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After multiple delays, ICANN has released it's report on Proposed Amendment 3 regarding the contract with Verisign and potential price increases to .com among other things.
https://www.icann.org/en/system/files/files/report-comments-com-amendment-3-26mar20-en.pdf
It doesn't look particularly hopeful in that it appears like they continue to believe it's not really their job to get involved with pricing. This is their specific "analysis" regarding price increases:
ANALYSIS OF COMMENTS:
The changes in the proposed Amendment 3 which align certain terms of the .COM Registry Agreement with Amendment 35 of the Cooperative Agreement, and specifically the changes to the maximum allowable wholesale price of .COM registry services generated the overwhelming majority, 95%, of the 9,043 comments.
As set out in the announcement of the Proposed Amendment 3, one of the objectives of this amendment is the “Alignment of certain terms of the .COM RA with Amendment 35 to the Cooperative Agreement, including the .COM maximum pricing provision for registry services”. This objective stems from the 2016 Amendment 1 to the .COM RA. Under Amendment 1, the parties agreed to cooperate and negotiate in good faith to amend the .COM Registry Agreement (RA) as necessary to reflect changes made to Verisign's Cooperative Agreement with the U.S. Department of Commerce (DOC), and to amend the terms to preserve and enhance the security and stability of the Internet for the .COM TLD. This change to the maximum wholesale price provision in the proposed Amendment 3 was widely expected by the domain name industry as far back as November 2018 when Amendment 35 to the Cooperative Agreement was announced. However, roughly 50% of the comments received relating to the changes to the maximum allowable wholesale price provision suggested ICANN did not leverage the multistakeholder model or there was a lack of transparency within the process for how the amendment was negotiated even though many industry blogs and news articles anticipated these changes for .COM domain names, for example see: The Register, Domain Name Wire, and Forbes.
While some commenters requested market analysis or economic study prior to ICANN taking action on the proposed amendment, ICANN org is not a competition authority or price regulator and ICANN has neither the remit nor expertise to serve as one. Rather, as enshrined in ICANN’s Bylaws, which were developed through a bottom up, multistakeholder process, ICANN’s mission is to ensure the security and stability of the Internet’s unique identifier systems. Accordingly, ICANN must defer to relevant competition authorities and/or regulators, andlet them determine if any conduct or behavior raises anti-competition concerns and, if so, to address such concerns, whether it be through price regulation or otherwise. In its statement announcing Amendment 35 of the Cooperative Agreement, the DOC stated “The amendment repeals Obama-era price controls and provides Verisign the pricing flexibility to change its .com Registry Agreement with ICANN to increase wholesale .com prices.” In the Amendment 35 of the Cooperative Agreement, the DOC noted that the domain name marketplace had grown more dynamic and concluded that it was in the public interest that, among other things, Verisign and ICANN may agree to amend the .COM Registry Agreement to permit an increase to the wholesale price for .COM registry services, up to a maximum of seven percent in each of the final four years of each six-year period (the first six-year period commenced on October 26, 2018). The proposed Amendment 3 to the .COM RA reflects this change, essentially restoring the pricing structure from the 2006 .COM Registry Agreement.
Deferring to the DOC and DOJ for wholesale price regulation for .COM is not a new position for ICANN org to take. In November 2006, the .COM Registry Agreement approved by the DOC and the DOJ included price caps up to seven percent in four of six years. No economic study was conducted because ICANN deferred to the judgement of the appropriate competition authorities. Then in 2012, the DOC instructed Verisign to remove the price flexibility from the .COM Registry Agreement, which resulted in the freeze of the maximum wholesale price of US$7.85 for .COM registry services, as evidenced in Amendment 32 to the Cooperative Agreement. Again, the terms were applied as directed by the DOC and is reflected in the current .COM Registry Agreement.
In addition to the agreement between the DOC and Verisign to modify the wholesale price of .COM registry services, the DOC determined it is appropriate “to remove certain unnecessary and burdensome regulations, such as vertical integration, and only apply the restriction for Verisign to own a registrar to the .COM registry.” Applying the same logic as with the price controls, ICANN org is deferring to the relevant regulatory authority, the DOC. The change to the .COM RA applies the clarification provided by the DOC in Amendment 35, which continues to prohibit Verisign from owning or controlling a registrar in the .COM TLD. Further, if Verisign were to choose to participate as a registrar or reseller in new gTLD’s, they would be bound by Section 2.9 of the Base RA which requires any registry operator to abide by certain restrictions and processes for doing so, and these may include referral to the relevant competition authority.
https://www.icann.org/en/system/files/files/report-comments-com-amendment-3-26mar20-en.pdf
It doesn't look particularly hopeful in that it appears like they continue to believe it's not really their job to get involved with pricing. This is their specific "analysis" regarding price increases:
ANALYSIS OF COMMENTS:
The changes in the proposed Amendment 3 which align certain terms of the .COM Registry Agreement with Amendment 35 of the Cooperative Agreement, and specifically the changes to the maximum allowable wholesale price of .COM registry services generated the overwhelming majority, 95%, of the 9,043 comments.
As set out in the announcement of the Proposed Amendment 3, one of the objectives of this amendment is the “Alignment of certain terms of the .COM RA with Amendment 35 to the Cooperative Agreement, including the .COM maximum pricing provision for registry services”. This objective stems from the 2016 Amendment 1 to the .COM RA. Under Amendment 1, the parties agreed to cooperate and negotiate in good faith to amend the .COM Registry Agreement (RA) as necessary to reflect changes made to Verisign's Cooperative Agreement with the U.S. Department of Commerce (DOC), and to amend the terms to preserve and enhance the security and stability of the Internet for the .COM TLD. This change to the maximum wholesale price provision in the proposed Amendment 3 was widely expected by the domain name industry as far back as November 2018 when Amendment 35 to the Cooperative Agreement was announced. However, roughly 50% of the comments received relating to the changes to the maximum allowable wholesale price provision suggested ICANN did not leverage the multistakeholder model or there was a lack of transparency within the process for how the amendment was negotiated even though many industry blogs and news articles anticipated these changes for .COM domain names, for example see: The Register, Domain Name Wire, and Forbes.
While some commenters requested market analysis or economic study prior to ICANN taking action on the proposed amendment, ICANN org is not a competition authority or price regulator and ICANN has neither the remit nor expertise to serve as one. Rather, as enshrined in ICANN’s Bylaws, which were developed through a bottom up, multistakeholder process, ICANN’s mission is to ensure the security and stability of the Internet’s unique identifier systems. Accordingly, ICANN must defer to relevant competition authorities and/or regulators, andlet them determine if any conduct or behavior raises anti-competition concerns and, if so, to address such concerns, whether it be through price regulation or otherwise. In its statement announcing Amendment 35 of the Cooperative Agreement, the DOC stated “The amendment repeals Obama-era price controls and provides Verisign the pricing flexibility to change its .com Registry Agreement with ICANN to increase wholesale .com prices.” In the Amendment 35 of the Cooperative Agreement, the DOC noted that the domain name marketplace had grown more dynamic and concluded that it was in the public interest that, among other things, Verisign and ICANN may agree to amend the .COM Registry Agreement to permit an increase to the wholesale price for .COM registry services, up to a maximum of seven percent in each of the final four years of each six-year period (the first six-year period commenced on October 26, 2018). The proposed Amendment 3 to the .COM RA reflects this change, essentially restoring the pricing structure from the 2006 .COM Registry Agreement.
Deferring to the DOC and DOJ for wholesale price regulation for .COM is not a new position for ICANN org to take. In November 2006, the .COM Registry Agreement approved by the DOC and the DOJ included price caps up to seven percent in four of six years. No economic study was conducted because ICANN deferred to the judgement of the appropriate competition authorities. Then in 2012, the DOC instructed Verisign to remove the price flexibility from the .COM Registry Agreement, which resulted in the freeze of the maximum wholesale price of US$7.85 for .COM registry services, as evidenced in Amendment 32 to the Cooperative Agreement. Again, the terms were applied as directed by the DOC and is reflected in the current .COM Registry Agreement.
In addition to the agreement between the DOC and Verisign to modify the wholesale price of .COM registry services, the DOC determined it is appropriate “to remove certain unnecessary and burdensome regulations, such as vertical integration, and only apply the restriction for Verisign to own a registrar to the .COM registry.” Applying the same logic as with the price controls, ICANN org is deferring to the relevant regulatory authority, the DOC. The change to the .COM RA applies the clarification provided by the DOC in Amendment 35, which continues to prohibit Verisign from owning or controlling a registrar in the .COM TLD. Further, if Verisign were to choose to participate as a registrar or reseller in new gTLD’s, they would be bound by Section 2.9 of the Base RA which requires any registry operator to abide by certain restrictions and processes for doing so, and these may include referral to the relevant competition authority.
