Registrars Raise Alarm Over Proposal for Big .com Fee Hikes
martyb writes in with an IRC submission:
Registrars raise alarm over proposal for big .com fee hikes:
Last week, ICANN announced that Verisign, the private company that administers the .com domain, will be allowed to raise prices by more than 70 percent over the next decade. Domain registrars-companies that help the public register domains and must pass along these escalating fees-aren't happy about it.
"ICANN and Verisign made these changes in secret, without consulting or incorporating feedback from the ICANN community or Internet users," registrar Namecheap wrote in a blog post. "Namecheap will continue to lead the fight against price increases that will harm our customers and the Internet as a whole."
On Sunday, my Ars Technica colleague Kate Cox got a notification from her registrar, Dynadot, warning that "price increases on the registry level unfortunately result in price increases at Dynadot."
To register a .com domain on behalf of a customer, a company like Namecheap or Dynadot must pay Verisign a $7.85 fee. Registrars typically add a few dollars on top of this fee, but fierce competition among registrars limits their ability to raise prices. But Verisign itself doesn't have competitors; if you want to register a .com address, you have to do business with Verisign.
To prevent Verisign from abusing this monopoly, ICANN caps the fees Verisign can charge.
The new contract allows Verisign to raise the current $7.85 price by 7 percent per year over the next four years-far faster than expected inflation over that period. Verisign would then be required to keep prices flat for two years before it could begin another four-year cycle of 7 percent annual price hikes. Add this all up, and the price of a domain registration could rise 70 percent to $13.49 by 2030. If inflation stays near the Federal Reserve's 2 percent target during that period, Verisign's inflation-adjusted revenue will rise by about $4 per domain, per year.
That would represent a massive windfall for Verisign because according to Namecheap, there are more than 140 million .com domain names registered. So Verisign would reap more than $500 million in additional revenue, each year, for running the .com registration database.
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