In a post by George Kirikos on his blog CircleID, looking at the draft of the rules for the new Generic Top-level domains (gTLD) a provision in the rules, Mr. Kirikos thinks may invite VeriSign to amend their contract to provide for eliminating price caps.
Mr. Kirikos writes:
“””””””””According to the draft of new Generic Top-level Domains (gTLD) contracts for Section 7.3:
Price controls have been removed for 2008 in favor of the transparent pricing model outlined above.
Section 3.2.b) of the .com registry agreement states:
ICANN shall not apply standards, policies, procedures or practices arbitrarily, unjustifiably, or inequitably and shall not single out Registry Operator for disparate treatment unless justified by substantial and reasonable cause.
In my opinion, VeriSign (and other existing gTLD operators) are almost being invited to ask for their contracts to be amended to get the “same treatment” as new gTLDs in regards to the elimination of pricing caps. This once again could re-open the issue of tiered pricing that most have fought very hard against in order to protect registrants.””””””””””
As you may recall in the last contract with VeriSign, there was a time it looked as if ICANN would allow Verisign to charge premium prices for .com domains, along the lines of the .TV registry. Many objected to this pricing, including myself and the provision was dropped.
If Mr. Kirikos is correct then domainers will have another battle on their hands.
If VeriSign is allowed to set fees by domain, we all will be out of business, as your $8 registration might become hundreds, thousands, tens of thousands or more, per year, per domain.
The only bright spot is that this provision would effect everyone with a domain, not just domainers and Google may not be happy paying $10 million dollars a year for its domain, or whatever number VeriSign places on it.
Thanks for helping to highlight this important issue. Just for the record, though, CircleID.com is not my blog — Ali Farshchian created it, and allows contributions from 3rd parties.
George
Thanks for the clarification.
Your serve or served on the GNSO didn’t you?
My company is a member of the ICANN Business Constituency. The Business Constituency is part of the GSNO, which is responsible for developing and recommending to the ICANN Board substantive policies relating to generic top-level domains. I’ve been following ICANN issues since the WLS debate ages ago.
Thanks Mike and George for the valuable information
Might be a good time to take advantage of NetSol’s 20 or 100 year renewals on your very best domains…?
Unregulated tiered pricing for existing .com domains (businesses) is so profoundly corrupt, and impossible to justify, that I can’t see it happening. It’s the equivalent of raising your mortgage payment by 800% or instantly raising the price of gas to $67.50 per gallon. Verisign’s cost to renew a domain name is negligible. .TV is not a parallel comparison as it was built on different business model from inception. dotcom’s are a single digit registration cost and the entire internet economy is predicated on that. For Verisign to signficantly alter this well-established price point will ignite a furnace around them.
Will VeriSign Be Able to Charge Preimum Prices for .Com? – They should NOT be allowed to set prices the way they like it.
ICANN SHOULD not allow this crap
I speculate we will start seeing a decline in registered .com’s and .net’s which will effect Verisign’s revenue.
As a business model, if Verisign charged based on market value, they could make more with less domains.
However, if the Icann fee is based on per domain, Icann’s revenue will drop. Therefore, they would need to move towards a percentage rate similar to a “sales tax” so they could piggyback on Verisigns windfall.
I would hope the Dept of Commerce would not permit this. But, considering what DofC has done so far to protect Verisign’s and Icann’s cartel, I doubt they will do anything.
Scary.
Icann’s response is always – “that is what the public hearing process is there for”.
When did they really ever listen to the stakeholders?
I hope the next president (McCain or Obama) will re-visit Clinton agreement of DofC no longer overseeing Icann.
Ricardo
I would expect the numbers of .com and .net registrations to slow.
First there is the 15% price increase over the past 2 years.
Second, the economy of parking is down. No matter how much Verisign and ICANN wants to say they hate domainers and parking domains, substantial parts of their revenue have come from them.
As the economics of parking continue to deteriorate the will be less domains being registered by the domain community.
Third, end of domain tasting. We were always against the practice as it lead to too many obvious trademark problems. However no doubt the imposition of the new fees will greatly curtail the practice leading to less domain registrations.
Maybe knowing all of this ICANN has been pushing hard for all those new extensions (gTLD’s) which are expected to arrive in late 2009 or 2010.
Thereby ICANN revenue can continue to rise dramatically, while VeriSign declines.
Actually that for the comment, I’m going to start a new post about it
Yes, I realized those points and that is why I expected to see a decline in registered domains.
And, just in case anyone wants to follow the money, here are the links to the political contributions by Verisign thru May 31st, 2008. However, I’m sure the number will rise drastically once the data comes out in January.
Which, unfortunately is too late to work against them.
http://www.campaignmoney.com/political/committees/verisign-inc-pac.asp?cycle=08
http://www.campaignmoney.com/finance.asp?type=io&cycle=08&criteria=verisign