Internet Commerce Association, a group that represents the interests of domain name owners, is pushing a petition to tell the U.S. Government to continue to intervene to prevent Verisign (NASDAQ: VRSN) from increasing prices on .com domain names.
The petition is starting to gain stream with close to 1,000 signatures as of this morning. You can sign it here.
The Cooperative Agreement between the U.S. National Telecommunications and Information Administration (NTIA) and Verisign is what has kept .com prices from increasing another 31% during the past six years. While the actual .com registry agreement is between Verisign and ICANN, ICANN has generally allowed Verisign to increase prices of .com domains by 7% for four out of the six years of the previous contracts. Unsurprisingly, Verisign has taken all of the price increases it has been afforded.
[click_to_tweet tweet=”For every $1 Verisign increases prices on .com domains, consumers pay an additional $137 million per year.” quote=”For every $1 Verisign increases prices on .com domains, consumers pay an additional $137 million per year.”]
It was the NTIA that stepped in back in 2012 to shut down price increases, and it is in the same position to do so now. The Cooperative Agreement expires at the end of November 2018. The NTIA can extend the agreement in its sole discretion. It is currently negotiating behind the scenes with Verisign without input from the internet community at large.
Should the NTIA let the agreement expire, Verisign will be free to negotiate price increases with ICANN.
Verisign already receives outrageous profits from the contract. It gets to charge $7.85 every time a .com domain is registered or renewed. If the contract were put out to bid, the cost would probably be a few dollars or less.
For every $1 increase in the wholesale cost of .com domain names, consumers around the world pay an additional $137 million a year in fees that go almost entirely to Verisign’s bottom line.
Jeff Schneider says
With the coming Global Dominance that (.COM Equimoditty Platform Assets) will attain do to Online Business Incubators Blockchain driven Configuraters , it is doubtful that these strategic Assets will see no future increase in prices. JAS 10/1/18
Gratefully, Jeff Schneider (Contact Group) (Metal Tiger) (Former Rockefeller IBEC Marketing Intelligence, Analyst/Strategist) (Licensed CBOE Commodity Hedge Strategist) (Domain Master ) https://www.UseBiz.com
Mark Thorpe says
Don Smith says
VeriSign operates a monopoly over the .COM namespace.
This contract made sense back in 2004 when there were only 50 million .COM domains, but today with more than 136 million .COM domains and a growing base, the economics of the contract are too lucrative for VeriSign (or any other company.)
Furthermore, the cost to operate the .COM registry has declined because of economies of scale and advances in computing power, including lower costs of both hardware and software. This is why VeriSign’s margins have reached almost 70%.
Bottom line — this contract is simply too lucrative for VeriSign or any other company to manage.
Proof is in the earnings results:
* VeriSign spent more than $5.0 Billion in share repurchases between years 2009 and 2017. Over the past five years, Verisign has put 93% of its free cash flow has into stock buybacks. Less than 7% has gone into its core infrastructure via CapX.
* VeriSign CEO, James Bidzos, compensation amounted to $46.0 million over the past 5 years alone (average of $9.2 million per year)
* VeriSign generated free cash flow of $703 million on $1.17 billion in revenue in 2017
* VeriSign employs fewer employees than ever before (only 952 employees as of beginning of 2018)
* VeriSign is not investing into their infrastructure anymore (spending less than $50 million in CapX per year.) Almost ALL of their money goes into Stock Buybacks
* VeriSign has $2.4 Billion in cash sitting in the bank as of December 31, 2017
* VeriSign operating margins have climbed from 33.3% in 2009 to over 68.0% in 2018
* VeriSign has spent millions and millions in lobbying expenses over the years (to protect its monopoly)
* GoDaddy’s Founder and prior CEO, Bob Parsons, said he was able to operate the .COM registry at a cost of only a few dollars per domain
As GoDaddy’s James Bladel suggests in his recently testimony to Congress, everyone in the DNS industry would benefit from a competitive bid for the .com contract. Most importantly, end consumers.
It is also worth mentioning Phil Corwin, who held the position of Counsel for the ICA, called on the Department of Commerce to slash .COM pricing by $2.00 back in 2012.
Mr. Corwin now works for VeriSign (VeriSign bought his silence by making him a full time employee late last year.)
Lawrence Strickling (who was the administrator of the NTIA at the time) listened. Mr. Strickling agreed the contract was too lucrative for VeriSign and took action. Kudos to Mr. Strickling for doing the right thing.
Now David Redl is at the helm of the NTIA. Will he take action and reduce the amount VeriSign charges for .COM domain names? Or will he look the other way?
Pricing for .COM domains is entirely in David’s hands.
When is enough money – enough? Let’s put American business first – as well as the millions of Internet users and business throughout the world. Why allow a monopoly to be uncontested in is prices? Why not make sure it is a fair and reasonable contract?
Why? It is just the right thing to do.
and in the news … A new .com registry, and a new approach. .com XY registry will start to introduce a premium registration price for anything… whatever… premium domains.
on top of what has been mentioned