Registrars criticize proposed hike in domain name fees

Internet domain name registrars have slammed Internet regulators for a proposal that would allow VeriSign to increase the cost of registering .com domain names by as much as 7 percent a year.

VeriSign reached a tentative agreement with the Internet Corporation for Assigned Names and Numbers (ICANN) on Jan. 29, allowing it to increase the cost of registering a domain -- currently capped at $6 -- by 7 percent in four of the next six years. It had earlier demanded the right to increase the price by that amount every year.

Eight domain name registrars wrote to ICANN board members on Tuesday to protest the agreement, reached after months of discussion between VeriSign and ICANN.

"The agreement still harms the Internet community by allowing unjustified price increases in most future years at a time when fees for .com should be decreasing, not rising," the letter said, according to Network Solutions, one of the eight signatories.

ICANN sets the rules under which VeriSign operates the central registry for .com domain names, including the price it may charge registrars for entering domain names into the database. Those registrars pass on that cost to their clients, the companies and individuals who register domain names with them.

Registrars are also upset that ICANN is offering to automatically renew VeriSign's contract to operate the .com registry in 2012, without opening it up to competitive bidding.

A perpetual contract is anti-competitive and "serves no one but VeriSign," according to another of the letter's signatories, Register.com.

Given that technology is driving down registry costs, any attempt to increase prices should result in the contract being put up for competitive bidding, suggested another registrar, GoDaddy.com.

"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," the company suggested.

The latest agreement between VeriSign and ICANN requires the approval of the ICANN board and the U.S. Department of Commerce. ICANN has invited comments on the agreement from interested parties up until Feb. 20.