Registry .com price stays at $7.85 – .com owners save 1B dollars – Renew a .com for 6 years, get 1 year for free…

On November 30th Verisign, Inc., the registry operator for .com, got it’s contact renewed for another 6 years. The U.S. Department of Commerce approved the renewal of Verisign’s agreement with the Internet Corporation for Assigned Names and Numbers (ICANN) to serve as the authoritative registry operator for the .com registry. The contract will run from December 1st, 2012 to November 30th, 2018.

Although Verisign got the contract renewal, it lost the right to raise the wholesale price of .com for the next 6 years. In the previous contract running from 2006 up to 2012 Verisign was able to raise .com prices 4 times. Verisign was hoping for a similar price scheme but the plan of raising prices 7% in any 4 of the next 6 years was denied by the US Department of Commerce.

Verisign’s current pricing of $7.85 per domain name registration will continue for the six-year term of the Agreement. Verisign no longer has the right to four price increases of up to seven percent over the six-year term. Price increases are limited to circumstances based on the imposition of new Consensus Policy or extraordinary expenses related to security or stability threats, and now require Commerce Department prior approval.

So lets calculate the savings of the .com owners in the next 6 years. If Verisign was able to increase .com prices in 4 of the next 6 years .com wholesale price would have reached $10.26 from $7.85 today.

Let’s say Verisign increased prices in the first 4 years:

Worst case scenario	(new price)	(price increase from current price)
Current price:	$7.85
1st Year	$8.39	$0.54
2nd Year	$8.97	$1.12
3rd Year	$9.59	$1.74
4th Year	$10.26	$2.41
5th Year	$10.26	$2.41
6th Year	$10.26	$2.41
		Total over 6 years: $10.63

Let’s say Verisign increased prices in the last 4 years:

Best case scenario	(new price)	(price increase from current price)
Current price:	$7.85
1st Year	$7.85
2nd Year	$7.85
3rd Year	$8.39	$0.54
4th Year	$8.97	$1.12
5th Year	$9.59	$1.74
6th Year	$10.26	$2.41
		Total over 6 years: $5.81

Let’s say Verisign increased prices following the pattern from it’s last contract. Verisign increased prices in 2007,2008,2010 and 2012, so similarly:

Verisign scenario	(new price)	(price increase from current price)
Current price:	$7.85
1st Year	$8.39	$0.54
2nd Year	$8.97	$1.12
3rd Year	$8.97	$1.12
4th Year	$9.59	$1.74
5th Year	$9.59	$1.74
6th Year	$10.26	$2.41
		Total over 6 years: $8.67

That is $8.67 savings for each .com domain in the next 6 years. Multiply that by the current number of .com registrations that is almost 106 million and you get almost 920 million dollars. And that number does not take into account the .com registration growth, so the total number should be close to 1 billion dollars.

That is 1 billion dollars that will stay in the .com owners pockets and not go to Verisign. Verisign is charging almost $2 more for .com that it does for .net. I think that is enough to keep them happy for the next 6 years.

Essentially with the $8.67 savings, if you renew a .com domain for 6 years, you get an extra year for free. Personally I saved about 30k USD over the next 6 years.