And the Other Half of the Price Increase Goes to the Intellectual Infrastructure Fund …

Well, VeriSign didn’t waste any time raising domain registration prices, did it? On Thursday, the company said that registry fees for domain names will rise from $6 to $6.42 for .com names and from $3.50 to $3.85 for .net names. “This will be the first registry fee increase for .com and .net since the fee structure was put in place by the Internet Corporation for Assigned Names and Numbers (ICANN) in 1999,” VeriSign said. According to the company, the price hike is necessary to pay for the increased volume of domain-name system queries it handles. But not everyone buys that explanation. After all, Verisign holds a de facto monopoly over the iconic .com and .net domains and, under the terms of its latest contract, can raise domain renewal prices up to 7% without justification. “The actual cost of providing the service of registering a domain name and publishing it to the root server operators is probably on the order of $0.03 per year per name, or less,” Karl Auerbach, a former ICANN board member, told Information Week. “If we look at the difference between cost ($0.03) and the registry price ($6.42) we see that ICANN has gifted VeriSign with a built-in profit margin of about 21,400% of price over cost. This cumulates over the 60,000,000 names (in .com) to a gift of about $383,400,000 per year granted by ICANN to VeriSign.”