The Internet Commerce Association is launching a campaign calling for the National Telecommunications and Information Administration (NTIA) to stop an expected application for an increase in the .com registry fee when the current ‘price cap’ agreement expires on 30 November 2018. The ICA is calling any increase in the fee “an unjustified price increase that would over time effectively constitute a billion-dollar ‘tax’ on Internet users.”
The ICA, a non-profit trade organisation representing domain name investors, website developers and related companies, says that they expect Verisign to seek the price increase from the NTIA, which comes under the U.S. Department of Commerce. Any increase, the ICA claims, would “further enrich Verisign, ‘The Most Profitable Company You’ve Never Heard Of’, which is already enjoying huge windfall profits?”
The ICA claims the cost of running the .com registry may be as low as $3 per domain, but Verisign charges $7.85 to registries. The ICA further claims that 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.
The ICA notes in their announcement that “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 – 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 concludes their announcement saying that “not content with their current windfall profits, Verisign will likely seek an unjustified price increase that would over time effectively constitute a billion-dollar ‘tax’ on Internet users.”
To garner support for their campaign, the ICA has launched a petition on change.org to raise public awareness here.