I have a few thoughts.
Myth: The annual wholesale price for .com domain names – $10.26 as of Sept. 1 – is much higher than market value and is harming consumers.
I agree with them that $10.26 isn't above market value. I'd even say it's far below market value. However, I don't care. I don't want market value for something that's supposed to be operated in the public interest. I want
fair value. The .com registry should be run as cost+ and pricing should be set to benefit the public, not to enrich Verisign.
Normally I would argue that $10.26 is above market value for developing countries, but I think the aftermarket industry for .com domains is already setting market values far beyond the wholesale registration price which makes the point moot. I agree with Verisign pointing out the aftermarket accumulates large inventories of domains and I don't think aftermarket participants are adding much value for registrants beyond being willing to sell domains at market value rather than hoarding them forever.
Also, just to make things interesting, I'd argue that fair value might be above the current value, but only if the excess revenue isn't going to Verisign's bottom line. I think $20 renewals for .com would be fine if they baked in minimum margins for registrars, quadrupled the ICANN fee, and allocated money to set up a robust abuse handling system / organization.
I don't equate fair with inexpensive. I equate it with getting a reasonable amount of benefit for the amount of money registrants are paying and increasing the profits of a company like Verisign doesn't benefit registrants in any way.
Myth: Contracts to operate gTLD registries should be routinely rebid, and a presumptive right of renewal for such contracts is bad for consumers and the internet.
I sort of agree with this, but only if pricing is fair value rather than market value. I think it's fair to say that Verisign has done a good technical job of running the .com registry and it doesn't benefit anyone to re-assign it to someone that comes in as the lowest bidder. However, if Verisign thinks they should be able to charge market value for domains, they should also be subjected to market forces and that means re-bidding.
It's also foolish to assume Verisign will do a good job forever and the incentive to to continue doing a good job was decreased when the NTIA guaranteed Verisign perpetual control over .com in the 2018 contract. So, while I agree that by doing a good job of running the registry Verisign should be the default choice for renewal, they shouldn't be the
only choice which is what I think the 2018 contract does.
There needs to be an escape hatch that can be used to protect the interests of consumers.
Myth: Verisign’s operation of .com constitutes a “monopoly.”
I agree, but only because I think it's better to describe it as being
worse than a monopoly. They undeniably have a monopoly on domain renewals for people and businesses that have invested heavily in their .com domains and those people would be vulnerable to extreme price discrimination if .com pricing was merely a function of market value and negotiating power.
Anyone interested in an honest discussion would acknowledge there's a ton of competition between registries for domain
registration, but significant monopoly power for domain
renewals. No one is registering a domain for a year, dropping it, and moving to another TLD, regardless of price.
Myth: Verisign sets .com domain name prices for consumers.
I partly agree, but I think the argument is a weak way of insinuating Verisign is charging as little as possible while registrars are price gouging consumers. Verisign is
allowed to increase .com prices by 7% this year. There's nothing that
requires them to do so.
I also don't think retail pricing should be part of the discussion about wholesale price caps. Since there are 2,800 registrars, savvy registrants can shop around and anyone who isn't shopping around doesn't care too much about the price. There's plenty of competion at the registrar level. If anything, that portion of the industry has been commoditized to the point that it may even be detrimental to consumers.
The
American Economic Liberties Project estimates fair value of a .com to be $3.89 (wholesale) after 10% markup. I don't think 10% markup is enough, but there's enough of a difference between that and the current pricing that it makes me wish the .com contract required Verisign to disclose the financials relating to .com. We should get to see exactly how much money they're making.
Myth: The U.S. Government lifted price caps on .com domain names in 2018.
I think it's fair to say there's no hard price cap because it changes continously now and it always goes up. However, I agree with the spirit of this argument. There
is an upper bound on price increases and I think that's what's important. There's a cap at any given point in time, so it's reasonable to consider that a price cap.
