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VeriSign Authorized to Raise Dot Com Prices

by as much as 7 percent for four out of the next six years

     
3:42 pm on Dec 1, 2006 (gmt 0)

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VeriSign Inc., the main manager of the Internet-address database, said the U.S. government approved a contract extending its control over Web sites ending in .com until 2012

Competitors including UUNet Technologies complained that ICANN awarded the business without a competitive bid. VeriSign has overseen the .com registry since 1999.

Bloomberg [bloomberg.com]

The contract approved today, negotiated between VeriSign and the Internet Corporation for Assigned Names and Numbers, allows Mountain View, California-based VeriSign to raise prices by as much as 7 percent for four out of the next six years.

[edited by: engine at 4:16 pm (utc) on Dec. 1, 2006]
[edit reason] added further quote [/edit]

4:02 pm on Dec 1, 2006 (gmt 0)

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and to all those who said that ICAAN arent in bed with the registrars?
5:02 pm on Dec 1, 2006 (gmt 0)

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I heart cartels.
6:04 pm on Dec 1, 2006 (gmt 0)

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Makes some sense; a good chunk of that 7 percent would be accounting for inflation. Plus raising the prices may also help stop some of the spammers / domain grabbing...
7:48 pm on Dec 1, 2006 (gmt 0)

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Price fixing.
9:17 pm on Dec 1, 2006 (gmt 0)

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Verisign currently charges $6.00US per year to manage each domain name in the .com gTLD. Add the $0.25US per year charge for ICANN's fees to get the base fee for each .com domain.

So a 7% fee increase (available to Verisign four times over the next six years ... the life of the current contract) ends up looking like:

Y2007 = $6.00US (no increase allowed)
Y2008 = $6.00US (no increase allowed)
Y2009 = $6.42US
Y2010 = $6.87US
Y2011 = $7.35US
Y2012 = $7.86US

This isn't exactly breaking the bank, folks. It accounts for little of the costs related to managing the entire planet's .com entries. An increase of $1.86US over six years? I think we can all handle that.

[edited by: StupidScript at 9:22 pm (utc) on Dec. 1, 2006]

9:32 pm on Dec 1, 2006 (gmt 0)

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Wait, I thought it was 7% total, not 7% each year?
9:55 pm on Dec 1, 2006 (gmt 0)

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Of course 7% compounded yearly over 30 years will start to get outrageous, but as it stands it seems reasonable. I much prefer capped fixed pricing at those levels over the uncertainty of a variable pricing regime.
11:09 pm on Dec 1, 2006 (gmt 0)

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And I would prefer it weren't verisign.
12:25 am on Dec 2, 2006 (gmt 0)

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And I would prefer it weren't verisign.

I hear this occasionally ... who would you prefer? And who would you think is more capable? It's a pretty big job, but there have got to be alternatives.
3:27 am on Dec 2, 2006 (gmt 0)

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The increases are reasonable but the more agreement they meet the easier the next 7 years at 20% a year will be to push through. Give an inch and they'll take a mile.

I'd like to know what additional services VeriSign will be providing in return for increased fees. Surely, due to economies of scale and the falling cost of both hardware and bandwidth, fees should be going down rather than up as the web expands?

3:33 am on Dec 2, 2006 (gmt 0)

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It's a pretty big job

One wonders, though, how much less of a job it would be without domain tasting.

7:13 am on Dec 2, 2006 (gmt 0)

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and to all those who said that ICAAN arent in bed with the registrars?

It's too bad we cannot protest by not paying the $.25 ICANN tax on each domain per year.

7:17 am on Dec 2, 2006 (gmt 0)

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Hmm, if it's such a big job, I wonder how those .info guys manage to do it for 2$ on lower volume?
2:04 am on Dec 3, 2006 (gmt 0)

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So I assume from reading this that all dot com names must come through Verisign first then goto Moniker or GoDaddy or the other registars...

Why is Verisign more expensive than anyone with their Network Solutions site? I notice they sold network solutions but still own 15%---either way they are the most expensive at $14.99.

4:08 am on Dec 3, 2006 (gmt 0)

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Verisign already makes a killing. Its a monopoly, it doesn't really have to answer anyone, and its profit margins are in the $#*$!,#*$!,#*$!.

The argument that it stops spammers/domain grabbers is wishy washy. If you have a problem, talk about the 5 day registration. All this does is allow Verisign to make even more.

And inflation? Is that why webhosts are getting cheaper and cheaper? The cost involved for Verisign is going down, not up.

Leos - just one registrar here, no one other than Verisign benefits.

10:49 pm on Dec 4, 2006 (gmt 0)

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Lots of confusion about the price increase.

According to an article I just read, they can raise the price up to 7% in 4 of the 6 years of the contract. (Not sure if this is ANY 4 of the years, or 4 specific years...) They must give 6 months advance notice of a price increase.

So, they can raise the price a total of 31% over the next 6 years.

12:28 am on Dec 5, 2006 (gmt 0)

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verisign, like the secure certificate provdier?
1:01 am on Dec 5, 2006 (gmt 0)

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Verisign, like the operator of the .com and .net registries, who could probably care less about certificates.
2:51 am on Dec 5, 2006 (gmt 0)

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Fact Sheet: Department of Commerce Approval of the .com Registry Agreement (DoC - NTIA) [ntia.doc.gov]

Pricing

* VeriSign must obtain prior written approval from the Department of Commerce before any amendments can be made to the pricing provisions of the agreement or execution of a renewal or substitution of a future .com Registry Agreement.

* Department approval of any renewal or substitution will occur only if it concludes that it will serve the public interest in the continued security and stability of the Internet domain name system and the operation of the .com registry…and the provision of registry services is offered at reasonable price, terms, and conditions.

* The Department may seek specific performance of the pricing terms and competition safeguards in the new .com Registry Agreement.

There's hope yet that VeriSign will not run the .com registry after 2012. A competitive bidding process for the .com contract would surely drive down prices for the benefit of consumers.

If the Department fails to approve a renewal or substitution, VeriSign becomes bound by the terms of the Cooperative Agreement, which include the ability of the Department to open a competitive process for the management of the .com registry.
8:53 pm on Dec 5, 2006 (gmt 0)

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A competitive bidding process for the .com contract would surely drive down prices for the benefit of consumers.
Oh yeah! I am SO looking forward to "the lowest bidder gets to manage the entire gTLD!" Hell ... I'll do it for $0.50 per year per domain! Seriously! I have a few spare computers and a nice T1. That ought to be fine, after all ... with the web expanding nearly exponentially every day, what other possible costs would I incur? Pure profit, baby ...

Bah.

Lowest bid, competitive bidding ... I frankly don't give a d**n as long as the system remains stable and robust. If Verisign needs to add another few thousand servers and their accompanying real estate and managers, I really don't begrudge them the less than $2 more per domain per year that they could end up charging my registrar, as long as the system stays stable and robust.

3:51 pm on Dec 9, 2006 (gmt 0)

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I didnt seen Verisign suffering and getting poor year by year,managing .com is not so complicated and expensive job as some can imagine.
Another case of ICANN beeing a curropted organization,one day this will end up.
5:01 am on Dec 15, 2006 (gmt 0)

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Me thinks domains are too cheap to begin with. They should cost thousands of dollars each and require strict background checks.
10:23 am on Dec 15, 2006 (gmt 0)

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Me thinks domains are too cheap to begin with. They should cost thousands of dollars each and require strict background checks.

That should stop individuals in the developing world competing.