Analysis The price of dot-coms will steadily increase over the next four years following DNS overseer ICANN's controversial renewal of Verisign's contract to run the top-level domain.
The wholesale price of a dot-com is $7.85. That will almost certainly increase by seven per cent starting in 2021 and each year thereafter until the contract ends in 2024, ending up at $10.29, providing dot-com operator Verisign with hundreds of millions of dollars in pure profit. Verisign, which has operated the dot-com registry for the past two decades, saw its share price jump seven per cent on the news.
ICANN felt it had little real choice but to approve the new contract, which involves the management of millions of dot-com domains, after it was negotiated directly between the US government and Verisign, and passed onto ICANN complete with a public announcement in 2018. Although the US government no longer has direct oversight of ICANN, it retains a significant influence over the domain name system and the dot-com contract is one of those areas.
But how non-profit ICANN has dealt with the contract raises yet more questions over its stewardship of the DNS world. Not only did the organization use its unique position to extract $20m from Verisign in return for renewing the contract, it also effectively ignored its own public comment process and laid bare its determined ignorance of the multi-billion-dollar market that it oversees.
Over 9,000 public comments were sent to ICANN regarding the contract renewal: a huge response for an organization that rarely receives more than 50 for a comment period. The organization admits in its summary of those comments that 95 per cent were explicitly opposed to the price rises.
But, rather than address those concerns in a constructive and objective manner, the staff-produced summary instead picks sides. It goes out of its way to diminish the arguments made against the changes as being self-interested, and actively argues that the volume of comments is not a cause for concern but a nefarious effort to influence the process.
One of the reasons for the high volume of comments is that several organizations involved in the speculation sector of domain name industry mobilized their members and customers to submit comments to ICANN, argues the staff report [PDF].
It goes on: The Internet Commerce Association (ICA), a group that represents domain investors, was particularly active in expressing its dissatisfaction with the proposed increase to the maximum wholesale price for .COM registry services, and mobilized its members to submit comments to ICANN org including creating and promoting a tool to generate templated comment submissions forms available on its website, as well as using blogs and opinion pieces in various industry sites.
In the version [PDF] of the public comment summary made available to ICANN board to assist in making the decision, these views are watered down.
But in their place, somewhat bizarrely, the staff lists the top-selling dot-coms of all time voice.com for $30m; sex.com for $13m as an indicator of the financial value of dot-coms domains, even though they represent an extreme end of the market, equivalent to equating the global real estate market to the sale of a mansion in the Hollywood hills.
There are over 145 million dot-com domains and while there is a healthy secondary market, it represents only a tiny percentage of the domains that exist. The vast majority of dot-com holders are held by individuals or companies who do not wish to sell them but have built their online presence on them, and will now have to pay significantly more following this contract renewal.
ICANN ignores this and instead delves, very briefly, into the world of domain name reselling: According to Namebio.com the average price of a .COM domain name traded on the secondary market and reported to Namebio.com was US$2,415, while the median price was US$1,643.
Verisign has a monopoly over the dot-com registry and makes 93 per cent of its $1.23bn annual revenue from dot-coms sales. Industry experts say that thanks to the way that internet registries work at scale, the costs to Verisign of running the registry are going down year after year. The business already makes at least a 50 per cent profit margin on dot-coms and any price increases will be almost all pure profit.
Verisign has frequently used the enormous financial heft that the dot-com contract gives it to control and distort the rest of the domain name market, not least when it secretly bought the rights to the .web registry, thereby killing off a possible competitor to dot-com. ICANN received the $135m auction price.
While acknowledging the central question of economics as to whether to approve dot-com price rises, and inserting its own commentary on the dot-com secondary market, ICANN then attempts to claim that economics should have no impact on its decision.
From the report: While some commenters requested market analysis or economic study prior to ICANN taking action on the proposed amendment, ICANN org is not a competition authority or price regulator and ICANN has neither the remit nor expertise to serve as one.
It goes on: ICANNs mission is to ensure the security and stability of the Internets unique identifier systems. Accordingly, ICANN must defer to relevant competition authorities and/or regulators, and let them determine if any conduct or behavior raises anticompetition concerns and, if so, to address such concerns, whether it be through price regulation or otherwise. As such, ICANN org has long-deferred to the DOC and the United States Department of Justice (DOJ) for the regulation of wholesale pricing for .COM registry services.
Despite ICANN attempting to argue it has no need to carry out economic analyses of the market it sets the rules for, it is happy to directly benefit from its decision. It appended a $20m stipulation to the contract signing, requiring Verisign pay ICANN $4m a year for the next five years in order to educate the wider ICANN community about security threats.
No such agreement exists with any other registry that ICANN oversees, and there is no explanation given for why this additional money is needed now, nor why such efforts are not covered by the existing ICANN budget, nor why the $20m needs to be attached to the signing of the new dot-com contract. It is transparently a pay-off negotiated by a market regulator from a company it regulates in return for its signature on a new contract.
Incredibly, the refusal to carry out any kind of economic analysis and an insistence that it is not a price regulator (despite the fact that the new contract continues to put ICANN in the position of deciding prices) comes as the organization faces another major decision entirely built around economics.
ICANN is due to decide in April whether to approve the sale of the .org registry to an unknown private equity firm for $1.13bn. That proposed sale was a direct result of ICANN approving a request by the current operator the Internet Society to lift price caps on all .org domains.
Despite overwhelming opposition to lifting those price caps, ICANN again ignored its public comment period and made the argument that it was not a price regulator in approving the changes. Its staff report on the thousands of comments was just as skewed and inaccurate as the one for the dot-com contract renewal. The day after the report was published, former ICANN CEO Fadi Chehade registered the company Ethos Capital which then went on the offer a billion dollars for .org a few months later.
In short, ICANN appears to be failing to do its job as DNS overseer, insisting that it can ignore economics while at the same time being thrown from crisis to crisis by those exact same forces. Not having the expertise is one thing; pretending that because you dont have it, you dont need it is quite another.
If the ICANN board wishes to be taken seriously, it must insist that the organization add a new economics department, and staff it with new and competent bods.
Sponsored: Webcast: Why you need managed detection and response
- Is COVID-19 Making the Internet Sick? - Government Technology - May 27th, 2020
- Thanks to Physics, This Chocolate Is Iridescentand Safe to Eat - Smithsonian.com - May 27th, 2020
- $100 million in bounties paid by HackerOne to ethical hackers - BleepingComputer - May 27th, 2020
- Types of Encryption: 5 Encryption Algorithms & How to Choose the Right One - Security Boulevard - May 27th, 2020
- Asian consumers worried about securing their data - BusinessWorld Online - May 27th, 2020
- Move online to survive businesss new mantra - BizNews - May 27th, 2020
- China Demands Us Withdraw Sanctions on Tech Suppliers - Manufacturing Business Technology - May 27th, 2020
- DDoS Protection Market Overview, Regional And Restraint Analysis By 2020 2026 - 3rd Watch News - May 27th, 2020
- Galaxy S20 security is already old hat as Samsung launches new safety silicon - The Register - May 27th, 2020
- Amid the COVID-19 crisis and the looming economic recession, the Electronic Bill Presentment and Payment (EBPP) market worldwide will grow by a... - May 27th, 2020
- Global Internet of Things (IoT) Security Market Research Studies Competitive Strategies, Regional Analysis Forecast 2025 - WaterCloud News - May 27th, 2020
- When COVID-19 and Economic Fallout Put Millions of Kids in Unsafe Places, Communities in Schools Went in After Them. - The 74 - May 27th, 2020
- DNS over HTTPS: How to activate it on Windows 10 Build 19628 - WinCentral - May 27th, 2020
- The lack of women in cybersecurity leaves the online world at greater risk - The Conversation US - May 17th, 2020
- COVID-19 Impact and Recovery Analysis | Internet of Things (IoT) Security Market 2020-2024 | Increasing Incidence of Cyberattacks to Boost Growth |... - May 17th, 2020
- Break On Through To The Other Side - Seeking Alpha - May 17th, 2020
- Post-COVID 19: The Virtual World And Digital Participation And Its Challenges In Ghana - Modern Ghana - May 17th, 2020
- Embracing Remote Learning and Working after COVID-19 as our New Reality - THISDAY Newspapers - May 17th, 2020
- The lack of women in cybersecurity leaves the online world at greater risk - Kiowa County Press - May 16th, 2020
- Internet security Market Research Report 2020 By Size, Share, Trends, Analysis and Forecast to 2026 - Cole of Duty - May 16th, 2020
- The best antivirus protection of 2020 for Windows 10 - CNET UK - May 16th, 2020
- Bill Proposes to Incentivize Cybersecurity Innovations With Cash Prizes - Nextgov - May 16th, 2020
- The Confessions of Marcus Hutchins, the Hacker Who Saved the Internet - WIRED - May 16th, 2020
- Spains DGT Warns Of A New Scam Circulating Which Tricks Users Into Giving Their Data - Euro Weekly News - May 16th, 2020
- What is the Internet of Things? - Fox Business - May 16th, 2020
- Air Force aims to make secure mobile identity management the norm - FCW.com - May 16th, 2020
- Internet Security Market Analysis, Size, Regional Outlook, Competitive Strategies and Forecasts to 2027 - Cole of Duty - May 9th, 2020
- (2020-2026) Internet Security Audit Market to Witness Robust Expansion throughout the Forecast Period - Cole of Duty - May 9th, 2020
- OODAcast A Conversation With Lou Manousos, CEO of RiskIQ - OODA Loop - May 9th, 2020
- COVID-19 Crisis To Help Akamai Replicate $300 Million+ Revenue Growth From The Past 2 Years? - Forbes - May 9th, 2020
- Global Internet Security Market is Segmented by Applications, Technology, Product Type And Service and Region - TechnoVally - May 9th, 2020
- Google Releases May 2020 Android Security Patch; Fixes Bug That Allowed Remote Code Execution - Mashable India - May 9th, 2020
- Gregory Boehm | The Harvard Press | News | Obituaries - Harvard Press - May 9th, 2020
- Wifi/ Internet/ IoT Testing and Security Solutions Market 2020 by Company, Regions, Type and Application, Forecast to 2024 - Cole of Duty - May 9th, 2020
- More Salt in their wounds: DigiCert hit as hackers wriggle through (patched) holes in buggy config tool - The Register - May 9th, 2020
- Zoom's Rise, Reign and Era of Reform at the Top of the Teleconferencing Throne - BroadbandBreakfast.com - May 9th, 2020
- The Pleasures and Pitfalls of Motherhood on Instagram - ELLE.com - May 9th, 2020
- Global IT Security Spending in Government Market Expected to reach highest CAGR by 2025: Check Point Software Technologies, Cisco Systems, Fortinet,... - May 9th, 2020
- Millions of Android users need to update, or risk having attackers take over their phone - Express - May 9th, 2020
- Deal of the Month: 50% off Integos Mac Internet Security X9 bundle - 9to5Mac - April 20th, 2020
- COVID-19 impact: Internet Security Firewall Market: Promising Growth Outlook with a Steady CAGR of X% 2020-2026 Cole Reports - Cole of Duty - April 20th, 2020
- Russia And China Hijack Your Internet Traffic: Heres What You Do - Forbes - April 20th, 2020
- Internet security Market 2020 Break Down by Top Companies, Applications, Challenges, Opportunities and Forecast 2026 Cole Reports - Cole of Duty - April 20th, 2020
- Investor Paul Meeks overhauls tech strategy due to coronavirus risks, turns negative on two widely held stocks - CNBC - April 20th, 2020
- Authentic8's Front Line of Defense Tool Aims to Safeguard Government Agencies from Cyberthreats - WashingtonExec - April 20th, 2020
- Blockchain: The Most Awaited Ally For The Security Of The Internet Of Things - CoinCodex - April 20th, 2020
- The internet's battle against bots is heating up - The Hustle - April 20th, 2020
- Bot creates millions of fake eyeballs to rip off smart-TV advertisers - Naked Security - April 20th, 2020
- Where to buy Kaspersky Internet Security? - RecentlyHeard.com - April 17th, 2020
- Citing coronavirus disruptions, PhishCloud offers year of free service to prevent phishing scams - GeekWire - April 17th, 2020
- The Global Software Defined Perimeter Market size is expected to reach $10.7 billion by 2025, rising at a market growth of 23.7% CAGR during the... - April 17th, 2020
- Women are essential helpers during crises but they need access to the internet | TheHill - The Hill - April 17th, 2020
- How To Browse The Internet Privately on Your Phone (Our #1 Tips) - Know Your Mobile - April 17th, 2020
- Faster Internet and protection against cyberattacks: UPC Business offers customers free additional services during the coronavirus crisis -... - April 17th, 2020
- Teaching your kids to surf the internet safely - The Star Online - April 17th, 2020
- No, the Internet Is Not Good Again - The Atlantic - April 17th, 2020
- Cyberattacks on endpoints will rise by up to 40 per cent unless we act quickly - Techerati - April 17th, 2020
- RBR's CyberPatriots Continue their Winning Ways - The Two River Times - April 17th, 2020
- The Weaponization of Dogs on the Internet - Lawfare - April 17th, 2020
- Investment opportunities in the internet sector - Times of Malta - April 17th, 2020
- Matt Hancock has no answers for anything but he does have a six-point plan and a very small badge - The Independent - April 17th, 2020
- Best internet security suites of 2020: anti-virus and anti-malware cyber security - TechRadar - April 17th, 2020
- The security conundrum of 5G network slicing - Urgent Communications - April 13th, 2020
- How to Make Sure that Antivirus is on your Endpoints - Security Boulevard - April 13th, 2020
- Why you can't trust your vote to the internet - CyberScoop - April 13th, 2020
- IoT security, neglected infrastructure, and a crisis of trust deemed major threats for 2022 - TechRepublic - April 13th, 2020
- Aspects of cybersecurity not to overlook when working from home - Big Think - April 13th, 2020
- The Rise of the Secure Internet Gateway - Communal News - April 13th, 2020
- The University and its students must be more considerate of essential USC staff - Daily Trojan Online - April 13th, 2020
- Foreign Operatives Allegedly Using Zoom To Spy On Americans - Brinkwire - April 13th, 2020
- Top Ways to Guard Against Work-from-Home Phishing Threats - Infosecurity Magazine - April 13th, 2020
- Get 2 years of Webroot internet security and antivirus for $50 at Amazon - BGR - April 12th, 2020
- Internet Security Software Market Growth Analysis, Top Manufacturers, Shares, Growth Opportunities and Forecast to 2026 - Germany English News - April 12th, 2020
- Foreign Spies Are Targeting Americans on Zoom and Other Video Chat Platforms, U.S. Intel Officials Say - TIME - April 12th, 2020
- iOS users beware: Myth of Apple security invulnerability is just that - The Star Online - April 12th, 2020
- Experts: Internet voting isn't ready in the face of coronavirus pandemic - CyberScoop - April 12th, 2020
- Slack in the security spotlight lessons for collaboration servers - Naked Security - April 12th, 2020
- Google removes Android VPN with critical vulnerability from Play Store - Naked Security - April 12th, 2020
- Is there a way to find this file that's being used by another processor? - Windows 10 Support - BleepingComputer - April 12th, 2020
- Global Internet of Things (IoT) Security Industry 2020 Market Research With Size, Growth, Manufacturers, Segments And 2026 Forecasts Research -... - April 12th, 2020