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Here's the The Lowdown
from DN Journal,
updated daily
to
fill you in on the latest buzz going around the domain name industry.
The Lowdown is
compiled by DN Journal Editor & Publisher Ron
Jackson. |
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ICA
Warns Hundreds of Millions of Dollars at Stake
as .Com Price Freeze Set to Expire
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The
Internet
Commerce Association (ICA),
the non-profit domain industry trade
association founded in 2006 that
looks out for the interests of
domain registrants and developers,
is sounding an alarm bell. A
new press release from the organization
states that Verisign,
the exclusive .com registry
operator, is poised to see
additional windfall profits
unless the National Telecommunications
and Information Administration (NTIA)
intervenes.
The
ICA release says "Verisign is
expected to request a price
increase for .com domains when
its current ‘price cap’
agreement with the U.S.
Department of Commerce’s NTIA
expires on November 30, 2018."
The ICA goes on to
ask, "Will
NTIA impose a price increase on
millions of Internet users to
further enrich Verisign, “The Most
Profitable Company You’ve Never
Heard Of”, which is already
enjoying huge windfall profits?"
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As
most of our readers know,
.Com domain names are issued
exclusively by Verisign on a
wholesale basis and are are
in turn sold by authorized
domain name registrars to
the public. Domains ending
in the .com extension are, by |
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far,
the most popular on the
Internet with some 134
million .coms currently
registered, so a price
increase would affect
millions of individuals and
small-businesses throughout
the United States and around
the globe. |
The
ICA noted, "Verisign is a
public company with a market
capitalization of over $19
billion. Although the cost
of running the .com registry may be
as low as $3 per domain,
Verisign charges $7.85 to
their customers. Due to the
dominance of .com, Verisign has no
real competitive pressure on their
pricing. Before the U.S. government
stepped in to cap Verisign’s
prices in 2012, Verisign’s
previous contract permitted it to
raise prices 7% annually in
most years."
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They
went on to say "Thanks
to Verisign’s exclusive
contract to operate the
.com registry, granted
without a competitive
bidding process, Verisign
earned $457 million
last year, and enjoys
inflated operating margins
of over 60%.
Its windfall profits powered
a tripling of its stock
price over the past
five years – despite the
freeze imposed on .com
prices. Verisign
places fourth behind only Apple,
Facebook and Alphabet
(Google’s parent
company) in terms of revenue
per employee. Verisign uses
its excess cash to reward
its top four executives with
nearly $18 million in
compensation in 2017
– |
Image
from Bigstock |
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equivalent
to 7% of Verisign’s
operating expenses
(excluding cost of revenue).
In comparison, the
compensation of Oracle’s
and Adobe’s top
four executives is about 1%
of operating expenses." |
The
ICA believes, "Verisign will
likely seek an unjustified price
increase that would over time
effectively constitute a billion-dollar
“tax” on Internet users."
For
further information they are
directing .com domain registrants
to StopthePriceIncreaseof.Com.
A Change.org petition has
also been launched to raise public
awareness of this issue here.
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