Prices for .com domains likely to jump thanks to Trump

The price of .com domains could be about to go up and you can thank President Donald Trump.

Thanks to a new contract, Verisign can now jack up prices on .com domains — and companies could pass those higher costs onto consumers. 

First, here are the organizations you need to know about. The Internet Corporation for Assigned Names and Numbers (ICANN) is a not-for-profit corporation that has authority over the internet’s domain name system. The registry, Verisign, manages all .com domains on the web, and sells them wholesale to registrars like Namecheap and GoDaddy, which sell them to individuals and organizations.

Why is this happening? It all stems from a policy decision made by the Trump administration, as Engadget points out.

In 2018, National Telecommunications and Information Administration (NTIA), which is part of the U.S. Department of Commerce, released a saying it was repealing “Obama-era price controls” in order to make modifications “in line with policy priorities of the Trump Administration.” 

ICANN, the arbiter of the contract with Verisign, is taking a lot of heat. It defended itself in a earlier this week, saying it’s “not a price regulator and defers to the U.S. Department of Commerce and the U.S. Department of Justice for the regulation of pricing for .COM registry services.”

However, ICANN has the authority to actually allow prices increases.

“ICANN seems to claim that NTIA sets the prices, but this is false,” said Zak Muscovitch, general counsel for the Internet Commerce Association, a nonprofit trade organization representing web developers and domain name holders, in a statement to Mashable. “NTIA specifically said that it was up to Verisign to pursue this with ICANN and that ICANN *may* decide to raise them. But there is absolutely no reason, none, to raise prices, other than to give Verisign more money.” 

Domain registrars and internet activists are sounding the alarm

Verisign has agreed to pay $20 million to ICANN over the next five years with terms stating that the funds go toward enhancing the security of the domain system.

According to the new terms of ICANN’s contract, Verisign can raise .com prices by 7 percent each year for the next four years. There would then be a price freeze for two years. In 2026, Verisign could once again start raising .com prices by 7 percent for another four years.

Since 2012, the previous contract has locked in Verisign’s annual .com pricing at $7.85 per domain. The new contract could raise the wholesale .com price to more than $13 over the next decade.

As a registry, Verisign does not sell .com domain names directly to the public. These are the prices that domain registrars, like Namecheap and GoDaddy, pay. And higher domain prices might push these registrars to charge customers more.

Domain registrars and internet activists are sounding the alarm over the new deal between ICANN and the .com registry.

Richard Kirkendall, CEO of domain registrar Namecheap, has accused ICANN and Verisign of making changes “in secret.” However, Verisign points to statements it has made since 2018, including its most recent joint press release with ICANN on Jan. 3 of this year.

The ICA estimates that Verisign is “poised to reap a $340 million annual windfall in addition to its already incredible profit margins” thanks to the new contract. The organization set up a website called “Stop the Increase of .COM” to protest the price changes.

And the new contract allows Verisign, the .com registry, to operate its own registrar. The terms don’t allow it to sell .com domains directly, but Namecheap believes that Verisign could sell them through a third-party registrar as a reseller. 

If Verisign starts selling .com domains direct to consumers, while also setting its own wholesale prices, other registrars worry they won’t be able to compete. There could also be antitrust issues. Think Apple promoting its own apps in its App Store, or Amazon highlighting its branded products on its marketplace.

Verisign said the changes in its terms with ICANN just provide the company with pricing flexibility and does not mandate it to actually raise prices or open its own registrar. It also pointed out how many domain registrars have increased registration prices to consumers regardless of the fact that that Verisign’s wholesale pricing has remained frozen since 2012.

Namecheap, the Internet Commerce Association, and others urged people to make their voice heard during ICANN’s , which on Feb. 14.

Image: Mark J Terrill/AP/Shutterstock

This isn’t the first time activists have complained about ICANN. Last year, it completely from its contract with Public Interest Registry (PIR), which oversees the .org domain, allowing PIR to raise prices as much as it would like.  

During the public comment period for .org, more than 3,500 responses were logged, with 98 percent of them in support of keeping the price caps. However, ICANN removed the price caps on .org anyway.

Verisign said there is a big difference between the .org and .com contract changes: pricing certainties. Unlike .org, the .com domain will retain its price cap. Consumers can be assured that their registration prices would not go up more than 7 percent each year.

The company claimed there were only a handful of comments during the first month of ICANN’s public comment period before domain speculators — those who invest in hundreds, thousands, or even hundreds of thousands of domains to sell on the aftermarket — started campaigning against the changes.

A short time after the .org price cap removal, PIR’s parent company it was selling the .org registry to Ethos Capital, a private equity firm. The of events leading to the sale among internet activists and those in the industry. 

The private equity takeover of the .org domain extension is currently on hold after an inquiry from the California Attorney General, who is now the sale.

“With both the .org debacle and the pending .com fiasco, we are seeing ICANN making some of the most important decisions it has ever made despite the public interest and despite overwhelming opposition,” Muscovitch told Mashable. “Nobody wanted the removal of price caps on .org, yet that is precisely what ICANN did.”

“With .com, ICANN is poised to do it again,” he said.