Major .com price hikes could be coming.
The U.S. Government has extended its Cooperative Agreement with Verisign (NASDAQ: VRSN) for managing the .com domain name. The deal will allow Verisign to negotiate with ICANN to raise the price of .com by 7% in each of the last four years of each six-year .com contract.
Verisign released this statement:
Amendment 35 provides Verisign the pricing flexibility to change its . com Registry Agreement with ICANN to increase wholesale price for . com domain names. Specifically, the flexibility permits Verisign to pursue with ICANN an up to 7% percent increase in the price for . com domain names, in each of the last four years of each six-year period of the . com Registry Agreement. Amendment 35 clarifies that the vertical integration restrictions on Verisign’s ability to own an ICANN-accredited registrar apply only to the . com registry and not to other services offered by Verisign, and the .com Registry Agreement can be amended to reflect that. Amendment 35 also identifies the circumstances that require approval by the DOC for further changes to the .com Registry Agreement, extends the expiration of the Cooperative Agreement to November 30, 2024, and provides for the automatic renewal of the Cooperative Agreement for six-year terms unless the DOC provides Verisign with written notice of non-renewal 120 days prior to the end of the then-current term. Finally, Amendment 35 confirms that Verisign will operate the . com registry in a content neutral manner with a commitment to participate in ICANN processes.
In the amendment, the U.S. Department of Commerce stated that ccTLDs, new gTLDs and social media “have created a more dynamic DNS marketplace”, and as such, it’s appropriate for Verisign to have pricing flexibility.
Price hikes can’t begin for two years from now. Verisign will still have to get ICANN’s approval for any price hikes, but ICANN has previously acquiesced. ICANN is likely to grant price hikes in return for a higher cut of the action.
The full amendment is here (pdf).
The Department of Commerce billed the changes as reducing regulatory burdens in line with Trump’s policies, and took a stab at the Obama Administration for freezing .com prices:
NTIA and Verisign have agreed to extend and modify the Cooperative Agreement. These modifications are in line with policy priorities of the Trump Administration. The changes create a new commitment to content neutrality in the Domain Name System (DNS), provide market-based pricing flexibility, and reduce the regulatory burden on Verisign.
Amendment 35 confirms that Verisign will operate the .com registry in a content neutral manner with a commitment to participate in ICANN processes. To that end, NTIA looks forward to working with Verisign and other ICANN stakeholders in the coming year on trusted notifier programs to provide transparency and accountability in the .com top level domain.
The amendment repeals Obama-era price controls and provides Verisign the pricing flexibility to change its .com Registry Agreement with ICANN to increase wholesale .com prices. Specifically, the flexibility permits Verisign to pursue with ICANN an up to 7 percent increase in the prices for .com domain names, in each of the last four years of the six-year term of the .com Registry Agreement. The changes also affirm that Verisign may not vertically integrate or operate as a registrar in the .com top level domain.
This story has been updated with additional details.