The US government's National Telecommunications and Information Administration (NTIA) has said it will renew its Cooperative Agreement with Verisign to oversee the .com domain registry and other responsibilities - while expressing some concern about price hikes.

"In accordance with NTIA's commitment to Internet stability and security, NTIA intends to renew its Agreement with Verisign," said Alan Davidson, Assistant Secretary of Commerce for Communications and Information and NTIA Administrator, in an August 2, 2024 letter to Verisign CEO D. James Bidzos.

"At the same time, in light of recent public inquiries, NTIA has questions related to pricing in the .com market. We are therefore pleased that Verisign has agreed to discussions regarding .com pricing and the health of the .com ecosystem, including retail and secondary markets."

Verisign, in consultation with ICANN, has been given the authority to periodically raise the wholesale price of .com domains. Domain registrars (the retail sellers of domain names) then add whatever markup works for their business and pass that cost on to their customers.

As of September 1, 2023, the wholesale price for a .com domain jumped from $8.97 to $9.59, an increase of 6.91 percent (just below the allowable increase of 7 percent). ICANN also charges a fee of $0.18 for registration (per year), transfer, or renewal of global top-level domains.

Among the public inquiries questioning repeated price hikes for .com domains was a July 25, 2024 letter from Republican members of Congress Cathy McMorris Rodgers (R-WA), Bob Latta (R-OH), Morgan Griffith (R-VA) seeking information from NTIA about the Cooperative Agreement with Verisign.

Their letter [PDF] notes the current arrangement with Verisign has allowed the company, with ICANN's assent, to raise prices by up to seven percent each year during the past four years of the six-year term of the agreement. And the company has done so each year it has been allowed.

Monopolistic elements and excessive domain name price increases stifle the ability of .com registrants to conduct business online

"Some have argued Verisign enjoys considerable profit margins from managing the registry, charging far more than it costs to operate it," the lawmakers' letter says, noting that NTIA is responsible for supporting the domain name system in a way that helps businesses grow.

"Monopolistic elements and excessive domain name price increases stifle the ability of potential .com registrants to conduct business online."

Last week, just prior to the August 2, 2024 contract renewal deadline, the American Economic Liberties Project released a policy paper calling for an end to Verisign's control of the .com domain and urged NTIA to end its two-decade-old relationship with Verisign.

"Verisign's monopoly over the .com top level domain is old enough to vote and drink," said Laurel Kilgour, Research Manager at the American Economic Liberties Project, in a statement.

"It's time for the NTIA to quit caving to automatic renewals or weak compromises, and end Verisign’s reign over the domain name industry. Continuing to provide cover for them only pads the profits of Verisign shareholders like Warren Buffet, and hurts website owners that depend on the .com domain name."

Kilgour urged NTIA either to cut ties with Verisign or to roll back amendments put in place during the Trump administration. Amendment 35 [PDF], adopted in 2018, removed NTIA's right to require a competitive bidding process for the management of .com TLD registries; gave Verisign and ICANN the authority to increase prices by seven percent each without approval or justification; and limited NTIA's authority to negotiate agreements covering price, vertical integration, and other terms.

The advocacy group's paper [PDF], "A Call for .Com-petition: Reining in Verisign’s Monopoly Over the Internet’s Most Popular Top-Level Domain," claims that the 2018 amendments led to an unjustified 30 percent increase in wholesale domain prices and from 159 million .com registrants generated a "$383 million annual windfall for Verisign’s shareholders."

The paper says, "The question before the NTIA is clear: Should Verisign continue reaping large monopoly rents through its control of the most popular top-level domain on the internet, forcing businesses to pay an ever-increasing private tax that robs consumers to pay shareholders, including Verisign’s largest shareholder, Warren Buffet? Or should the NTIA use its remaining authority to rein in Verisign’s monopoly abuse?"

Verisign's answer to that question is that capping wholesale domain prices is a bad idea.

We believe price caps on .com wholesale prices have not always passed through to benefit end-users

Asked to comment, a Verisign spokesperson referred The Register to statements made in the company's Form 8-K filing on Monday that offer reassurance to investors.

"As Verisign noted in its response [to Assistant Secretary Davidson], a broad discussion about the downstream markets is important because we believe price caps on .com wholesale prices have not always passed through to benefit end-users such as consumers and businesses," the financial filing states.

"Verisign believes that capped wholesale prices have contributed to the growth of an unregulated multi-billion dollar secondary market.

"This is an important discussion. Although the exchange of letters does not create an obligation to change .com wholesale pricing, Verisign is committed to these discussions and looks forward to working together with the NTIA on possible mutually agreeable solutions that benefit end-users, both business and consumers, throughout the DNS ecosystem."

In a set of FAQs that follow, Verisign makes clear that while the biz is open to discussion, it's not ready to commit to anything at this time, or even set a timeline.

So expect the wholesale price of .com domains to increase from $9.59 to $10.26 on September 1, 2024, as planned. ®

https://www.theregister.com//2024/08/06/verisign_well_talk_about_limiting/