VeriSign (NASDAQ: VRSN) announced a 7% price increase for .com and a 10% increase for .net, the maximum allowed under Verisign’s contracts with ICANN:

VeriSign announced that as of Oct. 15, 2007, the registry fee for .com domain names will increase from $6.00 to $6.42 and that the registry fee for .net domain names will increase, from $3.50 to $3.85. This will be the first registry fee increase for .com and .net since the fee structure was put in place by ICANN in 1999.

With roughly 65 million .com domain names and more than 9 million .net domain names registered, VeriSign will get about $30 million more per year.

The Internet Commerce Association (ICA) called upon Congress and the Department of Commerce to exercise the strongest possible oversight over the increase in registry fees. According to the ICA Legal Counsel Philip S. Corwin, the price increases “come at a time when the pricing of other Internet services such as bandwidth, access and anti-hacker protection continues to fall. The announced increase for .Com is particularly questionable, given that had the contract been put out for competitive re-bid rather than negotiated in secret to resolve litigation brought by VeriSign against ICANN, the base price would likely be at least one-third to one-half as much as VeriSign’s $6 starting point.  Indeed, .Net pricing fell by one-third when a re-bid brought market forces to bear, and the .Com registry fee should be less than the $3.50 now in effect for .Net given the greater operating economies of scale for that far larger top level domain.”

ICA Press Release:

The Internet Commerce Association (ICA) Calls Upon Congress to React to Verisign Price Hikes

The Internet Commerce Association (ICA) calls upon Congress and the Department of Commerce to exercise the strongest possible oversight over the increase in registry fees for .Com and .Net just announced by VeriSign. The seven percent increase for .Com and the ten percent increase for .Net are the maximum allowed under its registry operator contracts with ICANN, and come at a time when the pricing of other Internet services such as bandwidth, access and anti-hacker protection continues to fall. The announced increase for .Com is particularly questionable, given that had the contract been put out for competitive re-bid rather than negotiated in secret to resolve litigation brought by VeriSign against ICANN, the base price would likely be at least one-third to one-half as much as VeriSign’s $6 starting point.  Indeed, .Net pricing fell by one-third when a re-bid brought market forces to bear, and the .Com registry fee should be less than the $3.50 now in effect for .Net given the greater operating economies of scale for that far larger top level domain.
 
When the Department of Commerce approved the current .Com registry agreement on November 30, 2006 it insisted upon an amendment by which it retained oversight over any changes to its pricing provisions, and stated that VeriSign’s future operation of .Com would be approved only if the Department concluded that the approval will serve the public interest in the operation of the .com registry, and the provision of registry services at reasonable prices, terms and conditions. The ICA believes that responsible public officials engaging in thorough scrutiny of this announced price increase are likely to conclude that the new price for .Com is unreasonable and that VeriSign’s announced intent is inconsistent with the general public interest as well as the specific interest of domain name registrants.

ICA Counsel: Philip S. Corwin
Partner: Butera & Andrews
1301 Pennsylvania Ave., NW
Suite 500
Washington, DC 20004 

ICA contact:

Jude Augusta: 603.601.0646

info@internetcommerce.org

About The ICA:
The Internet Commerce Association is a professional organization of domain name interest holders participating in decisions affecting domain name pricing and governance.  The membership includes individual domain-name holders. The Board is comprised of membership representing: IREIT.com, TARGETEDTRAFFIC.com, Oversee.net, Sedo.com, Straat Investments, Neulaw.com, DNJournal.com, and Domain Investor Frank Schilling.