With the Cooperative Agreement expiring next month, U.S. businesses could face higher tax-like fees on .com domains.
The price consumers pay for .com domain names have been kept in check by an obscure agreement between the U.S. Department of Commerce’s NTIA and Verisign (NASDAQ: VRSN), the company that operates .com.
This so-called “Cooperative Agreement” expires at the end of next month and we still don’t know what’s going to happen. Will the NTIA extend the agreement? If it doesn’t, the only real check on the wholesale price of .com domains will go away. That almost certainly means price increases. And while the typical business only owns a handful of domain names, the cost to businesses overall would be high.
Internet Commerce Association (ICA), a group that advocates for domain name owners, sent a letter (pdf) to NTIA head David J. Redl yesterday explaining why it’s important to extend the group’s oversight of .com. It succinctly lays out the facts:
- Letting the agreement expire will almost certainly lead to price increases, akin to a billion dollar+ tax on businesses and individuals over time
- Domain name regulator ICANN can’t be relied upon to keep .com prices in check and has an incentive to let Verisign increase prices
- Verisign’s financials and compensation already reflect a company with a monopoly contract on an important piece of the internet
- Other companies would likely operate .com at less than half the price Verisign currently charges
- .Com domains are still the gold standard and considered a necessity by most businesses
There’s one thing the letter doesn’t mention that a reader recently pointed out to me. Companies must now disclose their median pay, and Verisign’s is among the highest of all public companies. In 2017 it was $171,615.
ICA also has a website about the Cooperative Agreement with more details at StopThePriceIncreaseOf.Com.