E-Commerce News: Portals & Search : "VeriSign's objective was to gain clarity and business certainty for Internet operators."


In this new agreement I see…

…certainty for Verisign and their shareholders. Five additional years as the operator of .com and the capability to increase pricing in an already fat agreement.

…I also see certainty for ICANN.  Certainty that these pesky lawsuits that Verisign has peppered them with for the past five years go away.

…and certainty for ICANN’s stakeholders. Hrmmm. Actually there’s not much of that. Well there is a little bit – certainty that Verisign will retain their iron grip on the .com and .net monopolies.

And there definitely isn’t any certainty for Internet operators – at least not other than Verisign. Verisign is the only registry that has these cherry terms in their contracts. At least for now – I suspect its only a matter of time before the rest of them are extended the same “certainty”. Which leads to other certainty – that prices will start to go up across the board for all domain names. And its also a certainty that Registrars will have to eat these increased costs. You see, before ICANN knuckled under to Verisign, they managed to create competition at the registrar level. This competition ensures that Registrars end up bearing the brunt of any fee increases that come down the pipe.

The other certainty is that this outcome won’t cost  ICANN or Verisign a nickle. John Berryhill sums it up best on the Registrar Constituency mailing list – “I wish I could settle my disputes by taking it out of other people's pockets...” [link]

Folks, I think we’ve been sold out.

Screw-tanFor those of you that haven’t had a chance to digest the proposed agreement, here are the greatest hits:

  • Verisign to provide public and private support of ICANN
  • Verisign will cede control of key root zone management functions to ICANN.
  • The .com management contract will be extended through 2012 (currently set to expire in 2007) 
  • Verisign can increase .com prices 7% per year starting in Jan. 2007 
  • The definition of registry services is the same as it is in the .net management agreement.
  • Both parties are required to submit to binding arbitration in the case of a dispute (no more litigation)
  • Verisign to pay ICANN a new $0.37/transaction fee. 
    • this fee can be passed to registrars. 
    • this fee becomes effective immediately. (pending signature) 
    • this fee will be increased $0.37 to $0.45 to $0.50 over two years. 
  • This new registry fee and existing registrar fees are payable.
    • it will total either
      • $0.37 (registry) + $0.15 (registrar) if registrars don't approve budget, collected by registry, payable to ICANN. 
      • or, $0.37 (registry) + $0.25 (registrar) if registrars do approve budget, collected by registry, payable to ICANN. 

The net result? ICANN staff appear to have made a massive policy shift away from competition towards entrenching monopolies. Presumably they believe that providing certainty to private sector operators is preferable to creating uncertainty in the form of enhanced competition. Under this new policy, we will not see the same level of competition in registry services that we currently enjoy under registrar competition. More importantly, in collusion with Verisign, ICANN will be taxing registrars more than $0.65 per transaction in less than two years time (they are starting us off easy with a simple $0.52 tax – already almost 100% more than what they are currently collecting.

The real kicker is that we’re not getting anything in the way of new services from ICANN in exchange for these massive levies. There’s a name for this type of contribution: tithing. At least where the church is involved, the contributions are voluntary and the contributors know full well that any benefits arising from their generosity are purely a matter of faith.

According to Paul Twomey, ICANN’s CEO, this all makes it possible to achieve “…a constructive and productive relationship that will benefit the global Internet community.

Did “benefit” suddenly become a synonym for “screw”?

 (Note: This article was originally posted on 10/25/2005, but because I’m a goof, I managed to delete it. I’ve recreated the article from my browser cache and believe this to be the same copy that was published originally.)

Now playing: "The Tide Is Turning" from the album "The Wall - Live In Berlin" by Waters, Roger.