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30 May 2017

Proposed Renewal of .NET Registry Agreement


12Y, 1N, 1A

Bastiaan Goslings

Maureen Hilyard

30 May 2017

30 May 2017

30 May 2017

05 June 2017

30 May 2017


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The final version to be submitted, if the draft is ratified, will be placed here by upon completion of the vote. 

Garth Bruen voted against the Statement for the following reason: The .NET registry is not being operated with any concern for the consumer. Additionally, the continued control over most of the DNS by a single company, that does not participate in the public meetings, does not promote a real MSM. Therefore, any ALAC statements concerning these registries should be to insist that the exclusive and perpetual operation end.



The final draft version to be voted upon by the ALAC will be placed here before the vote is to begin.

The ALAC does not have any comment to make on the changes to the content of the contract overall as we believe that much of it has been predetermined by agreement. However, the increasing cost of .NET domains is a concern as it would make them unaffordable and thus an accessibility issue for end-users, especially for those in already underserved regions. The proposed 10% annual increase which all goes to the registry is significantly high and should be re-considered. A query was raised as to whether or how .NET funds are returned to serve the Internet community in line with the redistribution of .org funds into the community by the Internet Society, to support Internet development. 



The first draft submitted will be placed here before the call for comments begins.

The ALAC does not have any comment to make on the changes to the content of the contract overall as we believe that much of it has been predetermined by agreement. However, the increasing cost of .NET domains is a concern as it would make them unaffordable and thus an accessibility issue for end-users, especially for those in already underserved regions. The proposed $10 increase is also out of scope of an ICANN Registry agreement. A query was raised as to whether or how .NET funds are returned to serve the Internet community in line with the redistribution of .org funds into the community by the Internet Society, to support Internet development. 


  1. From Alan Greenberg:(8 May)

    Maureen and Bastiaan have review the .NET Registry Agreement revisions and are not recommending and ALAC statement.

    There is one comment already pointing out that there the contract (both the current one and the revised one) allow for a 10$ increase in the price to the registrar per year. Note that for New gTLDs, pricing is out of scope of ICANN registry agreements. Based on the 2011 price of $4.65 and the 2017 price of 8.20, it would appear that they have used the full 10% over the term of the last current agreement. The 10% rate is the same as that in the current .ORG agreement. .COM presumably due to the size of the registrant base is price-capped.

    The comment also says the contract should not be renewed, but rather put out for competitive bidding - something that is not within ICANN's ability to decide (and confirmed by the statement calling upon government anti-trust action). See

    From Maureen Hilyard (8 May)

    But really Alan, would we be expecting the ordinary end-user to be analysing these costs and other sections of the document in a similar way, without any prior expert knowledge about the ICANN contractual bidding process, previous contracts and other details you have outlined? Its outside of our scope. (I was talking more about the scope of those without the expert knowledge)

    From Alan Greenberg (8 May)

    No, I wouldn't. That's why we are here.

    In any case, all I was doing was pointing out that there was once comment posted about pricing and was wondering if people thought that this was something we should comment on as well.

    As the CCT-RT has pointed out, it is difficult to know whether this is an outrageous annual increase outstripping cost-of-living increases or a TLD that is in-demand and due to ICANN price restrictions that are not on other TLDs, is still under-priced and the 10% is only catch-up.

    From Maureen Hilyard (8 May)
    Ah... Ok.  By "we:, you have to mean the lawyers we have on the ALAC and within At-Large who may also have ploughed through 133 pages of the actual agreement, but with a lot more understanding than I had.  But noone got back to us, I'm afraid. Bastiaan may have gotten more out of it, but I made the call.

    I was only looking for anything that might have been of interest to end-users who don't really have any say about how much a gtld is going to cost them. Is commenting on a document that  IC

    From Bastiaan Goslings (8 May)

    Yep, Maureen ‘made the call’ but I had scanned through the document and agreed with her.

    Seeing the message you pointed us to, Alan, I have to confess that was not something that triggered me. Not sure what to think of it. The line of reasoning sounds plausible, however I cannot judge its merits:

    - ‘My company is opposed to the proposed contract’: is that Do they have an agenda here?

    - ‘There should be regular tender processes for operation of the registry for a fixed term, as is standard procedure for procurement contracts’: is that the case, is it applicable here? If so, what is be the reason there is no ’tender process’ for the renewal of the .NET contract?

    - What does he mean with ‘the sweetheart deal that ICANN (pretending to negotiate in the public interest) has bestowed upon Verisign’? I assume it’s the existing agreement - what is so ’sweet’ about it?

    - ‘Where the price used to be $4.95/yr, and has skyrocketed to $8.20/yr, a whopping increase of 65.66% during the 6 year term of the prior contract’ - Ok. How does that compare to other gtld registrar fees per domain name? ‘Under competition (…), the annual registry fees would be much lower, perhaps $2/yr or even less’. Is that so? Is there a list available somewhere? For .com it’s the same as for .NET, at least it was with the price increase in 2012 when it went to $7.85/yr. A 35cts price increase in 5 years time is not quite as dramatic as the author is framing it to be IMO

    - Is it fair to assume the price will increase by 10% per year?

    From Olivier Crepin Leblond (8 May)

    I am sorry but your comment got me to raise my eyebrow: we wouldn't be expecting an end-user to analyse these costs, but we would expect ALAC members to. That's why they're elected as ALAC members. If we start reasoning that topics in ICANN are out of scope for the ALAC because an end user would not be expected to analyse the topic or be directly involved in the topic, then we can pretty much close shop because the majority of topics that are treated at ICANN are complex and need prior knowledge. I fully subscribe to the point made by Kaili that ALAC members are the end user's lawyers in the ICANN process.

    On the .NET agreement, it is strange that, once again, the agreement would be just renewed and not put to a bidding process. And the commenter makes a good point about anti-trust laws. But for some reason, the US government has closed its eyes on this industry such that there is one major Registry player and one major Registrar player. It it for the ALAC to call for action? That's the question you need to ask yourselves. It is perhaps the fundamental question for this TLD renewal. It requires answers to two questions: one that requires skills and knowledge; the other that requires a discussion and a choice.

    1. Skills and knowledge: in the case of .NET, are conditions fulfilled for an automatic renewal of the Registry agreement, if there is such an option?

    2. Discussion and choice: if conditions are not met, or there is no such automatic renewal option, then does the ALAC want to pick this up and make a point, bearing in mind this could start a process with an uncertain end?

    From Javier Rúa-Jovet (8 May)

    Must agree with Olivier.

    From Seun Ojedeji (8  May)

    From my quick read of the agreement it seem to be that a renewal option is already existing (ofcourse subject to compliance of certain requirement) and nothing major is changing in that section (ref: section 4.2). I think it's just appropriate to renew if all is fine, I don't see why things should be opened to competitive bidding.
    Secondly I am not sure where the commenter's pricing forecast comes from but my reading of section 7.3 seem to imply a maximum price cap of 8.95 USD with maximum of 10% annual increase from current cap of 5.4. I guess the question to answer is whether that maximum isn't too much considering it was initially and currently capped at 5.4USD. I personally think it is too high as that allows for over 50% increase and 100% of the increase actually goes to the operator (ICANN remains at .75USD). I do not see why pricing must increase especially since there is/will be volume increase in .net and maintenance cost usually don't increase significantly as a result of more registration. I think justification for such price increase needs to be made to ICANN before implementation.
    Considering that the end users are ultimately the registrants who will largely feel the effect of this pricing, I will suggest that we raise our concern about the increase.

    From Bastiaan Goslings (8 May)
    I wonder where authoritative numbers are to be found with regard to price increases over the years - and how these compare to other gTLD’s
    I took the 2012 $7.85 from
    'In January 2012, Verisign raised the wholesale prices of .com and .net registration by 7%, increasing the price from $7.34 to $7.85. Registrars generally passed the price increase on to their customers.'
    However e.g. mentions a different 2012 price and also that ‘On February 1st, 2017 it goes from $7.46 to $8.20 ($0.74)’
    (That a.o. tells me the current price is not capped at $5.40, it supposedly has been increasing annually by 10%)

    (& re the ‘On February 1st, 2017 it goes from $7.46 to $8.20 ($0.74)’: that is the $8.20 mentioned in 7.3?)

    From Seun Ojedeji (8 May)

    Oops so it means I sure interpreted that section wrongly then. However i wonder what this section was talking about:

    "The price to ICANN-accredited registrars for new and renewal domain name registrations and for transferring a domain name registration from one ICANN-accredited registrar to another, shall not exceed a total fee of US$8.95"

    So it perhaps was referring to current pricing as Bastiaan noted and that pricing can then be increaed by 10% every year till 2023. Wow! that is really really huge fees there! I guess its the more reason why ALAC should comment then

  2. And more.

    From Javier Rua (8 May)

    Must agree with Olivier.

    From Alberto Soto (8 May)

    I think we have several problems on this topic, perhaps in others as well.

    • We are lacking time to read all of the reference documentation, at least to me, and limit my participation.
    • On several occasions a specialist is required to clarify this documentation.
    • In particular with this topic: we are missing data and that increases the reading time by adding the search time. And after searching, we find that specific information is not available.

    I think with the suggestion to dump our opinions in the wiki, we start with facilitating the analysis.

    Perhaps we should require the missing information (when the terms allow) to the corresponding constituent unit. But also suggest as a policy that those missing data today, be recorded by that constituency, somewhere, and when necessary we can access it. For example, the evolution of prices.

    Another issue to be discussed, as it affects end users, and also ICANN: this is how ICANN allows according to its contracts, the increase of the cost of a gtld, and the amount to be received remains fixed.

  3. For the record, when I read the redline agreement, focusing on the changes, I found nothing as well. But looking at the one comment already posted raised something I had not noticed, since it wasn't a change.

    There seems to be a few mis-understandings.

    • The contract can only be taken away from Verisign due to a breach. Perhaps allowing that at some point in history was a mistake, but it is not the subject of discussion here. The original commenter correctly pointed out that this could only be done by some sort of anti-trust action. From my perspective, I think this is rather unlikely, but I am not formally schooled in US anti-trust law or case law.
    • As was noted above, Verisign must announce price changes in this TLD. It is a matter of record that they have taken the full 10% (rounded down to the nearest cent) in each year of the past contract. The current price is US8.20 plus the $0.75 that Verisign remits to ICANN making the total cost to registrars $8.95. (The $0.75 seems to be unique to .not, but I have not confirmed that).
    • As noted by the CCT-RT, for the vast majority of TLDs, we have no record of the wholesale prices charged by their registries, so it is difficult to measure whether the price is high or below the typical market level. I don't think there is much chance that this will change.
    • .ORG has the same clause allowing 10% increases per year. .COM is price-capped at US$7.85.
    • Based on the last monthly report available, the number of domains under management (rounded to the nearest million) is:
      • .COM: 130M
      • .NET: 16M
      • .ORG: 11M

    The question I placed on the table is whether we should make a comment about the clause on allowed price increases.

    1. My view as earlier stated is that we should. I don't think Verisign should be given the leeway to continue the 10% increase especially as the figure is now at about 9USD. If that clause is permitted, it simply means that the price can go as high as 14USD or more (if we consider that registrar won't deliver same price to typical registrant). It​ would perhaps make sense if some part of the funds goes to ICANN who further commits such funds to internet development initiatives. However Verisign making that much money yet charging ICANN for maintaining IANA isn't a good deal IMO.
      1. As I mentioned, there is a $0.75 additional fee per registration that does not seem to be present for other TLDs.

        The current price is under that for .ORG I think. Presumably if they keep raising prices and their price is out of range of other TLDs, they will lose market share.

        .net is not tied to the IANA contract, but the .com one is. The cost for the IANA contract is $300k-400k and the revenue from Verisign is in the tens of millions of dollars per year. So it is all relative.


        1. Well the .75 as I noted in my earlier comment is a constant that existed in the present contract and my point is that it is also maintained in the proposed one. So literarily Verisign makes all the money in 100%. Whether they will loose in market share if they increase price is debatable but the point remains that Verisign at moment already makes so much @8+USD and ICANN should not remain at .75USD which was set when pricing started @5+USD. I was making the IANA point just to emphasize that Verisign isn't really doing a free service for ICANN hence I don't see why ICANN should not make as much as well. Overall, as it concerns end users, I think a continual increase will not be in the interest of registrants hence there should be a price cap of not more than 10USD or 5%
  4. A couple of things. On balance, this is the case of the dog chasing that car. I don't think this renewal merits comment, reason being all that is done is predetermined by agreement; wholesale price cap, cap on price increase etc. Do what Alan did and read the redlined copy.  When you see the material changes you will agree in the context of these things, they don't amount to a hill of beans.

    If memory serves both the .com and .net Agreements are subject to an amendment pertaining these caps and commits Verisign to seeking written approval to changes per Sec 7.3 of the base agreement thru December 2018.


    1. Carlton, can you explain your last sentence? Aren't ALL of these contracts subject to amendment by mutual negotiation/agreement?

      I agree with Maureen, Bastiaan and you that the changes to the agreement are not something that we need to comment on.

      I personally do not know enough about what constitutes fair wholesale prices to know if the 10% increase is reasonable or not. Presumably Verisign has little interest in pricing themselves out of the market. So I would agree to a comment on the pricing but am not advocating it.


      One thing that does strike m, however is that the price-cap that ICANN enforces on .com may be one of the things that hinders the increased usage of new gTLDs.

    2. I do think the one about pricing merits comment, every other section as I earlier stated doesn't.
  5. Come to think of it, I know .org has some community oversight and the proceeds one way or the other serves the Internet community (through ISOC). I wonder and am curious to know how Verisign contributes her proceeds of .net to internet development.
    1. AS a private for-profit company, I am sure that Verisign can list all sorts of "good stuff" they do, but I'm not sure there is a rationale for saying that it is expected.

      As noted, there is a levy per registered name that they pay to ICANN that is not paid by other registries.

      1. I actually do think there is rationale for saying that is expected, especially if "owner" of the TLD; the entity that awards the contract (ICANN) wants it as such. I also don't think we should compare .net with the rest of the TLDs which falls among the original six TLDs.

        I do think the Levy given to ICANN is not proportionate enough, that ICANN remains at less than a USD even as the "contractor" makes more money sounds like a reap-off to me.

        However i guess ICANN already has too much money and its probably best to let the US tax paying Verisgn make more in the interest of indirectly paying US tax (smile)