A look back at the past month in domaining.

Here are the top five news stories on Domain Name Wire in June, ranked by number of views.

1. VeriSign Gets Walloped in Court, .Com Domain Prices Could Fall - a court ruled that a case against VeriSign could go forward. If VeriSign ultimately loses, the cost of registering a .com domain name could drop.

2. Facebook URL Landrush This Friday Night - Facebook opened up vanity URLs. No more facebook.com/13343953212…

3. I Didn’t Get My Facebook URL Because I was Socially Networking - remember that landrush in #2? I missed out, but for a good reason.

4. Business.com Owner Files for Bankruptcy - R. H. Donnelley bought Business.com, but is suffering under a mountain of debt. Don’t look for an auction of Business.com, however. The company is reorganizing.

5. Bill Clinton Loses Domain Name Challenge - in a controversial domain dispute, Bill Clinton lost a challenge to get three domains including williamclinton.com.

With significant bad publicity, a negative court decision, and a watchful eye in Washington, will VeriSign not invoke its full 7% .com price increase this year?

For the past two years, .com and .net registry VeriSign (NASDAQ: VRSN) has increased prices on .com domain names 7% and .net 10%, the maximum allowed under its contract with ICANN. The .com contract allows VeriSign (NASDAQ: VRSN) to increase .com fees 7% per year for four years of each six year term in its agreement. The assumption has always been that it would max out the increases during the first four years of the contract, which would result in the maximum financial benefit.

But that may change. So far this year VeriSign hasn’t announced a price increase, and it is required to give a six month notice of an increase. During VeriSign’s first quarter conference call, President and COO Mark McLaughlin said:

So far we’ve taken two of these increases. And the patentees’ have been thoughtful about the timing of the increases, and I think we should be continuing to do so particularly in life as the impact of an increase could have on sales in this weak economy, as well as some uncertainty in the multiple constituencies that are involved in this industry.

I think VeriSign is going to hold off on increasing prices until next year mainly for political reasons.

Raising prices this year will be politically insatiable. VeriSign may go through a tough antitrust battle thanks to an appeals court ruling last week. It doesn’t want to look greedy in the process.

It is also dealing with Washington this time around. VeriSign was on Capitol Hill last week, sitting right next to ICANN CEO Paul Twomey, testifying about the future of ICANN. The witnesses were asked about the transparency of VeriSign’s current contract. Twomey’s defensive experience as a witness was tough. I doubt VeriSign wants to sit in a special hearing about its price increases. They would be hard to justify.

Finally, Twomey is on his way out and a yet-to-be-determined replacement is on his or her way in. It makes sense to establish a good relationship with that CEO prior to announcing a price increase.

I don’t expect VeriSign to introduce a price increase of less than 7% this year as a solution. The contract seems to read that a 3% increase this year would strike out one of the 7% increases. In other words, VeriSign can’t make it up on the back end. Only if VeriSign calculated that the compounding of a smaller than 7% increase early on was better than a 7% increase later would it do it.

VeriSign’s stock is down about 8.5% this morning, no doubt partly due to the unfavorable court decision last week. To the extent that analysts have already baked in 7% increases in the first five years, the stock could come under more pressure.

Question and answer period at hearing gets testy.

In part 1 of our coverage of today’s U.S. House of Representatives hearing on ICANN, DNW covered committee member’s opening remarks. Part two covered witnesses’ opening testimony.

The real fireworks started when the committee members asked questions of the witnesses. Committee chairman Rick Boucher (D-Virginia) started the questioning by following up on Verizon’s comments about cybersquatting. (Verizon had said that cybersquatting is still rampant and that many of the cybersquatters are actually ICANN-accredited registrars.)

Boucher addressed ICANN president and CEO Paul Twomey about this, asking how registrars that are cybersquatters are allowed to exist. Twomey said ICANN has significant resources committed to enforcing its registrar agreements. Verizon Vice President Sarah Deutsch responded that ICANN hasn’t taken any steps against registrars that are cybersquatters. Twomey said his recollection is that they have taken action against cybersquatter registrars, but sometimes they take action under a different contract breach for expediency.

Boucher asked Twomey to write a letter explaining what ICANN has done to address cybersquatting registrars and the number of related de-accreditations.

Rep. Cliff Stearns, (R - FL) proceeded to blast ICANN’s financial surplus. He said ICANN should start acting like a non-profit and use excess money to lower costs to registrars and registrants. Stearns continued to berate Twomey, suggesting the current $7M surplus should be used to address cybersquatting or make domain names cheaper for consumers.

Stearns addressed Thomas Lenard, president of the Technology Policy Institute, during his questioning of Twomey. Stearns said that ICANN is able to choose what it does with the money because it is only accountable to itself.

Rep. John Dingell (D - MI) then asked a series of yes or no questions, such as if ICANN’s contract with VeriSign was transparent. For most questions the NTIA representative abstained, ICANN answered yes, VeriSign went with ICANN some of the time, and the rest of the witnesses replied ‘no’.

Next there was a bit of a showdown between GoDaddy’s General Counsel Christine Jones and Twomey. Jones chided ICANN for lack of transparency, citing its private board meetings and contract negotiations with registrars. Jones said Go Daddy has made several requests to ICANN for information but “we basically get stonewalled”. Twomey responded that Jones’ claims weren’t true, but Rep. John Shadegg ( R - AZ) strongly questioned Twomey’s assertions. For example, he questioned if Twomey’s assertion of meeting transcripts were true or if there were just meeting minutes.

I spoke with Jones after the hearing concluded. She was very happy with “huge turnout on that type of hearing” by representatives. She said ICANN won’t be accountable if it’s only accountable to itself. For example, ICANN’s outside review boards operate under rules created by ICANN’s board, and ICANN’s board ultimately decides what action to take based on the outside review.

Jones said she thinks most representatives want to extend the JPA “not because they want the U.S. government to have a heavy hand in the internet, but because the transition to private sector management is still in process. We just haven’t quite reached that destination yet.” Jones continued, “It’s not a partisan or controversial issue. Let’s keep the internet safe and secure until ICANN can stand on its two feet to do that.”

Members of the House rip into ICANN over pricing, transparency, and security.

It wasn’t pretty.

For better than two hours today, members of the House Subcommittee on Communications, Technology, and the Internet took turns ripping into Internet Corporation for Assigned Names and Numbers (ICANN) and its President/CEO Paul Twomey. If nothing else, ICANN’s experience on Capitol Hill today will give it all the more reason to try to get out of U.S. oversight. In addition to discussing the Joint Project Agreement, members also discussed the introduction of new top level domain names.

The hearings started with committee members spending two minutes on opening remarks. You can generally divide the members’ into three categories:

1. Well informed about subject matter
2. Didn’t know subject matter and admitted it
3. Didn’t know subject matter but read their staff notes and pretended like they knew about it

Almost all representatives were in favor of extending the Joint Project Agreement with ICANN, which they believe will provide more U.S. control in the internet’s naming system. Here are a few of their comments:

Rep. Cliff Stearns, (R - FL), seemed to focus on ICANN’s financial interests. He sharply questioned Twomey on ICANN’s reserve fund, Twomey’s salary, and even how much Twomey worked in the California office. Stearns repeatedly referred to ICANN as “I-CON” by accident in his opening remarks.

Rep. Mike Doyle (D - PA) questioned ICANN’s $4.5 million in stock losses. “I’m afraid ICANN seems better at furthering its own interests” than those of internet constituents, said Doyle. He also questioned the introduction of new top level domain names.

Rep. Lee Terry (R - NE) said control of the internet’s naming system “could be a matter of national security”. He also said the United States Government created the internet and needs to be in charge.

Rep. Anna Eshoo (D - CA) said she’s against cutting ICANN loose because countries that try to stifle freedom of speech may get control.

Rep. John Dingell (D - MI) was particularly harsh, saying ICANN was hardly a good model of governance and that it would be “wholly unwise to reduce further participation” by the U.S. Government. He also said ICANN’s contracting process with .com registry VeriSign (NASDAQ: VRSN) had a “deplorable lack of transparency”.

In the next part of Domain Name Wire’s coverage of today’s hearings I’ll summarize what some of the witnesses said and the line of questioning from committee members.

New VeriSign report shows domain registration growth is up. Or is it?

They say there are lies, damned lies, and statistics. The truth is you can focus on particular numbers to change the impression.

That’s the case with VeriSign’s new June Domain Name Industry Brief (pdf).

I could have headlined this article “Domain Registrations Up 17%”. But I also could have titled it “Domain Registrations Decline 17%”. It all depends on the baseline.

VeriSign (NASDAQ: VRSN) says there were 11.8 million new domain names registered in Q1 2009. That’s a 17% increase over Q4 of 2008, but a 17% decline from the same quarter last year. The first quarter has seasonably proven to be a good quarter for domain name registrations.

One thing that can’t be disputed is that the overall base of .com and .net domain name registrations is growing. It grew to 92.4 million domains in Q1 2009, a two percent increase over last quarter and a nine percent increase over Q1 2008. Renewal rates also remain strong at 71%, although down slightly from previous years. VeriSign reports a record 183 million domain names are registered across all TLDs and ccTLDs.