Domain Prices Set to Rise

The days of ever cheaper domain names may well be numbered, thanks to a newly-revised agreement between ICANN and online security provider VeriSign .

If ratified, the revised proposed agreement would end years of festering disagreement over domain names and related services between the Internet Corporation for Assigned Names and Numbers (ICANN) and VeriSign.

If all of this sounds a familiar, you would be correct. ICANN and VeriSign supposedly had reached a tentative deal along the same lines back in October. That deal was supposed to settle all outstanding issues between them.

VeriSign has been administering the .com domain name space on behalf of ICANN since it was awarded the contract in 2001. In 2004, VeriSign filed suit again ICANN, charging it with breach of contract issues stemming from VeriSign’s similar SiteFinder and waiting-list service (WLS).

The new settlement proposal runs for six-years and may allow for renewal in 2012 when it expires. Revisions in the new document, according to an ICANN statement, include, “the elimination of the proposed registry-level transaction fee (which would have been passed through directly to registrars) and a direct contribution from VeriSign in the form of significantly increased fixed registry-level fees (which VeriSign will not be permitted to pass through directly to registrars).”

The new agreement is also supposed to set limits on how often and how much VeriSign can raise wholesale domain name prices.

The proposed settlement would allow a 7 percent increase in any of four of the next six year, to be charged by VeriSign for domains beginning in 2007. The deal allows includes provision that could potentially allow VeriSign to levy the increases even in the two years where it is not officially supposed to have an increase.

The proposed agreement specifies that VeriSign may raise price of a domain, “by an amount sufficient to cover any additional incremental costs incurred during the term of the Agreement due to the imposition of any new Consensus Policy or documented extraordinary expense resulting from an attack or threat of attack on the Security or Stability of the DNS.”

The revised deal is already drawing criticism. The Coalition for ICANN Transparency (CFIT) has stated that in their view, “little has changed.”

CFIT, together with The World Association of Domain Name Developers (WADND), opposed the prior settlement proposal with a lawsuit.

CFIT alleges that the original deal does require economic justification for price increases. Furthermore, CFIT argued that the deal could enable VeriSign to “expand its registry services, using its monopoly of the .com database to annex already competitive markets.”

The group also took issue with the terms of the agreement, which CFIT said would exist, “in near-perpetuity under presumptive renewal terms.”

John Berard, spokesperson for CFIT, said those objections remain. “The process dictated by the ICANN board to take public comment, renegotiate with VeriSign and come back to the community has led us in a circle to where we started.”

For now, the revised deal is nothing more than a proposal. The public comment period runs until February 20th.

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