Registrars Question VeriSign .com Deal

The leaders of eight domain registration companies have come out against a proposed agreement between VeriSign and ICANN over management of the .com registry. In an open letter to ICANN Chairman Vint Cerf, the companies say if this is VeriSign's best offer, "it must not be ICANN's."

Under the terms of the agreement, VeriSign would be permitted to raise .com registration fees by 7 percent without any justification in four of the next six years, as well as extending the "presumptive renewal" right to the registry when the agreement expires.

Such a clause would effectively shut out any of VeriSign's competitors from bidding to take control of the .com domain upon expiration of the agreement.

The companies in the letter represent some 57 percent of .com names. They said that while they may employ different business models, "we agree that additional safeguards are needed to uphold competition, transparency and accountability in this fledgling market."

Instead of raising domain registration prices, the registrars argue that fees should be dropping. They pointed to VeriSign's move to drop .net registration fees by 40 percent to win an extension of its ICANN agreement for that top-level domain.

The letter also questioned ICANN's agreement with VeriSign to give it the option to renew the agreement in 2012 without a competitive bidding process. The companies argue that since VeriSign manages both .com and .net, it controls 85 percent of the U.S. domain name market.

"The guarantee of a unregulated monopoly runs counter to the reasons behind why ICANN was created, the policies of the anti-trust laws of the United States, and the competition policies of many nations worldwide," the letter reads.

"The proposed agreement is a bad deal for our customers and the Internet community as a whole," said Bob Parsons, CEO and founder of GoDaddy.com. "We will fight to convince the ICANN Board of Directors not to accept it."