.Com Domain Name Price Increase Proposal Sparks Outcry

A proposed amendment to VeriSign's registry agreement with ICANN provoked a barrage of negative comments from some stakeholders and a fierce counterattack by the .com registry operator. The consultation, which ended Friday, sought input on a plan to amend the contract to allow VeriSign to raise the price for .com domains by a maximum of 7% annually in years in which there's no other price increase. Foes accused ICANN of, among other things, failing to act in the public interest. In return, VeriSign blasted domain speculators for undermining the process for their own gain.

Besides its registry agreement, VeriSign also has a cooperative agreement with the Department of Commerce for operation of .com, ICANN noted. In October 2018, VeriSign and Commerce agreed on an amendment that permits VeriSign to seek changes to the registry agreement; these are set out in proposed amendment three.

ICANN "is not a price regulator" and has "long deferred" to Commerce and DOJ on regulation of .com prices, it said. Proposed amendment 3 restricts the wholesale price VeriSign can charge registrars for .com registry services, ensuring that if all price increases are instituted (excluding those related to policy and security/stability issues), the initial and renewal prices for a domain can't exceed $10.26 until October 2026.

Despite ICANN assurances, nearly 9,000 commenters opposed the proposal, many via similar messages. In a Feb. 14 response, VeriSign slammed the "troubling attempt by a small but vocal group that sought to hijack ICANN's processes, distort the outcome of this open public comment period, and undermine ICANN's legitimacy, solely to further its own undisclosed pecuniary interests." It accused domain name speculators of waging a "campaign-style effort to flood ICANN with public comments created by form-letter generators and templates created for the sole purpose of protecting their own financial stake in the speculation business."

Namecheap, which VeriSign alleged is a speculator, argued that wholesale price increases will allow .com rates to rise by 70% in the next decade, likely paid for by registrants. ICANN and VeriSign agreed in 2016 to cap the .com wholesale price at $7.85 through 2024, and it's not clear why ICANN is allowing this early amendment, "which only benefits a multibillion dollar company and its shareholders, to the detriment of Internet users (including the 144 million .com domain name registrants)."

"While it might appear counterintuitive for a registrar and its registrants to embrace higher pricing, many of our clients appreciate the deterrent value of higher-priced domain names to would-be bad actors," registrar MarkMonitor said. But it urged "caution and restraint" when hiking prices in high-volume top-level domain .com, saying even a modest increase across the volume of domains "would represent a significant expense."

Several ICANN constituencies also weighed in. The Business Constituency "has no practical objection to price increases that average just 4.5% per year for businesses who register .COM domains," but some of its members "are concerned that VeriSign has not provided justification" for higher prices. The Registrar Stakeholder Group urged ICANN to conduct an economic study "of whether competition can effectively constrain prices." The Intellectual Property Constituency said registries shouldn't be allowed to set prices either so low that they enable systemic illegal activity by registrants or so high they harm intellectual property rights holders. An ICANN staff report on the proposal is expected March 6, with board action to follow.