In the earnings call today, Verisign (VRSN) announced that it was in “in the final stages of drafting the new Root Zone Maintainer Agreement with ICANN “to perform this Root Zone Maintainer role as a commercial service for ICANN upon the successful transition of the IANA functions.”
“To ensure that root operations continue to perform at the same high level during the expected 10-year term of the Root Zone Maintainer Agreement, ICANN and VeriSign are in discussions to extend the term of the .com Registry Agreement to coincide with the expected 10-year term of the Root Zone Maintainer Agreement, ensuring that the terms of the two agreements are the same, will promote the stability of root operations, and will remove potential instability that might otherwise arise if the terms did not coincide.”
The current contract to operate the .Com registry expires in 2018.
Verisign state that “while ICANN and Verisign are in the final stage of preparing the Root Zone Maintainer Agreement and the .com Registry Agreement extension documents, there are several important steps that still need to occur including completing the drafting of the agreements, posting them for public comment and obtaining approvals from ICANN’s and Verisign’s Board of Directors.
Additionally, under the Cooperative Agreement, we may not enter into the contemplated extension of the .com Registry Agreement without the prior written approval of the Department of Commerce. If the department does not approve the extension, then the current .com Registry Agreement will remain unchanged.
Bottom line:
- Verisign finalizing negotiating an agreement with ICANN that would establish a new 10-year Root Zone Maintainer Agreement and link it to a 10-year extension of the .Com registry agreement, both of which would commence on the date of the IANA transition. (So, if the transition occurs on October 1, 2016, the expiration date of the .Com registry agreement would change from November 30, 2018 to October 1, 2026.)
- The deal requires approval of the ICANN and Verisign Boards, and then of the NTIA.
- The contracts will be subject to public comment.
- The deal does not lift the .Com price freeze; Verisign retains its existing rights to petition for pricing relief if market conditions change but does not grant any automatic price increases to Verisign as in the previous Verisign contract to operate the .com registry and that is in the current contract to operate the .net registry.
I doubt this will meet many objections, Verisign have performed admirably.
If they can then describe, deliver and execute on a future 10 year strategy. I’m still selling.
Luck is luck genius is gravitational waves.
Groovy
“Verisign have performed admirably.”
Apart from their frivolous lawsuits to try and financially cripple XYZ.
I concur, didn’t want to say so so soon.
I was more thinking for the investors, of whom I’m not.
Would / Could ( such ) subtle petitioning result in Verisign being allowed to apply
“premium” domain names model ( like gtlds ) price right out of its registry ?
There should be a significant price decrease, and/or it should be opened up to a tender process. These monopolistic and anti-competitive contracts are costing consumers hundreds of millions of dollars annually in excessive registration fees. For dot-com alone, it’s on the order of at least $500 million/yr in savings, if the contract was put up for tender.
George
The contract has and still will has a presumptive right of renewal meaning they get the contract renewed unless they have issues in operating the registry which they have not in 18 years.
so That argument was lost in the 2006 contract although I know we both filed public comments on it in 2006 and again during the 2012 contract renewals
Mike: I’m aware of that (long opposed to “presumptive renewal”), but I think there are ways around that.
(1) on anti-trust grounds (hopefully some of the bigger registry players, e.g. Neustar (now that it’s in the toilet after losing the phone number management contract), Google, Amazon, etc. challenge things, or
(2) eliminate the service VeriSign performs (and thus no actual contract to “renew”), by, for example, splitting the registry into multiple segments, e.g. one part responsible for DNS resolution of the .com zone file (i.e. DNS servers around the world), and another part responsible for the actual registrations (i.e. the part that interfaces with the registrars). One could even have multiple providers for DNS resolution (just like one can have EasyDNS and DNSMadeEasy.com serve the DNS for a single domain, for redundancy). There can then be a tender process for a fixed-term contract for each of those brand new segments, with no presumptive renewal. Or,
(3) indeed, ICANN could conceivably not even have to tender the dot-com contract to an external set of firms….they could bring the function in-house (hire the appropriate people, use cloud services to handle the resolution aspect via a redundant set of global servers, etc.).. It’s not as if we’re talking magical technology here. It might have seemed magical in 1996, but not in 2016. Just like firms might have external firms handle certain duties (e.g. security guards, cleaning, etc.), but then decide they’d rather end those contracts, and have it handled in-house.
Of course VeriSign wants to lock in the anti-competitive dot-com contract for as long as they can. Renewing it 2.5 years early is demonstration that their current deal is a bad deal for consumers (and too rich for VeriSign), and they don’t want to risk having the gravy train end. They don’t want to risk a new US President and Congress asking the tough questions about why consumers are being soaked by over $500 million per year. They would certainly be happy to extend the contract for 50 years, but the “optics” of that would be ridiculously bad.
Unless smarter people exist at the NTIA/DOC/DOJ this time, though, consumers will probably suffer another bad contract renewal with VeriSign. Consumers shouldn’t suffer in perpetuity because of the boneheads sitting at the negotiating table from ICANN and NTIA/DOC/DOJ in the past.
Friday
Yes Verisign has the right to petition for variable pricing for .com, if the amount of new G’s got up to 50 Million they will argue they now longer have a monopoly and market price should dictate.
.Web maybe the one that changes the game