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

[Bess Katerinsky]

To Whom it May Concern;

On January 3, 2020, ICANN announced significant changes to the contract it
has with Verisign, Inc. to operate the top-level domain .COM.

ICANN and Verisign made these changes in secret, without consulting or
incorporating feedback from the ICANN community or Internet users.

The changes to the .COM agreement will have a much bigger impact on the
Internet than the previous action for .ORG, .INFO, and .BIZ domains, due to
the dominance of .COM. There are 359.8 million total domain names, of which
144 million are .COM — that’s 40% of all domain names. With 161.8 million
country-specific TLDs (ccTLDs), there are 198 million generic TLDs (gTLDs).
That means that .COM makes up 73% of all gTLD domain names.

ICANN was created in part to introduce competition between domain name
registrars, but now ICANN itself is at the heart of the problem, without
considering any input from Internet users on these critical decisions.

There are four main concerns with ICANN’s decision:

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.

As a member of the public, Internet user, and domain owner, I categorically
and emphatically do not want these contract changes to occur. Please take
my comments and concerns into account, as they are being submitted during
the public comment period.

Thank you.

Sincerely,

Bess Katerinsky
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