VeriSign is planning to raise the wholesale cost of registering a .com or .net domain name in October to generate more money for infrastructure improvements, the company announced on Thursday.
The increases are the first of several VeriSign is allowed impose through 2012 under an agreement with ICANN (Internet Corporation for Assigned Names and Numbers), the overseer of the Internet's addressing system. VeriSign is the official registry for domain names ending in .com, .net, .cc, and .tv.
On Oct. 15, the wholesale price of a .com domain will go from $6 to $6.42, a 7 percent hike and the maximum annual percentage increase allowed under the March 2006 agreement with ICANN. A .net domain name will increase 10 percent, from 3.50 to $3.85.
VeriSign can't raise the price of the .com domain registrations more than 7 percent annually in four years of the six-year agreement with ICANN, which runs through 2012. However, VeriSign is allowed to raise prices for security reasons or in respect to new ICANN policies if there hasn't been a formal price increase that year.
The impact of the price hike on domain name owners could vary. VeriSign charges those fees to registrars, which may package domain name registration service with other services, such as Web site hosting.
Those registrars may set their own pricing for their services to consumers or businesses, as long as they pay VeriSign the basic domain registration fee. VeriSign said it manages relationships with more than 150 ICANN-accredited registrars that submit 100 million domain name transactions daily.
At the end of 2006, .com and .net domains numbered 65 million with new ones added at an average of 2.1 million per month, according to VeriSign statistics released last month. With the new price increases, VeriSign will boost its revenue by at least $22.7 million.
VeriSign said the new revenue will be invested in equipment that deals with requests for Internet sites on the .com and .net domains. VeriSign runs a network of servers that are part of the DNS, which enables domain names, such as www.idg.com, to be translated into numerical Web site addresses that can be called into a Web browser.
Web surfers are putting more pressure on the DNS system by making more requests for Web sites, VeriSign said. The company is handling around 30 billion queries a day on its infrastructure, up from 1 billion in 2000.
In February, VeriSign said it plans to invest $100 million over the next three years in its DNS infrastructure. The project, called Titan, will boost VeriSign's bandwidth from 20Gbps to more than 200Gbps, allowing it to respond to more than 4 trillion DNS queries a day.
Company officials could not be reached for comment.