In a document signed November 29, 2012, the U.S. Department of Commerce took away Verisign’s automatic price increase provisions on .com domain names. Previous contracts with ICANN had allowed Verisign to automatically increase prices during the term of the agreement which lasted for several years. They did not have to justify the increase each time; just once at the initial negotiation. And they took the opportunity to raise prices at every occasion.
I typically wouldn’t be critical of price increases for most registries. But the Verisign registry for .com is different because of its size. It completely eclipses the size of most registries in the world. According to their most recent “State of the Domain” report, the .com regsitry contains over 100 Million domain names. The next largest registry in the world is DeNIC, the company that manages the country code top level domain for Germany, .de with just over 15 million TLDs.
In defense of Verisign, they do a great job of managing the .com, .net, and other registries that they manage. They are the company for the job and deserve to keep that contract. But automatic price increases not requiring justification aren’t right for any company with that kind of market dominance.
Here’s a few exerpts from the contract:
REASON(S) FOR AMENDMENT
This agreement is hereby amended to (1) approve the .com Reglstry Agreement (as revised); (2) cap the price of .com registrations at $7.85 and allow VeriSign to take price increases only upon prior written approval of the Department; (3) permit Verisign to petition the Department for relief from price restrictions if it can demonstrate that it no longer has market power; (4) extend the expiration date until November 30, 2018; and (5) affirm that the Department’s approval of the .com Registry Agreement does not confer antitrust immunity.
EXCEPT AS SPECIFIED IN THIS AMENDMENT, ALL PREVIOUS TERMS AND CONDITIONS REMAIN IN EFFECT.
2. The Maximum Price charged by VeriSign for registration or renewal of a .com domain name during the term of the .com Registry Agreement approved hereby shall not exceed US $7.85; provided, however, that VeriSign shall be entitled to increases in the Maximum Price in accordance with Section 7.3( d)(ii) of the .com Registry Agreement; provided further that VeriSign shall not exercise such right unless the Department provides prior written approval that the exercise of such right will serve the public interest, such approval not to be unreasonably withheld.