The Internet Commerce Association has always been at the forefront of the .com pricing issue. In fact, .com pricing was one of the reasons that the ICA was founded in 2006. In 2012, the ICA was instrumental in freezing .com wholesale pricing at $7.85. In 2018, despite the concerted efforts of many in the domain name community including the ICA and despite entreaties to extend the 2012 price caps, the price cap was unfortunately lifted by NTIA with ICANN’s agreement, notwithstanding a public outcry and a faulty public comments process which we objected to directly with ICANN.
The ICA recognizes that stability and security in .com registry operations is crucial to the success of the Internet and to our member’s businesses, and that Verisign has competently managed the .com registry on behalf of ICANN, yet competitive pricing for .com registrations continues to be a crucial issue. Considering the importance of pricing for ICA members and all .com registrants, after writing to the NTIA regarding the pending renewal of the Cooperative Agreement, we were pleased to meet with them to provide our perspective on .com pricing. This came after members of the United States Congress expressed concern to NTIA over, inter alia, “excessive domain name price increases” under the 2018 “Cooperative Agreement” which permits seven per cent price increases in four out of every six years.
On August 2, 2024, NTIA announced it would not be terminating the Cooperative Agreement, but that it would be discussing with Verisign, “possible solutions that benefit end-users, both businesses and consumers, and serve the public interest.” This is potentially encouraging since the ICA has for many years been calling for solutions to the .com pricing problem. The ICA’s concern is not with who the operator of the .com registry is. Verisign has operated the .com registry to-date, in a secure and stable manner. Rather, we believe that regardless of who the operator is, .com pricing should be the product of competitive market forces. In the absence of competitive market forces to determine the price of .com registrations, price caps are the answer, however the problem with the current price caps regime under Amendment 35 of the Cooperative Agreement is that they perpetually rise (seven per cent in four out of six years) without any economic rationale beyond the understandable interest of Verisign to increase its operating margin which are virtually unmatched in any industry and solely the result of its exclusive license from ICANN.
That is why we are encouraging NTIA to focus on ensuring that price caps have some relation to both the cost of operating the .com registry and a reasonable, if not healthy operating margin. We believe that it in the absence of actual competitive market forces determining price, it is crucial that an economic study be conducted to determine what a reasonable price would be for .com registrations, having regard to the costs of operating the .com registry on behalf of ICANN while also taking into consideration the need to make a reasonable profit from the exclusive license. As a trade association focused on Internet commerce, although we are generally uncomfortable with determining prices by any method other than via a competitive marketplace, this method is the next best thing in the circumstances.
The ICA will continue to strongly advocate for reasonable .com pricing and looks forward to the day when .com registry pricing will better reflect the cost of operating the registry on behalf of ICANN while providing a reasonably healthy profit margin for its operator.