Prepare for a 7% .com domain price hike; Verisign seeks nod

Verisign the registry that runs the .com domain name has begun negotiations with ICANN to add price increases to its current contract to run .com domain names.

Verisign CEO James Bidzos discussed the updated Cooperative Agreement with the U.S. Government and how it applies to its contract to operate .com on the company’s earnings conference call yesterday.

The agreement allows for price increases of 7% per year in the last four years of each six-year contract extension. Also, the Cooperative Agreement does not require Verisign to get approval for future price increases as long as they are limited to the 7% per year/last four years agreed to in the current Cooperative Agreement, he said. The agreement can only be modified by mutual consent of both the U.S. government and Verisign, which suggests that future administrations would not be able to curtail price increases through the Cooperative Agreement.

Bidzos said that ICANN historically deferred to the U.S. government on .com pricing. In the 2012 renewal ICANN originally agreed to 7% increases but pulled that back when the U.S. government essentially vetoed it. The dynamic has definitely changed now, though, so it will be interesting to see how ICANN responds to the new Cooperative Agreement.

“ICANN and VeriSign have an agreement to cooperate and negotiate — there’s a written agreement to operate — cooperate and negotiate in good faith to amend the com registry as may be necessary for consistency with changes to the Cooperative Agreement,” said Bidzos.

“We have begun that process with ICANN to amend the agreement to make these changes including pricing. We’ve been through it a few times. It may take a number of months to work through it, but we’ll update you as appropriate,” said Bidzos.