Verisign Gets Green Light To Up .COM Registry Fee In New Registry Agreement

Verisign last week pledged not to increase the registry fee for any of the top-level domains they manage in 2020 as a way of assisting registrants during the current Coronavirus/Covid-19 pandemic. For .com though, that fee is set to increase in 2021 as Verisign got the green light to increase the registry fee in the last four of the six years of the current agreement.

Back in November 2018 the Department of Commerce’s National Telecommunications and Information Administration (NTIA) “agreed to extend and modify the Cooperative Agreement” between the NTIA and Verisign.

According to an NTIA announcement at the time, the “modifications
are in line with policy priorities of the Trump Administration” and repealed “Obama-era
price controls and provides Verisign the pricing flexibility to change its .com Registry Agreement with ICANN
to increase wholesale .com prices. Specifically, the flexibility permits
Verisign to pursue with ICANN an up to 7 percent increase in the prices for
.com domain names, in each of the last four years of the six-year term of the
.com Registry Agreement. The changes also affirm that Verisign may not
vertically integrate or operate as a registrar in the .com top level domain.”

According to the amendment, Verisign is permitted, with
ICANN’s imprimatur, Verisign to increase the registry fee in the years 2020 to
2023, 2026 to 2029 and so on.

Currently the registry fee for .com domain names, the fee charged to Registrars, is $7.85 and with an increase of the maximum seven percent in each of the last 4 years of the current agreement, which will actually commence in 2021, the fee will be around $10.29 by 2024. There were 145.4 million .com domain names at the end of 2019 according to Verisign’s latest Domain Name Industry Brief, making up 40.1% of the 362.3 million domain names registered around the world.

The announcement confirming the increase came in a blog post from Göran Marby, ICANN President and CEO.

Marby wrote “amendments to this Registry Agreement are
carefully assessed and only approved after thorough analysis. This is not a
one-input decision, but one based on ongoing feedback from the Internet
community and in close consultation with the ICANN
Board of Directors.”

The feedback from the internet community included a campaign by the Internet Commerce Association who provided an easy-to-use tool that would ‘take 30 seconds’ for those interested to submit comments, as well as a campaign from registrar Namecheap. According to the ICA, “Verisign’s costs are estimated at between $2.50 to $2.90 per domain name per year. Everything above that is pure profit. Verisign already enjoys one of the highest profit margins of any company in the world.”

Reportedly over 9,000 comments were submitted, mostly from
domain investors, and they seemed to have little impact.

Marby went on to write that he “believe[s] this decision is
in the best interest of the continued security, stability, and resiliency of
the Internet.”

Additionally he writes “the decision to execute the .COM
Registry Agreement amendment and the proposed binding Letter of Intent is of
benefit to the Internet community.”

“For example, the terms of the Registry Agreement technical
specifications will more closely align with those in the Base
gTLD Registry Agreement.
These include a requirement for Verisign to add Domain
Name
System (DNS)
anti-abuse measures to the domain – one of the most discussed topics within the
ICANN
community for years. Specifically, Verisign must now require its accredited
registrars to include provisions prohibiting domains from being used to perpetrate
DNS security threats in the
registration agreements. Verisign must also conduct scans of its zone to
identify domains being used to perpetrate DNS
security threats at least once per month.

“The proposed binding Letter of Intent also provides that
Verisign will contribute US$20 million over five years, beginning on 1 January
2021, to support ICANN‘s
initiatives to preserve and enhance the security, stability, and resiliency of
the DNS. This includes
activities related to root server system governance, mitigation of DNS
security threats, promotion and/or facilitation of Domain
Name
System Security
Extensions (DNSSEC)
deployment, the mitigation of name collisions, and research into the operation
of the DNS. ICANN
org recognizes the request for accountability and transparency regarding how
the funds are used and is committed to full transparency to provide the ICANN
community the appropriate level of detail when available.

“I also want to take this opportunity to clarify ICANN’s
role with respect to wholesale pricing of top-level domains. Let me be clear,
ICANN org is not a competition authority or price regulator.

“We have long-deferred to the U.S. Government Department of
Commerce (DOC) and Department of Justice for the regulation of pricing for .COM
registry services, as per the Cooperative Agreement between Verisign and the
DOC. That hasn’t changed. Verisign continues to be required to provide at least
six months’ notice to registrars of any .COM wholesale price increase. This
allows registrars, on behalf of registrant customers, to register or renew .COM
domain names during the notice period for up to a 10-year total registration
term, at the then-current price, prior to any increase. This allows the ability
to lock-in current wholesale prices for up to 10 years.”

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