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Verisign Dodges a Bullet, Gets to Keep .COM Pricing

John Levine

According to a filing with the SEC, the Department of Commerce renewed the .COM agreement for six more years.

The renewal was held up until the last minute (the old agreement expired yesterday) due to antitrust concerns, specifically about pricing. The main change in the new agreement is that Verisign is no longer allowed to increase the price above the existing $7.85, except under some unlikely conditions such as an extremely expensive security problem, or Verisign persuades the government that the .COM domain is no longer dominant.

The reason I say they dodged a bullet is that there is no economic justification at all for the $7.85 price. Verisign has never, as far as I can tell, offered any basis for their pricing beyond the obvious facts that a whole lot of people are willing to register domains at the current price, and they provide good service.

The .NET domain, which is run identically to .COM, same service, same servers, same everything else, costs $5.86 rather than $7.85. In an investigation of monopoly pricing, one normally looks to see cost justification of the prices. Verisign competed very vigorusly for the .NET renewal in 2005, and did not ask for price increases beyond what they'd already agreed when it was renewed in 2011, so they presumably consider .NET a profitable and desirable business. An obvious question that has never been answered is why they can't run .COM for the same price. Evidently that question still hasn't been asked, since the .COM price stayed the same.

The new agreement has some other minor interesting aspects. It allows ICANN to require the registry to switch from a thin to thick WHOIS, or to the WEIRDS protocol under development in the IETF if the IETF ever finishes it.

The major winners from the price restraint is more likely to be registrars than registrants. I am a small reseller for Tucows, who pass the registry fee straight through with a fixed surcharge and let resellers charge whatever they want. If the .COM price had gone up from $7.85 to $8.40 as it was scheduled to, I probably would have eaten the extra cost and not raised prices until next year, but now I don't have to.

By John Levine, Author, Consultant & Speaker. More blog posts from John Levine can also be read here.

Related topics: Domain Names, Registry Services, ICANN, Top-Level Domains

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