GoDaddy.com, the No. 1 registrar of domain names worldwide, today voiced its strong disapproval of a pending agreement between the Internet Corporation for Assigned Names and Numbers (ICANN) and VeriSign.
“The proposed agreement is a bad deal for our customers and the Internet community as a whole,” said Bob Parsons, CEO and Founder of GoDaddy.com. “We will fight to convince the ICANN Board of Directors not to accept it.”
ICANN, the governing body of the Internet, has been working to settle a lawsuit with VeriSign, which manages .COM and .NET domain name extensions. The proposed settlement agreement would allow VeriSign to raise registration fees by 7% annually in four of the next six years. It also would give VeriSign control of the .COM registry indefinitely, as it extends VeriSign’s “presumptive renewal” right when this proposed settlement agreement ends in 2012.
Industry research verifies that costs involved in the technology critical to the domain name registration infrastructure are continually decreasing. Server costs have declined 10-18% over the last three years due to improved server efficiency and software stability. Bandwidth costs have fallen roughly 35% per year since 2001 because of new delivery methods and competition among providers. Storage costs have dropped approximately 45% per year since 1999, as more data can now be stored in the same physical space. Going forward, these downward trends do not appear to be slowing.
“Under no circumstances should VeriSign be allowed to raise .COM prices without cost-based justification,” Parsons said. “If VeriSign does request an increase, it needs to result in competitive bidding for the registry contract. This would certainly create lower prices, not higher, just as it did for the .NET registry.”
At the end of 2004, ICANN opened the .NET registry for bidding. VeriSign won the contract from among five competitive bids. The result of this process reduced the price of domain name registration nearly in half from their pre-bidding levels. There are approximately 7 million .NET registrations, compared to nearly 44 million .COM registrations.
“.COM domain names still account for more than 80% of net new registrations. If there is any automatic change in pricing in the agreement, it should be for an annual decrease resulting from economies of scale and efficiencies that naturally occur in our industry,” Parsons said.
Parsons is also troubled by the closed nature of the process involved in this settlement. ICANN claims that VeriSign has met its obligation to invest $200 million in development and infrastructure under the current agreement. However, ICANN has kept VeriSign’s reports confidential, which raises questions about the integrity of the arrangement.
“ICANN must be open and transparent in its actions. We need to see these reports made public and verified by a third party. Internet registrars, service providers and users demand that ICANN be held accountable,” Parsons said.