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Last week, ICANN announced that Verisign, the private company that administers the .com domain, will be allowed to raise prices by more than 70 percent over the next decade. Domain registrarscompanies that help the public register domains and must pass along these escalating feesaren’t happy about it.
“ICANN and Verisign made these changes in secret, without consulting or incorporating feedback from the ICANN community or Internet users,” registrar Namecheap wrote in a blog post. “Namecheap will continue to lead the fight against price increases that will harm our customers and the Internet as a whole.”
On Sunday, my Ars Technica colleague Kate Cox got a notification from her registrar, Dynadot, warning that “price increases on the registry level unfortunately result in price increases at Dynadot.”
To register a .com domain on behalf of a customer, a company like Namecheap or Dynadot must pay Verisign a $7.85 fee. Registrars typically add a few dollars on top of this fee, but fierce competition among registrars limits their ability to raise prices. But Verisign itself doesn’t have competitors; if you want to register a .com address, you have to do business with Verisign.
To prevent Verisign from abusing this monopoly, ICANN caps the fees Verisign can charge.
The new contract allows Verisign to raise the current $7.85 price by 7 percent per year over the next four yearsfar faster than expected inflation over that period. Verisign would then be required to keep prices flat for two years before it could begin another four-year cycle of 7 percent annual price hikes. Add this all up, and the price of a domain registration could rise 70 percent to $13.49 by 2030. If inflation stays near the Federal Reserve’s 2 percent target during that period, Verisign’s inflation-adjusted revenue will rise by about $4 per domain, per year.
That would represent a massive windfall for Verisign because according to Namecheap, there are more than 140 million .com domain names registered. So Verisign would reap more than $500 million in additional revenue, each year, for running the .com registration database.
The price hikes appear to be part of a broader ICANN domain to allow higher registration fees across the domain-name system. Last year, ICANN faced a backlash after it eliminated price caps for the .org domain, which is administered by a non-profit called the Public Interest Registry. During a public comment period on the change, more than 3,200 people opposed the change, while only six supported it.
ICANN and the Internet Society faced an even bigger backlash a few months later when PIR’s parent company, the Internet Society, announced it was selling PIR to a private equity firm with close ties to former ICANN officials. But despite widespread public outrage, the Internet Society has pushed forward with the proposal.
While ICANN has eliminated price caps on .org and most other top-level domains, it doesn’t currently have the option to do that for .com. That’s because ICANN and Verisign’s oversight of the .com domain is itself overseen by the US Department of Commerce. Indeed, ICANN argues that it is merely complying with the wishes of the Department of Commerce, which authorized ICANN to raise the price caps by 7 percent annually back in 2018. ICANN would need approval from the Commerce Department to institute larger increases than the ones that have already been announced.