Key Points
- Verisign seeks ICANN approval to raise .com domain wholesale prices by up to 7 per cent annually
- Price increases would apply in the last four years of each six-year agreement period
- US government previously vetoed similar 7 per cent increase proposal in 2012
Verisign, the American company that operates the .com domain registry, has begun negotiations with the Internet Corporation for Assigned Names and Numbers (ICANN) to secure approval for wholesale price increases of up to 7 per cent annually on .com domain names. The price hike, if approved, would affect millions of businesses and individuals worldwide who rely on .com addresses for their online presence.
James Bidzos, chief executive officer of Verisign, confirmed the negotiations during an earnings conference call. The company operates the .com, .net and .org top-level domains under agreements with ICANN and the United States Department of Commerce. These core registry functions constitute the company’s largest and most significant business unit.
The negotiations follow an agreement Verisign signed with the US Department of Commerce in October of the previous year. That agreement permits the company, without requiring further departmental approval, to negotiate with ICANN for price increases of up to 7 per cent in each of the last four years of every six-year period covered by the .com Registry Agreement.
ICANN negotiations
The revised Cooperative Agreement between Verisign and the US government fundamentally changes the regulatory landscape for .com pricing. Under the new terms, the company no longer requires government approval for future price increases, provided they remain within the 7 per cent annual ceiling during the specified four-year windows.
ICANN, the non-profit organisation that coordinates the global domain name system, has historically deferred to the US government on .com pricing decisions. This deference was evident in 2012, when ICANN initially agreed to 7 per cent price increases but withdrew that approval after the US government effectively vetoed the proposal.
“ICANN and VeriSign have an agreement to cooperate and negotiate. There’s a written agreement to operate, cooperate and negotiate in good faith to amend the .com registry as may be necessary for consistency with changes to the Cooperative Agreement,” Bidzos said during the earnings call.
He added that the company has initiated the amendment process with ICANN. “We’ve been through it a few times. It may take a number of months to work through it, but we’ll update you as appropriate,” Bidzos said.
Impact on registrants
The Cooperative Agreement between the US government and Verisign can only be modified through mutual consent of both parties. This provision suggests that future US administrations would have limited ability to curtail price increases through the agreement mechanism, as any changes would require Verisign’s agreement.
For Indian businesses and individuals, a 7 per cent annual increase in wholesale .com domain prices would translate into higher registration and renewal costs. Domain registrars typically pass wholesale price increases on to end customers, often with additional markups. Indian companies with multiple .com domains for their brands, products and services would face cumulative cost increases over the four-year price hike period.
The .com domain remains the most widely recognised and commercially valuable top-level domain globally. Millions of Indian businesses, from large enterprises to small traders establishing their first online presence, use .com addresses. Any price increase at the wholesale level affects the entire ecosystem of registrars, resellers and end users.
The outcome of negotiations between Verisign and ICANN will determine whether the price increases proceed. Bidzos indicated the process could take several months to complete, with the company committing to provide updates as discussions progress.
Your Questions, Answered
How much could .com domain prices increase?
Verisign is seeking approval to raise wholesale .com domain prices by up to 7 per cent annually during the last four years of each six-year agreement period.
Why does Verisign need ICANN approval for price increases?
Verisign operates the .com registry under agreements with both ICANN and the US Department of Commerce. While the revised US agreement no longer requires government approval, ICANN's consent is still needed to amend the registry agreement.
When will the .com price increase take effect?
Negotiations between Verisign and ICANN are ongoing. CEO James Bidzos indicated the process may take several months to complete, with no confirmed implementation date announced.
Did the US government previously block .com price increases?
Yes. In 2012, ICANN initially agreed to 7 per cent price increases but withdrew approval after the US government effectively vetoed the proposal.
