Verisign: you can’t cancel our contract to run .com

Verisign responds to letter from advocacy groups.

Verisign (NASDAQ: VRSN) today filed a notice with the SEC stating that the .com contract cannot be put out to competitive bidding.

The company was responding to a letter sent by American Economic Liberties Project and other advocacy groups asking the U.S. government to terminate the agreement and put it out to bid.

In the filing, Verisign states:

The campaign, and the letters, assert that the 32-year-old Cooperative Agreement between the Department of Commerce (Department) and Verisign involving the .com top-level domain registry can be terminated by the Department on August 2, 2024, and, if it is, the management of .com can be transferred after a competitive bidding process. This assertion is wrong: If the Department chooses to sunset the Cooperative Agreement, which Verisign does not seek, the .com registry will continue to be managed pursuant to the terms of Verisign’s and the Internet Corporation for Assigned Names and Numbers’ (ICANN) valid, enforceable Registry Agreement, which ensures the continued security, stability, and resiliency of this key internet infrastructure in accordance with the global multistakeholder system of internet governance.

The letters and the campaign are based on a fundamental misunderstanding and ignore the clear language of the Cooperative Agreement, the nature of cooperative agreements, the course of dealing between the Department, Verisign and ICANN, the role of ICANN as the central coordinator of the Domain Name System, long-standing US policy, as well as the express terms of the ICANN/Verisign .com Registry Agreement.

It’s true that the language of the contract doesn’t allow Verisign to lose it. The renewal Verisign signed during the Trump administration goes a step further, locking in price increases.

The only thing the government can do regarding the contract is to remove itself from the contract, leaving it to negotiation between Verisign and ICANN. If that were to happen, there would be less price control than there is now.

After the most recent contract renewal, I’ve felt the only thing that could prevent Verisign from increasing prices would be pressure from competition authorities.