ICA’s statement on the new .COM registry agreement

ICA issued a statement after ICANN announced changes and price increases to the .COM registry agreement with Verisign:

ICANN’s announcement that it “reached a proposed agreement” with Verisign to amend the .com registry agreement raises serious concerns and questions. The Internet Commerce Association will be closely studying the proposed changes and will deliver its comments to ICANN in due course.

Amongst the preliminary concerns and questions that ICANN’s announcement raises are the following

1. The proposed price increase imposes hundreds of millions of dollars of unjustified expenses on .com registrants for the sole benefit of a registry provider that is already grossly overpaid for the services it provides. That ICANN puts the interest of one powerful company over the interests of millions of registrants raises questions as to ICANN’s legitimacy, its accountability and its governance structure.
2. Why does ICANN go through the charade of putting the agreement that it already reached out for public comment? Surely the time to seek meaningful public feedback is before reaching an agreement. Moreover, as we saw with the overwhelming public opposition to the renewed .org Registry Agreement, ICANN just does what it wants anyhow. ICANN’s pretense that it is responsive to the public interest is a farce.
3. Who wants higher .com prices? Is there any stakeholder or group, other than Verisign, that is eager to raise prices on .com? There isn’t, save and except perhaps other registry businesses that envision being able to raise their own prices as .com pricing goes higher. If ICANN was truly looking after the public interest and was truly acting in the best interest of stakeholders and registrants in particular, there would be no impetus whatsoever to raise prices.
4. ICANN’s express claim that it “is not a price regulator” is nothing more than a misguided effort at misdirection in respect of its actual obligations and duties as the steward of the .com registry. First, of course ICANN is not a regulator – only governments are regulators. Rather, ICANN is a steward that is mandated to look after the public interest, and is the sole party able to negotiate terms with its registry operator service providers. Accordingly, ICANN does not need to be a regulator to prevent unjustified price hikes on .com domain names – it just needs to fulfil its duty as the steward.
5. In fact, ICANN expressly admits, in the very same statement wherein it states that “it is not a price regulator”, that “pricing certainty [will be achieved] by limiting the potential maximum wholesale price for .COM domain names”. Pricing certainty is one of the most fundamental obligations of a steward entrusted with ensuring the stability of the Internet, as without pricing stability on .COM domain names massive upheaval could occur if captive market registrants face unrestrained pricing. ICANN goes on to state, “the .COM TLDis an important part of global commerce, making its continued secure, stable and resilient operation a top priority for both ICANN and Verisign”. And presumably, ICANN and the Department of Commerce realizes that, and that is precisely why price caps are necessary in the absence of the preferable competitive marketplace where registry contracts are put out for competitive bid, thereby assuring that the fees imposed by the .com registry for providing registry services reasonably reflect market rates.
6. The price increase from the current wholesale price of $7.85 to the maximum price in 2024, of $10.26, represents a $2.41 annual increase. That means that in October 2024, Verisign will be receiving an additional windfall of $344,630,000 per year, assuming that .COM registrations do not rise even further as they are expected to. Verisign is already making billions of dollars in pure profit from its ICANN contract, and there is absolutely no reasonable justification for increasing its revenue other than that it is good for Verisign. It is not good, however, for anyone else. Once again, ICANN is the victim of its long history of making woefully improvident deals on behalf of the Internet community. The pitiful $20 million that ICANN is to receive when Verisign is poised to make billions off of this deal is just the latest example.