Name: Alex Lerman
Date: 24 May 2023
Original Public Comment: Proposed Renewal of the Registry Agreement for .NET
Verisign is raking in an astronomical $131 million in "Service Fees" yearly from domain name registrations. Alarmingly, this figure is closing in on ICANN's full 2023 operational budget of $148 million. The audacious Proposed Renewal Agreement gives Verisign the green light to hike its "Service Fees" to nearly $11 per domain, then pile on an extra 10% each year for the ensuing six years. This would catapult Verisign's annual earnings to an eye-watering $232 million, potentially amassing a staggering billion dollars total. ICANN, however, still can’t justify these exorbitant fees or the necessity for their relentless annual increases. The contract between ICANN and Verisign explicitly permits the negotiation of terms upon renewal. But ICANN has apparently neglected to engage in these critical negotiations. If Verisign were to reject negotiation, ICANN should seek a court ruling for its negotiation rights. A common-sense interpretation of the agreement surely permits the possibility of fee negotiation, and ICANN must assert this right. If this ends up in court, the ruling could potentially uphold ICANN's right to negotiate better fees for registrants.
I’d like ICANN to assert its right to negotiate Service Fees, develop a legal strategy to lower fees with Verisign, and disclose if and why it abandoned fee negotiations. ICANN has the responsibility to manage the .net registry in the public interest and negotiate fees with service providers. Competitive bidding should be used to determine appropriate fees, as was proven successful in other cases. ICANN's claim of not being a price regulator is a misdirection, and it must fulfill its obligations to protect consumers and obtain lower prices through competitive processes.
I request that ICANN identify appropriate Service Fee levels through a bidding process involving qualified competitors of Verisign. Armed with this crucial data, ICANN should actively negotiate the terms of the renewed Agreement with Verisign. If Verisign refuses to renew the Agreement within the appropriate Service Fee range determined through the bidding process, ICANN has the authority to award the contract to the successful conditional bidder.
ICANN should develop a disclosure framework for court and government-ordered domain name transfers, cancellations, and takedowns. This framework should provide detailed information about the nature and source of each demand and whether the register or registry complied with it.
Because of ICANN's concerning track record of disregarding stakeholder concerns, I request that ICANN justify pricing for all legacy TLDs and new gTLDs, including but not limited to .org, .net, and .com, to examine crucial aspects such as market power, price caps, and renewal bidding.
ICANN needs to clarify the intent behind the revisions made to Section 3.1(d) and, if necessary, revert to the original language if the intention was solely to prohibit new registrations of reserved strings rather than the renewal of already registered strings that would otherwise be prohibited due to their inclusion in Appendix 6.
Summary of Submission
Verisign is currently making an excessive $131 million per year in "Service Fees" from domain name registrations. The Proposed Renewal Agreement allows Verisign to increase these fees to nearly $11 per domain and continue to raise them by 10% annually for six years, potentially reaching a staggering $232 million per year and over a billion dollars in total. ICANN has failed to justify these exorbitant fees and the need for annual increases.
The contract between ICANN and Verisign explicitly permits negotiation of terms upon renewal, yet ICANN has neglected these crucial negotiations. If Verisign refuses to negotiate, ICANN should seek a court ruling to assert its right to negotiate better fees for registrants.
ICANN must assert its right to negotiate Service Fees, develop a legal strategy to lower fees with Verisign. ICANN has a responsibility to negotiate fees in the public interest. Competitive bidding has proven successful in other cases, and ICANN should use this approach to determine appropriate fees.
ICANN should also establish a disclosure framework for domain name transfers, cancellations, and takedowns ordered by courts and governments. This framework should provide transparent information about the nature and source of each demand and whether the register or registry complied.
Considering ICANN's history of disregarding stakeholder concerns, ICANN needs to find ways to lower pricing for all legacy TLDs including .org, .net, and .com. ICANN should address important factors such as market power, price caps, and renewal bidding.
Finally, ICANN needs to clarify the intent behind revisions to Section 3.1(d) of the agreement and revert to the original language if necessary, to ensure that the prohibition only applies to *NEW* registrations of reserved strings, and guarantees that rights of current registrants are preserved by guaranteeing the ability of existing registrants to renew, and transfer to 3rd parties, existing registrations.