, published last night. Davidson wrote:

NTIA has questions related to pricing in the .com market. We are therefore pleased that Verisign has agreed to discussions regarding .com pricing and the health of the .com ecosystem, including retail and secondary markets. The parties will discuss possible solutions that benefit end-users, both businesses and consumers, and serve the public interest

The Cooperative Agreement between NTIA and Verisign gives the company the right to raise prices by 7% in four of the six years of its term, all of which Verisign exercised in the current run, which ends in a couple months.

The price-rising powers were frozen under Obama administration but reinstated under Trump, giving Verisign masses of extra revenue and huge profit margins, even as .com volume numbers took a prolonged dive.

NTIA’s intervention follows letters from three campaign groups calling .com a “cartel” and inquiries from three Congresspeople.

In response to NTIA’s letter, Bidzos wrote:

We have observed that our capped .com price increases have not always been passed through to benefit end-users and therefore we welcome an opportunity to have this important discussion. We are prepared to consider structures to address this and other issues, including ways to make .com pricing more predictable for the channel as part of it.

It’s clear from this rather tense exchange that the two parties might not exactly see eye-to-eye on their desired outcomes.

Verisign’s position recently has been that .com volumes have been falling in large part because of what Bidzos called the “unregulated retail channel” pumping up prices to increase profit-per-domain over domains under management.

He also pointed out in the company’s most-recent quarterly earnings call that the average price of .coms on the secondary market is $1,600, or 166x the wholesale price.

As some have pointed out, Verisign complaining about profiteering in the channel is the height of chutzpah, given its own mouth-watering margins, which appear to be what it seeks to protect more than anything else.

If Verisign reckons the registrar business is so great, why hasn’t it launched a registrar of its own yet? The company has been legally permitted by the Cooperative Agreement and its ICANN contract to do so for years.

Verisign predicts more gloom as registrars shun .com growth

Verisign has yet again massively downgraded its expectations for .com growth, after it lost almost two million domains in the second quarter.

The company said it had 170.6 million .com and .net domains at the end of June, down 1.8 million compared to Q1 and a 2.2% decrease compared to a year earlier.

CEO Jim Bidzos said Verisign now expects the domain name base for the full year to be between -2% and -3%. That compares to a range of between +0.25% and -1.75% predicted in April and +1% to -1% predicted in February.

The Q2 renewal rate is expected to be 72.6% compared to 73.4% a year ago and 74.1% in Q1.

Bidzos said he does not expect the base to return to positive growth until the second half of 2025.

Bidzos, talking to analysts, acknowledged that Verisign’s wholesale .com price increases “may have had an impact” but put the blame for the growth shortfall squarely on what he called the “unregulated retail channel” in the US.

American registrars have been cranking up their prices in order to prioritize average revenue per user over volume, he said, meaning retail prices for .com have gone up “more than twice” Verisign’s own price hikes, leading to fewer sales as a result.

“Our research shows that the benefit from our capped wholesale prices is not always passed on to consumers,” he said.

He faced a barrage of questions from analysts about recent calls for the US government to sever its ties with Verisign over .com and put the TLD out for competitive rebidding, but reiterated the company’s position that if the government cuts it off, it still gets to run .com under its contract with ICANN.

Despite the volume woes, Verisign continues to be a high-margin cash-generating machine.

The company reported Q2 net income of $199 million, up from $186 million a year ago, on revenue up 4.1% at $387 million. Operating income was up to $266 million from $249 million and operating cash flow up to $160 million from $145 million.

Republicans quiz NTIA on Verisign .com renewal

Three Republican members of the US House of Representatives have raised the specter of Verisign having to compete to renew its .com deal with the US government.

In a letter to the National Telecommunications and Information Administration, the Congresspeople ask whether NTIA has made any efforts to renegotiate or obtain public feedback on its contract with Verisign.

They also ask whether NTIA has looked at the “effect of the recent price increases implemented by Verisign on the .com domain name marketplace” and “the impact of potential registration price increases on the .com domain name market”.

The Cooperative Agreement between NTIA and Verisign is what allows the company to raise .com wholesale fees. That power was frozen for years under the Obama administration but returned under Trump.

The letter follows missives from three campaign groups a month ago, which called Verisign, NTIA and ICANN a “cartel” that enables Verisign’s monopoly and called for the .com contract to be put out to bid.

The Congresspeople’s letter doesn’t come anywhere close to asking for the same, but it does cite previous instances where legislators and the Department of Justice have called for a competitive bidding process.

Verisign has responded to earlier letters by pointing out that even if NTIA were to cancel the agreement, the .com Registry Agreement with ICANN would still stand.

The letter (pdf) is signed by House Energy and Commerce Committee chair Cathy McMorris Rodgers, Subcommittee on Communications and Technology chair Bob Latta, and Subcommittee on Oversight and Investigations chair Morgan Griffith.

The Cooperative Agreement is set to auto-renew in November. The Congresspeople want answers from NTIA before August 8.

Verisign: would-be .com contract killers are “wrong”

Verisign has responded to the campaign to have the US government cancel its contract to run .com and open the agreement to competitive bidding, saying it is “wrong” and “based on a fundamental misunderstanding” of the deal.

The American Economic Liberties Project, the Demand Progress Education Fund, and the Revolving Door Project put their names to letters last week calling the .com deal between ICANN and Verisign a “de facto cartel” that competition authorities should dismantle.

But, as others have also pointed out, Verisign says that removing the US government from the trilateral agreement would not have the effect the letter-writers believe it would.

In a regulatory filing, Verisign said:

The campaign, and the letters, assert that the 32-year-old Cooperative Agreement between the Department of Commerce (Department) and Verisign involving the .com top-level domain registry can be terminated by the Department on August 2, 2024, and, if it is, the management of .com can be transferred after a competitive bidding process. This assertion is wrong: If the Department chooses to sunset the Cooperative Agreement, which Verisign does not seek, the .com registry will continue to be managed pursuant to the terms of Verisign’s and the Internet Corporation for Assigned Names and Numbers’ (ICANN) valid, enforceable Registry Agreement

In other words, if the US government butts out, all that’s left to regulate .com pricing is ICANN, and ICANN is institutional averse to regulating pricing, believing it would open it up to genuine concerns about cartel-like behavior.

The Cooperative Agreement (pdf) states:

upon expiration or termination of the Cooperative Agreement, neither party shall have any further obligation to the other and nothing shall prevent Verisign from operating the .com TLD pursuant to an agreement with ICANN or its successor

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.