Icann approval means VeriSign could raise fees for the next six years

Registration fees for the .com domain could rise by nearly 30 percent over the next six years after domain name oversight body Icann voted to approve a controversial settlement with registry VeriSign. The deal will see VeriSign continue its control of the domain until 2012 with considerable freedom to increase registration fees.

Icann’s board voted nine to five in favour of settling the long-standing dispute, which arose when the two bodies clashed over VeriSign’s Site Finder service, which redirected traffic from unregistered and mistyped domain names to a VeriSign-owned web site.

Icann will receive $6m to $12m each year from VeriSign, which in return gains the right to raise prices for .com domain registrations by seven percent annually in four of the next six years. The registry will also have first refusal for the .com contract after 2012.

The agreement met 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 web site, VeriSign labelled the deal “straightforward” and similar to its agreement with Icann over .net, which was approved last year.

Lesley Cowley, chief executive of .uk registry Nominet, said that if prices are increased significantly, companies may start to think about registering with other domains, or reducing their portfolio of web sites. “I have sympathy with VeriSign’s need to determine prices, but [if prices go up] people will think more carefully about choosing [.com],” Cowley said. “One of the reasons for Icann coming in to being was to promote competition, so it’s ironic that it is [being accused of being anti-competitive].”

Andy Kellett of analyst firm Butler Group predicted that registrars and other concerned groups will continue to object to the handling of the tendering process. “Where there are economies of scale and the administration costs and workload [for running .com] haven’t increased, overall the price should be coming down [rather than going up],” Kellett argued.

However, the agreement has not yet been approved by the US Department of Commerce and there is behind-the-scenes pressure on the department to throw out the deal, according to Nominet’s Cowley.