A dispute over the cost of dot-com domain name has spilled over in the US Congress last week. The dispute followed the lawsuit settlement reached on March 1, 2006 between Internet Corporation for Assigned Names and Numbers (ICANN) and VeriSign. The Domain name organization grant Verisgn the right to raise fees on .com domains by 7% for 4 of the next 6 years.
The settlement, that has been approved by ICANN’s board by a 9 to 5 votes, ended the legal battle which started with VeriSign’s move to take control of all unassigned .com and .net domain names in 2003.
The VeriSign’s monopoly provoked a debate in Capitol Hill about the legality of the deal between the nonprofit organization and VeriSign. If the deal face approval by the Commerce Department and the House of Representatives it will pave the way for VeriSign to raise domain fees, without demonstrating a justification for the hikes.
The guaranteed rise of the domain prices struck some members of the House of Representatives’ Small Business Committee as unreasonable. While the the domain name organization, created by the Clinton administration, makes the decisions about domain names on its own. The settlement with VriSign however needs an approval by the US Commerce Department. That requirement has made the dispute a part of political agenda.
The domain registrars that offer .com registration will pay higher prices if the bill passes the House.
“Granting a monopoly and an infinite ability to raise prices to American small businesses, with only the approval of a regulator that is now getting a slice of the price increase, is an unworkable situation; it’s unacceptable,” said Champion Mitchell, a chairman and CEO of Network Solutions.
During Wednesday’s hearing in Capitol Hill, some domain registrars attacked the deal as a way to let VeriSign to squeeze more money from consumers for the next few years.
These guaranteed price hikes would bring about $280 million in annual revenue to VeriSign over the next 6 years, if domain prices keep at the their current level. Those will be paid from small businesses owners. 10.5 million american businesses are currently own one or more domain names.
If the 7% price increase on dot-com domains is going to happen for 4 of the next 6 years, the extra cost that consumers will pay is $1.86/year per domain name.