Consumers pay over a half billion dollars more than necessary each year to register .com domains.
Verisign (NASDAQ: VRSN) is currently in negotiations with the U.S. Department of Commerce with regards to the Cooperative Agreement to run the .com domain name. The agreement expires November 30 of this year. The Department of Commerce has the sole discretion to extend the term of the agreement.
It’s the Department of Commerce, through the Cooperative Agreement, that effectively sets price controls on registrations and renewals .com. Verisign has a contract with ICANN for running the domain but the Cooperative Agreement can mandate price controls in the ICANN agreement. In the past, ICANN granted Verisign the ability to raise prices in .com. The DOC stepped in and froze the amount Verisign charges registrars at $7.85 per domain per year.
Verisign also has a presumptive right of renewal with ICANN for the .com contract. It got this right after negotiations with ICANN following a lawsuit. Unless Verisign really messes up, or if there’s an antitrust ruling, Verisign gets to run .com in perpetuity.
So in some ways, considering what the cost of .com would be if the contract was put out to bid is a pointless exercise. However, it’s relevant to the Department of Commerce and National Telecommunications and Information Administration (NTIA) as they consider what to do with the Cooperative Agreement. Click here to continue reading…