Deal Reached on .com Domain Price Hikes

[Queen Bee]

Well, since no one else has posted on this yet, I thought I would...

"NEW YORK - The board of the Internet's main oversight agency has approved a deal under which VeriSign Inc. must meet some conditions in order to raise fees for ".com" domain names... Under the deal approved Tuesday by the Internet Corporation for Assigned Names and Numbers, or ICANN, VeriSign is allowed to raise its annual fee for domain names, which registrars could then pass along to customers.

VeriSign, which is based in Mountain View, Calif., operates the servers that constitute the Internet's core address book for ".com" Web sites, making sure that people find Web sites. The company sells ".com" addresses for $6 each to registrars who then sell them to the public.

The deal limits VeriSign's annual price increases to 7 percent in four of the next six years. In two of the years, VeriSign could raise fees by the same percentage only in response to a security threat or to comply with an ICANN mandate."

By PETER SVENSSON, AP Technology Writer
Wed Mar 1, 5:32 PM ET

The outcome of retail costs among registrars is unknown, as the 7% increase will burden owners with an additional $0.42 cents per year for domain hosting. Domain hosts already charging higher prices may decide to cut their losses and remain at their current pricing, whereas registrars (Like GoDaddy) charging lower costs for domains will most likely increase to make up the difference.

If we take the time to consider the combined marginal profits, this inflation will result in over $1 billion increased cost to .COM owners. This increase is pure profit for Verisign, who already generates over $450 million per year by operating the .COM registry.

Not only that, but this agreement establishes an automatic renewal provision, and terminates the competitive bidding process. This means that this unsupervised monopoly will continue to dominate the market and raise pricing whenever they see fit... And will only need to renew their contract in 2012 in order to maintain control.

But it seems the big question is, why the cost increase?
We already know that Verisign is the sole provider in the registry process, and has very little dealings with the public; In addition to that, their service is very simple to maintain, as most everything is automated. Is it about making a fair profit? That's already happening: The profits for domain sales will continue to increase every year regardless, as new businesses and old businesses alike continue to make themselves known on the Internet. If anything, fees for .COM domain names should be decreasing, not increasing.

I have heard from other webmasters concluding that this new deal may, quite possibly, be founded on nothing more than greed. But I'm curious to hear feedback here at Webmaster Key on this.

Good articles to read:
http://news.yahoo.com/s/ap/20060301/ap_on_hi_te/icann_verisign
http://www.bobparsons.com/ICANNletsusdown.html

[SensoVision]

I think that costs should be cutted not raised at least in .COM market but seems that not everyone thinks alike
Anyway I hope that costs wouldn't grow rapidly and people and I along with them would be able to pay for my domains.

[Queen Bee]

I think that costs should be cutted not raised at least in .COM market but seems that not everyone thinks alike 
Anyway I hope that costs wouldn't grow rapidly and people and I along with them would be able to pay for my domains.

I hope so too. I haven't gotten a chance to write to my senator, but I plan on at least doing that. As an American, I think it's my obligation... Considering who is currently running this "show."

[SensoVision]

if you wish to send open letter, I'd be glad to host it on WKey and sign under it.

[Andy]

The desireability of domain names reduces with time yet you can't host a website without one i.e. you have to string together several words and it's rare to get exactly the name you really want. So I think domains should be reducing in price. I don't think they should be free though.

[susieq]

I agree with Denis, and I'll put my name to it....

[Queen Bee]

if you wish to send open letter, I'd be glad to host it on WKey and sign under it.

Thanks for this offer, Denis!

I think I will go ahead and use Bob Parson's recommended letter for this, get everyone on the boards that's interested in signing to sign, and send it out to my senator. I am unsure of how effective it will be, but I'm willing to show some effort here.

I'll get back to you guys on this later today...