[Comments-com-amendment-3-03jan20] Opposing the Proposed Amendment 3 to the .COM Registry Agreement

[Cabramada]

Dear ICANN,

As a small business I strongly oppose the recent contract changes between ICANN and Verisign which may result in an increase of more than 70% of wholesale domain prices in the next 10 years negatively impacting many businesses by adding cost to what is already a costly endeavor to maintain website and domains. My objection is based on the following:

1. Price Increases
Verisign will be allowed to increase the wholesale price to registrars for .COM domains by 7% each year in 2020, 2021, 2022, and 2023. After a two year “freeze”, Verisign can increase prices by 7% annually during 2026-2029, then another two year “freeze”. This cycle will continue, meaning that within 10 years, .COM domains could cost approximately 70% more than the current wholesale price of $7.85 — and the sky is the limit. It is not clear how much of these price increases registrars will pass along to consumers, but it is likely that most of these increases will be paid by domain name registrants. The contract does allow for other price increases for certain extraordinary situations, so it is possible prices could increase more than anticipated. 

2. ICANN Will Receive an Extra $20 Million 
With the contract changes, Verisign agreed to pay ICANN an additional $20 million dollars over five years to support ICANN’s initiatives regarding the security and stability of the domain name system. There is no explanation why Verisign did this, how ICANN will spend the money, or who will ensure that the funds are properly spent. 

3. Verisign Can Operate as a Domain Registrar
ICANN also had rules that the operator of a TLD could not operate a domain name registrar. Although in 2012 ICANN allowed operators of new gTLDs to have domain name registrars, it did not apply to Verisign. The new contract will allow Verisign to operate its own registrar, except for selling .COM domain names itself. To circumvent this, it is also possible that Verisign could act as a reseller of .COM domains, through another registrar. This result is that the company that controls almost 80% of the registrar pricing for domain names will compete directly with all domain registrars, maximizing its control of domain name pricing to the detriment of other competing registrars. While this might result in lower prices to consumers, fewer registrars will harm competition, choice, and domain name services. Verisign’s registrar could also use its dominant position to charge higher prices to consumers, while at the same time raising registrar prices. 

4. ICANN Ignored Previous Comments
As detailed on Standing Up to ICANN to Keep Domain Prices in Check and pricecaps.org, over 3,500 comments were submitted in support of price controls for the .ORG, .INFO, and .BIZ TLDs. Only six comments supported removing price controls. ICANN discounted the comments that were in favor of maintaining price caps. A number of the comments were submitted using an online tool, which caused the comments to be discounted as “spam” by the ICANN Ombudsman. ICANN removed the price caps, primarily relying upon a biased preliminary analysis from 2009 by an economics professor that did not reference any data.

Danny Myint
www.cabramada.com
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