TELECOM Digest OnLine - Sorted: Limits Set on .com Price Increase

Limits Set on .com Price Increase

Anick Jesdanun (
Mon, 30 Jan 2006 17:57:51 -0600

Deal Places Limits on '.com' Price Hikes
By ANICK JESDANUN AP Internet Writer

VeriSign Inc. must meet certain conditions in order to fully raise
fees for '.com' domain names under a new tentative settlement reached
with ICANN, the Internet's main supervision/oversight agency.

The new deal also would prevent VeriSign from ultimately passing on to
domain name holders separate surcharges that help fund the agency, the
Internet Corporation for Assigned Names and Numbers, or ICANN.

The revised accord would end a longstanding legal dispute between the
two powerhouses behind the computer servers that, as the Internet's
core address books, help people find Web sites and send e-mail.

The new deal follows months of public input and, ICANN general counsel
John Jeffrey said Monday, requires final approval by the boards of
both ICANN and VeriSign after another public-comment period.

In a statement, VeriSign called it 'the best efforts of both VeriSign
and ICANN to resolve differences that have been present for several

If approved, both sides would drop lawsuits filed against each other
over, among other things, the introduction by VeriSign of a
controversial search service called Site Finder.

The most direct change for Internet users involves domain name fees.

Currently, VeriSign charges domain name resellers, called registrars,
$6 per '.com' name; registrars can then charge domain name buyers
whatever they like, incorporating that $6 annual fee into the basic
price. If the deal is approved, VeriSign would be allowed to raise
that fee, which registrars could then pass along to customers.

The new settlement would limit those increases.

In any two of the next six years, VeriSign could raise fees by up to 7
percent a year only in response to a security threat or to comply with
an ICANN mandate.

But that leaves four years in which Verisign could raise rates by 7
percent annually without having to justify the increases, objects
Network Solutions Inc., a registrar that VeriSign sold in 2003.

With more than 40 million '.com' names in use, a 7 percent increase
could generate as much as $17 million for VeriSign in the first year

The old deal, reached in October, would have allowed VeriSign to raise
the fees every year without conditions.

Network Solutions and other critics also complained that VeriSign
still would get first rights to a renewal in 2012, thwarting any hopes
competitors had for open bidding.

But Network Solutions did applaud ICANN for prohibiting VeriSign from
passing along a separate surcharge for '.com' names.

Under the old settlement, VeriSign would have collected for ICANN up
to 50 cents per '.com' name.

Now the company must pay ICANN a lump sum on its own -- $6 million in
the first year, increasing to $12 million in 2009.

The new settlement also makes clear that ICANN isn't immediately
approving Site Finder, which VeriSign introduced in late 2003 to help
Internet users find Web sites when they mistype addresses.

Following complaints that Site Finder broke some Internet tools like
spam filters and gave VeriSign an unfair competitive advantage in
search, the company suspended the service.

Verisign subsequently sued ICANN, complaining that the agency was
making it difficult for the company to create new businesses. ICANN

With the settlement, changed little in the revision, ICANN would
create procedures and deadlines to more quickly review any new
services VeriSign might introduce.

The new deal also adds performance benchmarks and privacy protections.

VeriSign still faces two lawsuits over the proposed settlement, and
the plaintiff in one of them, calling itself the Coalition for ICANN
Transparency, said the new terms were inadequate. ICANN also is a
defendant in the CFIT lawsuit.

'It's pretty clear that VeriSign and ICANN are aware of the areas that
are most objected to by the Internet community, but I do think that
the revision posted offers change in name only,' said John Berard, a
spokesman for the group.

Copyright 2006, The Associated Press.

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