New ICANN-VeriSign agreement (2012-2018)

[Earthian]

on the 1st of December 2012 the new agreement between ICANN and Verisign regarding .com went into effect



2012-2018 .com agreement



under the new agreement (and similarly with the previous one) Verisign will be able to raise the wholesale .com prices by 7% per year (for up to 4 of the 6 years of the agreement)



the current wholesale price for .com is $7.85



the ICANN fee is raised from $0.18 to $0.25


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[TheBaldOne]

I wonder if Verisign have a specific department to come up with reasons for their pricing, a bit like a 'black room' department? :P

 

[DubDubDubDot]

7.85 Verisign
0.18 ICANN
8.67 renewals with coupon
Godaddy profit = 0.64

Let's just assume GoDaddy keeps it at 0.64 profit for themselves (they won't). These would be the new renewal fees with coupon after the 7% increases...

8.40 + .25 + .64 = 9.29
8.99 + .25 + .64 = 9.88
9.61 + .25 + .64 = 10.50
10.29 + .25 + .64 = 11.18

That's at least $2.51 extra per domain. Someone with a 200 domain portfolio is going to pay an extra $500+.

 

[gpmgroup]

http://domainnamewire.com/2012/11/30/u-s-goverment-just-gave-com-domain-owners-a-10-78-tax-break/

 

[Jasonn]

http://domainnamewire.com/2012/11/30/u-s-goverment-just-gave-com-domain-owners-a-10-78-tax-break/

yeah, i thought this wasn't happening now.

 

[Earthian]

according to this DNN article ...
"Shares of Verisign (NASDAQ: VRSN) are down 15% in early trading after the company announced that its contract to run .com had been renewed without price increases."




according to this ICA article ...
"VeriSign and the Department of Commerce (DOC) announced this morning that the Agreement allowing VeriSign to remain in place as the .Com registry operator had been approved with one major alteration -- .Com wholesale prices will be frozen at $7.85 for the six-year length of the Agreement absent extraordinary circumstances."




according to this WSJ article ...
"The department, however, stunted VeriSign's ability to raise prices, ending a plan that would have allowed the company four automatic price increases of up to 7% during the term. Instead, VeriSign must ask for Commerce Department permission if it wants to raise prices to cover extraordinary costs from security or stability threats. The company also can ask for price increases justified by new consensus policies created by the broader Internet community."




according to Section 7.3.d.ii of the ICANN agreement ...
"Registry Operator shall be entitled to increase the Maximum Price during the term of the Agreement due to the imposition of any new Consensus Policy or documented extraordinary expense resulting from an attack or threat of attack on the Security or Stability of the DNS, not to exceed the smaller of the preceding year's Maximum Price or the highest price charged during the preceding year, multiplied by 1.07."




I think the security/stability expenses clause was similarly in the 2006 contract

and the price hikes did occur

so it is either the "same" ... or they made it more difficult to make the increases (eg. requiring DoC permission like the WSJ article says , supposing no permission was needed before)

the reference to "4/6 years" in the original post was according to a couple of articles I found online , but , in retrospect , I think they were prior to the final agreement and they were referring to the original draft

browsing through the 2012 ICANN agreement right now I did not find any mention of "4/6" ... therefore , they can either do it any year (all?) ... or maybe even none if the DoC does not authorize the increases easily

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