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Just How Much Money Does the .com Increase Mean For VeriSign?

We reported last week that VeriSign had announced increases to the registry fees for the .com and .net domains.

Beginning in October, VeriSign will raise the fees 42 cents for the.com and 35 cents for the .net domain.

The increase is the maximum amount allowed by VeriSign's new contract with ICANN (7 percent). I suppose it wasn't technically a sure thing, but I certainly would have picked "maximum amount allowed by contract" in the office pool.

Tom Galvin, the VeriSign representative two whom I had the chance to speak, explained the details of the deal, specifically the price increases.

"In the entire course of the VeriSign agreement, over six years, the most the registry fee can go up is $1.86. So it doesn't give us carte blanche on how much we can raise it. It creates specific limits, saying it can only be raised in four of six years, and the cumulative amount of that total means that in six years, it can go from $6 to $7.86 at its height."

At the time of the announcement VeriSign pointed out that, according to its own research, according to its own research, the average per-year retail price for .com domains among the top 10 registrars is $20.24, and $20.25 for .net domains. The point being, of course, that the increase in price is unlikely to affect domain customers directly.

I was curious, though, just how much the change would affect the bottom line at VeriSign, being as even 42 cents can build up pretty quickly over the course of a few hundred thousand domain registrations.

According to DomainTools.com, there were 787,319 new domains registered in the last 24 hours. And, while there's no way of knowing exactly how many domains might be registered in a given day come October, I think it's fairly safe to assume the rate of domain registrations is in no immediate danger of decreasing.

So let's imagine that 787,319 .com domains are registered on October 15th. That amounts to $330,673.98. And while I'm not perfectly acquainted with the specific financials of VeriSign, $1.5 million a week seems like a fairly significant infusion of new revenue by any standard. And that's just for .com. The .net domain would be worth another $26,497.10 a day.

There could be more to the equation, but the basic fact of the matter would seem to be that the price increase will mean a major bump in revenues at VeriSign come October.

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Battling Philanthropists

With all these sinister forces out to undermine the security and stability of the Internet - or its democratic nature, or any of the other things that are apparently in constant jeopardy - it's comforting to know that just about every company doing business on the Internet is apparently determined to represent the best interests of the little guy.

It sometimes seems that every dispute in cyberspace becomes a fight for freedom, with both sides accusing the other of standing in the way of what's right. Sometimes that's warranted - say, in discussions of the Patriot Act, or Digital Millenium Copyright Act.

And sometimes it seems like that freedom stuff might just be the tiniest bit of a put-on.

A few weeks back, Go Daddy announced that its representatives were in Washington, campaigning for the accountability of the Internet Corporation for Assigned Names and Numbers. Most of Go Daddy's ICANN concerns relate to the group's deal with VeriSign for the management of the .com registry.

In its press release announcing the campaigning, Go Daddy included a quote from CEO Bob Parsons who said, among other things:

"Our legal team and Washington, DC representation are continuing to fight for the future of the Internet. We believe this is in the best interest of Go Daddy's customers and all Internet users."

Last week, Champ Mitchell, CEO of Network Solutions, another vocal opponent of the ICANN-VeriSign deal, submitted a letter (PDF) to the National Security Telecommunications Advisory Committee, outlining what he sees as a threat to national security inherent to the deal as it stands now. The letter includes several frightening prophecies:

"The monopoly terms, unjustified price increases and lack of meaningful security requirements in the proposed .com agreement have real-world implications for the future security and stability of the Domain Name System."

VeriSign sent theWHIR its official comment on the views of both Parsons and Mitchell. I must admit I wasn't totally astonished when I discovered that opposition to the deal could be considered a threat to the security and stability of the Internet.

"This agreement was approved by ICANN because it strengthens the security and stability of the Internet. It has been well vetted, having gone through 2 public comment periods, 3 public ICANN meetings and 3 congressional hearings. Any delay at this point plays into the hands of a couple of registrars who place their own narrow financial interests above the security and stability of the Internet."

Ironically, while waving the "security and stability of the Internet" banner, the comment makes the very valid point that the other companies' concerns might be just the tiniest bit overblown.

This is not to suggest that any of these companies, or their representatives, is a liar, or a hysterical scaremonger. Far from it. They all have an obvious vested interest in the security and integrity of the Internet.

However, all the posturing does tend to gloss over the fact that these folks are all shrewd businesspeople. And I feel it's safe to say that Go Daddy's biggest concern about a .com price increase would have to do with its own bottom line. The same goes for Network Solutions. And for VeriSign.

And yes, I realize that "I'd prefer to make more money," is hardly a rallying cry that will swing public opinion in a company's favor. But I'm ever so slightly concerned that all this ostentatious posturing might make the real threats to the Internet's security and integrity that much more difficult to spot.

 
 

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