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Will VeriSign Be Able to Engage in Tiered Pricing for .com Soon?

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According to the draft of new Generic Top-level Domains (gTLD) contracts for Section 7.3:

Price controls have been removed for 2008 in favor of the transparent pricing model outlined above.

Section 3.2.b) of the .com registry agreement states:

ICANN shall not apply standards, policies, procedures or practices arbitrarily, unjustifiably, or inequitably and shall not single out Registry Operator for disparate treatment unless justified by substantial and reasonable cause.

In my opinion, VeriSign (and other existing gTLD operators) are almost being invited to ask for their contracts to be amended to get the "same treatment" as new gTLDs in regards to the elimination of pricing caps. This once again could re-open the issue of tiered pricing that most have fought very hard against in order to protect registrants.

I believe the language of these proposed new gTLD contracts needs to have hard caps in place to protect existing gTLD registrants. New gTLDs are not effective substitutes for existing gTLDs, and thus "competition" isn't going to keep VeriSign's pricing power in check. Even with a 10-year transition period, it would shock the conscience if VeriSign was permitted to arbitrarily and unilaterally raise the renewal price of .coms to millions or billions of dollars per year (say $1 billion/yr for Google.com, $10 million/yr for Hotels.com, $50 million/yr for Cars.com, $30 million/yr for Games.com, or whatever the market would bear), effectively re-auctioning the entire list of premium domain names to the highest bidder, removing the existing registrant and replacing things with .tv style pricing.

Alternatively, all existing gTLD operators need to agree to language, before any new gTLDs are approved, that make explicit that the hard caps cannot be removed irregardless of whatever happens in other gTLDs.

By George Kirikos, President, Leap of Faith Financial Services Inc.

Related topics: Domain Names, ICANN, Internet Governance, Policy & Regulation, Registry Services, Top-Level Domains

 
   

Comments

ICANN staff misleadingly states that existing gTLD agreements don't have price controls George Kirikos  –  Oct 24, 2008 7:53 AM PDT

Just as a followup, I find it disturbing that the ICANN staff who prepared the draft agreements stated that for the existing 2005-2007 gTLD agreements for Section 7.3 (see page 11 of the Section 7.3 PDF above):

(ICANN’s unsponsored gTLD registry agreements have not included price
controls.)

This is demonstrably FALSE, see Section 7.3 of the current .biz, .info and .org agreements, each of which have in place a "Maximum Service Fee" due to the hard work of many in the ICANN community.

It's very alarming that such misleading information is being put out by ICANN in regards to the description of existing consumer protections that exist for registrants. ICANN's registries have managed to create a "presumptive renewal" for themselves at the expense of the ICANN community who would fare better if registry operations were tendered to the lowest bidder. At a minimum, existing domain registrants should expect presumptive renewal of their own domains at a constant price, or one that reflects a price index of global technology costs (which is generally far below that of the Consumer Price Index).

Thanks George - change made Kieren McCarthy  –  Oct 24, 2008 10:08 AM PDT

I'm not sure I agree with how "disturbing" it is, but you're right George, this must have slipped through the net. The document is being updated as we speak with an explanatory note that should address your concern. Thanks for the pointer.

And do please keep the comments coming. If you want to be certain that ICANN staff will see them, please use the comment page and emails we have set just for this purpose. You can find all the info you need at: http://www.icann.org/en/topics/new-gtld-comments-en.htm

I'd also like to take this opportunity to invite everyone to read the documents and provide their feedback. The more eyeballs on this, the better for everyone, and for the Internet.

Cheers

Kieren McCarthy
General manager of public participation, ICANN

Concerns NOT addressed George Kirikos  –  Oct 24, 2008 11:50 AM PDT

Your "correction" was to simply state in the amended document that sponsored gTLDs have not had price controls. However, my previously stated concerns have NOT been addressed, namely that this draft agreement opens up existing unsponsored gTLDs (i.e. .com, .net, .org, .info, .biz, etc.) to introduce tiered pricing, under their "equal treatment" clauses.

Public comment Kieren McCarthy  –  Oct 24, 2008 2:10 PM PDT

Hi George,

My response above was with regard to your comment about price controls on sponsored and unsponsored TLDs, not the whole post.

As to your wider question about whether the wording could in future allow for existing registries to ask for changes in their contracts, well that's what this public comment period is for.

You are raising a theoretical future possibility based on draft documents. The answer to that is always going to be: raise it as part of the public comment process and the community can discuss it.

As you know, since I can see you have already posted your point there (thank you btw), as your point concerns the draft base agreement, the best email address for sending a public comment is gtld-transition@icann.org and you an view all comments on this issue at http://forum.icann.org/lists/gtld-transition/.

Thanks again George, this sort of review where not only the documents themselves but also the potential future impacts of what they contain are discussed is exactly the sort of thing that this public comment period hopes to elicit.

Kieren

Do Your Job George Kirikos  –  Oct 24, 2008 2:48 PM PDT

ICANN should not be presenting half-baked proposals that re-open settled issues, and leave it up to volunteers to find all the loopholes. How many lawyers are on ICANN's payroll, including contractors like Jones Day, who should have reviewed it first, as they should have reviewed the .info/biz/org draft agreements last time?

The draft agreement could have stated that there would be a price cap of $6 per domain-year, as a base upon which to start the debate. Let the community start from there, instead of having to start from no price cap whatsoever. When's the last time ICANN posted a draft contract that erred on the side of domain registrants? Hint — never! It's a major cause of cynicism in the ICANN process that we must constantly defend hard fought gains due to these supposed "slips." I expect the usual shills for the registry operators to come up with their "compromise" scenarios again, like they attempted for .info, .biz and .org. Eventually, they were able to get a compromise of 10% annual price increases, even higher than VeriSign's 7% increases!

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