It looks like Verisign will get the green light to raise prices of .COM domains by 7% per year under their new contract with ICANN. The deal was announced earlier this year. Starting in 2021, “to support ICANN’s initiatives to preserve and enhance the security, stability and resiliency of the DNS.”
According to ICANN, these pricing changes mean that the maximum price of a new .COM domain registration, renewal or transfer could go as high as $10.26 by October 2026. Verisign getting the right to increase its fees (which is likely to be worth close to a billion dollars to the company’s top line over the life of the contract) was not unexpected. For those who don’t know, pricing has currently been stuck at $7.85 for years, due to a price freeze which was imposed by the Obama-era US National Telecommunications and Information Administration. However, this policy was reversed by the Trump administration back in late 2018. The amendment to the .com registry agreement that was announced earlier this year essentially takes on the terms of the Trump appeasement, so Verisign gets to up .com prices by 7% in the last four years of the six-year duration of their contract.
ICANN org is not a price regulator and will defer to the expertise of relevant competition authorities. As such, ICANN has long-deferred to the [US Department of Commerce] and the United States Department of Justice (DOJ) for the regulation of pricing for .COM registry services.
But, let’s not forget that ICANN will financially benefit from the deal over and above what it receives from Verisign under the current .com contract. First, the two parties have agreed that they will sign a binding letter of intent committing Verisign to give ICANN $4 million a year, starting one year from now, to help fund ICANN’s activities:
conducting, facilitating or supporting activities that preserve and enhance the security, stability and resiliency of the DNS, which may include, without limitation, active measures to promote and/or facilitate DNSSEC deployment, Security Threat mitigation, name collision mitigation, root server system governance and research into the operation of the DNS
The second financial benefit to ICANN comes from additional payments Verisign will have to make when it sells ConsoliDate. ConsoliDate is a service which allows .COM registrants (via their registrars), to synchronize the renewal dates of all of the domains in their portfolio, so they only have to worry about renewals on a single day of the year. It’s could also be called a partial-year renewal. Under the amended .COM contract, ICANN will get a piece of all that action as well. Verisign has agreed to pay ICANN a pro-rated fee, based on the $0.25 per-domain annual renewal fee, for the number of days any given registration is extended using ConsoliDate.
Overall, domain investors should not be surprised if they begin seeing new price increases in 2021, with following increases each year thereafter. But I must say, the new ConsoliDate service does sound like something many people in this industry could use. It would make managing renewals for hundreds (or even thousands) of domain names very simple.