Tech Industry

Price hikes for .com could be curbed

ICANN, VeriSign come up with a revision to a deal that caps .com domain price rises at 7 percent for four years.

A tentative deal in an ongoing dispute over lucrative .com domain names may curb price hikes by VeriSign, which enjoys a monopoly over those registrations.

The Internet Corporation for Assigned Names and Numbers, the nonprofit organization that oversees the names, published the revised agreement Sunday. Over the past few months, ICANN has been vetting public comments on an initial lawsuit settlement, announced in late October.

That original document drew fire from some who said it would create significant domain name price increases for consumers. Critics also had more broad concerns about a proposal to grant VeriSign permanent control over the .com registry, which they said could have repercussions in the domain name marketplace.

The revised settlement, which has a six-year term, retains VeriSign's "presumptive right" to renew its contract for .com registry control in 2012.

It would set the baseline price for domain registry at $6 through the end of 2006. That sum, which goes to ICANN, is passed on from VeriSign to third-party domain name registrars, which can then choose to charge their customers whatever amount they please.

Starting in 2007, VeriSign would be permitted to raise that price by up to 7 percent--far above the official rate of inflation--but only during four years of the agreement's six-year term. The new deal leaves room for additional price increases, but only if they can be attributed to new ICANN policies or "documented extraordinary expense resulting from an attack or threat of attack on the security or stability of the DNS."

The company is also free to raise prices upon subsequent renewals of the .com agreement. A summary of the document noted that "nothing prevents competition agencies such as the U.S. Department of Justice to review price increases at any time."

At the same time, VeriSign must pay a lump sum to ICANN that will begin at $6 million and increase to $12 million over the next two years, based on the total number of domain name registrations it records. That fee "will not be passed on directly" to third-party registrars, as it was in the previous version of the agreement, but rather will come from VeriSign's pocket, a summary document said.

The new document also adds a section establishing "performance requirements" for the .com top-level domain that weren't present in the earlier document. In addition, it poses a tentative requirement, absent in the original settlement, that VeriSign operate a centralized "Whois" directory for .com registrants--though only if ICANN determines that doing so is "reasonably feasible."

The revised settlement, which would effectively end ongoing litigation between ICANN and VeriSign, must go through another public-comment period and receive approval from the ICANN board before becoming final.

Meanwhile, a legal challenge against the original deal is still pending in California court.

A lobby group known as the Coalition for ICANN Transparency, sued VeriSign and ICANN last November, arguing that the agreement, as drafted, would amount to a monopoly and foster anticompetitive practices. The revised version "makes cosmetic changes but leaves the original deal largely intact," said coalition spokesman John Berard, who added that the group plans to press on with its legan action.