Verisign will increase the .com price from $7.85 to $8.39
onlinedomain.com
onlinedomain.com
This decision hurts the consumer/registrant in the end, making future registrations and renewal costs less accessible to a lot of markets.
For clarity, this $8.39 amount will become the wholesale cost to the registrar — we of course need to markup on top of that to cover our processing costs, overhead to offer great support, mitigate abuse, etc. Registrars do the heavy lifting in delivering the core user experience — we see none of this margin and the consumer does not see any incremental value from this hike by the registry.
Namecheap stands against removing price caps and allowing these incremental price hikes that only hurt the consumer.
-Ted from Namecheap
Is there a reason for doing this besides ‘we can’? Not sure if there’s something we aren’t seeing or aren’t privy to.
"The amendment repeals Obama-era price controls and provides Verisign the pricing flexibility to change its .com Registry Agreement with ICANN to increase wholesale .com prices. Specifically, the flexibility permits Verisign to pursue with ICANN an up to 7 percent increase in the prices for .com domain names, in each of the last four years of the six-year term of the .com Registry Agreement. The changes also affirm that Verisign may not vertically integrate or operate as a registrar in the .com top level domain."
I wanted to also mention that I appreciate what you and everyone at Namecheap do and the transparency when fighting things.
I put this on my signup form and have had zero spam since, and it has very little impact on user experience. The fact that it doesn't feed the google surveillance machine is a bonus.
what are they doing on namecheap? buying domain names?
(if they're hitting your domain checker you can configure cloudflare to only captcha protect that page...)
Why "of course"? Cloudflare is able to provide domains transfers and renewals at wholesale rates.
The markup from legacy registrars is probably excessive, but with Google, Cloudflare, etc getting into the game, they can likely offer wholesale pricing to support the rest of their (very) profitable product lines.
$12.98 for a .com domain renewal is a 65% upcharge over the $7.85 wholesale rate. That is considerably more expensive than many of Namecheap's competitors.
If I’m really worried about domain hijacking, locking, etc I’d use something like MarkMonitor.
Cloudflare does not require me to turn off my third-party VPN before logging in, and sells domains at cost (at lower rates than Namecheap). For example, Cloudflare charges $8.03/year for a .com domain ($7.85 Verisign rate + $0.18 ICANN fee), which will go up to $8.39 + whatever the new ICANN fee is after the Verisign/ICANN price hike. Namecheap currently charges $8.88 for the registration year and $12.98 every year after that, with the rates also going up after the price hike. Porkbun also charges less for renewals than Namecheap, and covers TLDs that Cloudflare doesn't.
Cloudflare pricing for .com: https://www.cloudflare.com/products/registrar/
Namecheap pricing for .com: https://www.namecheap.com/domains/
This is an insane level. Apple is at 23%. Facebook at 35%. Profit margins that high only come from rent seeking backed by the full force of the law.
As a small structure you can achieve that but at a very large scale, this is effectively the sign that natural competition is not working as expected.
With all due cynicism, has their been public research on the sort of clever accounting tricks a company with Elsevier's business model must surely be using to keep their profit margin as low as 35% ..?
Me too. Their investor relations report [0] is the best source I know of, but it's pretty vague. I only see breakdowns of revenue, no details regarding operating costs.
PLOS One is transparent regarding their costs though [1]:
- 46% publishing, editorial
- 18% publishing, production
- 15% publishing, technology
- 16% general & admin
- 5% publication fee rebates
[0] https://www.relx.com/~/media/Files/R/RELX-Group/documents/re...
The Registrars like Namecheap and friends are just the messengers authorized to register .com domains into this larger database and they pay Verisign for the privilege to do so.
While it's possible for anyone to go out and stand up their own .COM zone in DNS, any domains created by that registrar don't actually exist in the eyes of the larger Internet and will not work.
https://insight.factset.com/sp-500-reporting-net-profit-marg...
It seems like an arbitrary metric to use. I would think focusing on barriers to entry, economies of scale, and legislative barriers to be more relevant factors in determining whether or not a profit margin is "acceptable".
I don't see that for Verisign, they're just rent seeking off domain. Their profit should probably be capped AT&T style back in their monopoly days with heavy regulation.
A section,
> There are about 152 million domain name registrations .com today so Verisign will make about $82 million more in the next year following the price increase out of thin air.
> Verisign will be able to increase the price of .com in the next 3 years as well.
> Verisign will suck about $3 billion dollars out of the world economy just by having some powerful friends at ICANN.
> Verisign will suck about $3 billion dollars out of the world economy just by having some powerful friends at ICANN.
It's not a zero-sum game.
If Verisign manages to extract $3B from the poverty-stricken folks who are buying up .com domains, it doesn't just disappear (unless, of course, Verizon takes it in cash and sets it on fire in the basement.)
That $3B will then be spent on whatever pet projects Verizon feels like spending it on, thus re-injecting into the global economy.
I personally think that Verisign should have to compete to run the .com registry, just like how we do FCC spectrum auctions, but hand-wavy statements like "suck about $3 billion dollars out of the world economy" do not help make that case.
https://www.nasdaq.com/market-activity/stocks/vrsn/financial...
They have a monopoly and they’re allowed to do it.
Edit: Don't get me wrong. If the reported profit margins at Verisign are correct they are clearly continuing to exploit their privileged market position unreasonably
If you want to address squatting, then address squatting. If you want to address people squatting on new domains (as if there are many squat-able .com's left), then change the registration for new domain registrations only (and not renewals).
A change like this will primarily affect small domain holders in a way that is financially not worth fighting back against individually. I don't really see a "devils advocate" position here.
That said. I think the small renewals are the part that makes holding onto these domains for years possible...
Random example. 20 years ago I had a one person local IT consulting side-gig. The domain was a not very useful, active less than a year and grabbed by a speculator as expected when I let it expire. It's been parked many places for years by various folks, current parking pages quote says they might be able get it for me for $120 [1] -- I could care less but if someone with less tech experience wanted it for their new small business they would likely bite.
Is there a economic mechanism you recommend to prevent this sort of thing?
[1]https://www.godaddy.com/domainsearch/find?isc=GPPTCOM&utm_so...
It's also my understanding that the trademark rule only applies if the trademark was made before the scalper purchased the domain name. If you're a startup or just someone who wants the domain then you're out of luck. Your only options are to pay the asking price or hopefully wait until their claim on it lapses and they don't renew.
Obviously the internet has grown way beyond the powers of a relatively tiny non-profit that is ICANN so why not upgrade it into something more proper that is governed worldwide.
Something like a summary of the discussion/chaos on the matter: https://en.wikipedia.org/wiki/Internet_governance
It would be almost trivial for a country, or group of countries to set up their own root servers and mandate that operating system vendors include them if they want to continue selling in their country. Then if there was something hosted on their servers everyone wanted to get to, it would spread outside of those countries by demand.
...But it isn't even necessary now with all the extra TLDs. If a government or organization wants to start a non profit TLD that just charges the bare minimum, they can do it without fragmenting themselves.
edit: In about 2004 a group of friends and I ran our own servers with SOAs for our own TLDs that we replicated to each other. It had a total of 3 useless websites, and 5 users, and only lasted a few months, but it was neat.
> The whole point here is that Verisign gets richer while ICANN does all the dirty work. All this while ICANN will receive additional funding ($20 million) from Verisign over the next 5 years. So ICANN will be spending a part our stolen money, money ICANN helped Verisign steal from us registrants, to get higher salaries and bonuses. Thanks ICANN!!!
A.ROOT-SERVERS.NET J.ROOT-SERVERS.NET
That means Verisign controls 15% of the global roots while everyone else holds a meager 7%. IANA got the optics on this one all sorts of messed up.
There are 63 Js, 14 As, but 165 Ls.
This is a bit of a tangent, but the idea of doing this has always made me nervous. Sure, the root zone is only a couple MB and you can easily set up a cron job to sync it regularly. But if that cron job breaks, it would be very easy not to notice, since it's not like the authoritative servers + glue records for the major TLDs change every day. (Or every decade.)
Imagine if that cron job has been broken for 9 months, the IT guy who set it up left 4 months ago, and suddenly a tiny TLD like ".tech" switches to a different authoritative DNS provider. Since it's not a very common TLD you'll never notice... unless some app uses "companyname.tech" for its mobile API - or one of a million other scenarios.
It's probably fine if big DNS server operators like Google/Cloudflare or major ISPs mirror the root zone, since they have the resources to make it robust. But small(-ish) IT operations running their own DNS - just use the root servers.
It's my understanding that ICANN ensures that the namespace/numerical space infra is secure and stable.
I think that all other registrars have to go through Verisign in order to register sub domains off of com., but there may be other ways. I haven't really kept up with it in the last 20 years.
* Manage the database of all domain registrations in a TLD, and manage the infrastructure that registrars (the companies that customers actually interface with) use to create and update those records.
* Manage whois, although IIRC .com and .net use a "thin whois" model where the TLD whois server redirects to a whois server run by that domain's registrar.
* Run the authoritative DNS servers. This is the most critical component, since if the authoritative servers for .com and .net went down, it would basically be an "Internet outage" - an enormous amount of things would break if recursive DNS servers couldn't resolve .com or .net domains.
It's an important function, but as others have pointed out, it doesn't justify the price increase, Verisign's profit margins are huge. And the fact is that Verisign doesn't actually own .com or .net, they're basically a contractor for ICANN.
To put it differently, what would be the profit margin for a .com registry maintainer that operated at reasonable efficiency (which might or might not reflect Verisign's own efficiency)?
A related question: what would be the base, fixed costs for running a reasonably efficient .com registry and what would be the additional per-domain costs?
So less than $1 I'd bet
The size of the database for .com is about 150 million records. At 4KB per record (generous), that's 600MB. It fits n RAM on a laptop you wouldn't consider suitable for using at the office.
Number of transactions other than reports is roughly 1 per year per record plus 10% growth, so about 5 per second.
OK, it fits in RAM on a single modern commodity server, and is updated at a rate which can easily be handled by such a server.
This probably illustrates the community consensus on it going back a couple of years: https://www.google.com/search?q=icann+.com+price+cap
Edit:
Whoops! ICANN haven't altered their price controls for .com recently. Might be getting mixed up with the .org kerfuffle.
In the current .com contract, prices were fixed at $7.85 until 30th November 2018, and are allowed to raise the cost by 7% per year after that, under certain conditions:
"7.3(d)(ii) Registry Operator shall be entitled to increase the Maximum Price during the term of the Agreement due to the imposition of any new Consensus Policy or documented extraordinary expense resulting from an attack or threat of attack on the Security or Stability of the DNS, not to exceed the smaller of the preceding year's Maximum Price or the highest price charged during the preceding year, multiplied by 1.07."
https://www.icann.org/en/registry-agreements/com/com-registr...
In other words, I think the .com registry should be a non-profit, public service, rather than a money-printing machine that some lucky company gets to exploit.
They should probably just raise the price every year on a steady schedule to avoid the news.
EDIT: would you work somewhere that could never give you a raise because they are not legally allowed to raise prices?
Is there a solution or a place where ICANN and/or Verisign limit the massive amount of parked domains?
Stuff like this is the natural conclusion of such a system.
I'm not full-on anti-capitalist, but market failures like this are an obvious issue.
By jacking up the wholesale rate by 7% (the largest annual increase they're allowed, per their ICANN agreement[1]), every single .com registration and renewal becomes 7% more expensive. Requiring services like Route53 to either pass it through to consumers or eat the cost increase themselves, if they even have the margins to.
[1] https://onlinedomain.com/2020/01/03/domain-name-news/icann-a...