VeriSign deal could lead to .com price hikes

Icann's controversial settlement leaves .com responsibility with registry Verisign

Domain name oversight body Icann has voted to approve a controversial settlement with .com registry VeriSign, which will see the company continue its control of the domain until 2012 and gain virtual autonomy over fixing registration fees.

Icann's board voted 9 to 5 in favor of settling the long-standing dispute which arose a couple of years ago when the two clashed over VeriSign's Site Finder service, which redirected traffic from unregistered and mistyped domain names to a VeriSign owned website. Icann said the service was helping the company to monopolise innovations, while the registry argued that Icann’s laboured leadership was causing the internet to stagnate.

Both sides are set to profit from the deal. Icann will receive an annual sum of $6m to $12m from VeriSign, which in return gains the right to raise prices for .com domain registrations by seven per cent annually in four out of the next six years. The registry will also have first refusal over whether to renew its control over .com after 2012.

The agreement has met with an angry response from some quarters. An organisation called the Coalition for Icann Transparency (CFIT) which was set up late last year has sued both parties for violating antitrust and competition laws in the US.

But in a statement on its website VeriSign labeled the deal "straightforward " and similar in nature to its agreement with Icann over .net, which was approved last year.

Andy Kellett of analyst firm Butler Group said that although the .com deal has removed one problem for Icann – an impending lawsuit from VeriSign – registrars and other groups will continue to object to the organisation's handling of the tendering process.

"Where there are economies of scale and the administration costs and workload [for running .com] haven't been increased, overall the price should be coming down [rather than increasing]," he argued. "The worrying thing is that there is no clear [justification for] increasing registration prices – it seems like the two have sat down together and hammered out a nice comfortable deal."

However the agreement has still to be approved by the US Department of Commerce and there have been reports that some members of Congress are calling for it to be thrown out.