[Infowarrior] - VeriSign jacks up domain name prices

[Richard Forno]

VeriSign jacks up domain name prices

By Eric Bangeman | Published: April 06, 2007 - 02:18PM CT

http://arstechnica.com/news.ars/post/20070406-verisign-jacks-up-domain-name-
prices.html

VeriSign has decided to raise wholesale prices on .com and .net domains
beginning in October. Saying that the price increases will be used for
infrastructure improvements, the company announced that the wholesale price
for a .com domain will rise to $6.42 from $6.00, while .net will jump to
$3.85 from $3.50. 

In December of last year, ICANN and VeriSign inked an agreement allowing the
company to keep control of the .com top-level domain through 2012. (VeriSign
first gained control of .com in 1999 after it was awarded a no-bid
contract). The agreement provides some control over price hikes, as it
limits them to a maximum of seven percent in four out of the contract's six
years. VeriSign must provide notice of the rate hikes at least six months
prior to their going into effect.

There may still be additional rate increases, however. VeriSign's contract
with ICANN also allows for increases due to ICANN policy shifts or for
security reasons during the two years when the regular price hikes are not
allowed.

ICANN's agreement with VeriSign was the subject of criticism from some
areas. Network Solutions called it a "perpetual de facto monopoly," saying
that it failed to provide sufficient checks and balances. Network Solutions
also said the agreement was "fundamentally flawed" from a cybersecurity
point of view.

As mentioned above, VeriSign is using the security angle to justify the
increase. Revenues from the rate hike will go towards Project Titan, which
is its initiative to expand the global capacity of its infrastructure
ten-fold by 2010. DNS query capacity will increase to 4 trillion queries per
day. VeriSign claims that it has seen security exploits grow by over 700
percent since 2000 and it projects those to increase by 50 percent in 2007
and 2008, which it believes justifies the infrastructure investment and
price increase.

The degree to which the price hikes will be passed on to domain owners
remains to be seen. Registrars are free to set their own prices once they
have paid VeriSign, but it's hard to envision many of them choosing to
swallow the seven percent increase themselves. So prepare yourself for a
larger bill from your registrar when your domain is about to expire.