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Do Not Extend The .Com Contract!

  • To: comments-com-amendment-30jun16@xxxxxxxxx
  • Subject: Do Not Extend The .Com Contract!
  • From: "Keven Dabney" <me@xxxxxxxxxxxxxxx>
  • Date: Wed, 13 Jul 2016 15:32:11 -0700


This contract extension should not be considered.  As others have
already commented, this contract needs to be put out for a competitive
bid.  The only thing this contract extension does is that it protects
the VeriSign monopoly over the .com top level domain and pads VeriSign's
shareholders pockets with billions of dollars of free cash flow.

As others have stated in the past, the .com registry should be operated
for $1 or $2 per domain name per year.  As technology advances, hardware
becomes more powerful and IT infrastructure becomes cheaper and easier
to deploy.  There is no reason that .com domain prices should be so
ridiculously high, just because one company holds a monopoly over
operating a simple database.

VeriSign, as a registry, does not even have customers outside of
registrars.  The registry amazingly does not maintain a database of more
than only a few fields of data per domain name.  And the registry is not
even required to maintain whois records, as this is done by each
individual domain name registrar.  The process of operating a TLD is
quite trivial, especially as we now have hundreds of companies doing it
with the gTLD rollout.  There is no reason that VeriSign should be given
a presumptive right to renew the .com contract without putting it
through a proper bid process where other companies can submit offers to
run the registry.  There is a good chance VeriSign will be re-awarded
the contract through a competitive bid process, but ICANN cannot
continue to allow the monopoly over .com domain names to continue as is.

It is appalling that ICANN allow this egregious and gluttonous behavior
to continue.  Back in 2012 I commented on ICANN's public forum regarding
the 2012 contract renewal:

At the time I had pointed out that bandwidth prices go down every year. 
Servers become more powerful every year.  The overall costs of IT go
down every year.   And that VeriSign's network and infrastructure is
already built.

Now, more than 4 years later, we can see how true this really is. 
VeriSign's own 2015 Annual Report and 2016 Proxy report states "Our
planned property and equipment expenditures for 2016 are anticipated to
be between $40.0 million and $50.0 million and will primarily be focused
on infrastructure upgrades and enhancements to our product portfolio."  
This is practically peanuts when revenues are over $1 billion per year,
and non-GAAP operating margins for VeriSign are estimated to be as much
as $726 million in 2016.  Based on their own projections.

In VeriSign's 2015 Annual Report the company promotes that the .com
registration base "represents a 6% increase over the base at the end of
the prior year."  This is not from VeriSign's doing, but merely because
.com is the most sought after domain name extension.  And as the .com
namespace grows and continues to become more valuable, VeriSign is
making more and more windfall profits every year.  VeriSign is already
making boatloads of cash, hand over fist.  VeriSign promotes this
themselves in their most recent Annual Report stating "Revenues totaled
$1,059 million for 2015, marking the fifth straight year of revenue
expansion while steadily growing our margins and free cash flow."

With such a lucrative monopoly, this is exactly why VeriSign wants an
early renewal on the .com namespace. And for a longer period of time. 
VeriSign wants to lock in its gluttonously profitable monopoly. 
VeriSign is trying to pull a fast one by saying this is more secure and
stable for the domain name system.  However, it is obvious this EARLY
EXTENSION is a greedy attempt to lock in one of this centuries most
amazing deals, which is not in favor of the global Internet community. 
This contract renewal is only good for one company: VeriSign.

ICANN's core values state that it should "[promote] competition in the
registration of domain names where practicable and beneficial in the
public interest."  The mere consideration of an early contract extension
on the .com contract with VeriSign at the current pricing is 100%
against ICANN's core values.  And a slap in the Internet Community's

ICANN should not allow this early extension.  Nor should ICANN even
consider it.  ICANN should encourage and promote competition.  ICANN
should work in the public's favor and do what is possible to force this
contract to go to public tender, and/or to force VeriSign to change the
gluttonous windfall rate that it has on the .com contract.  Absolute
worst case scenario, ICANN should work to force VeriSign into pricing
that would at the very least reflect the profits VeriSign was making in
2012.   But not protect this wildly profitable monopoly for an
additional 10 years to come.

The proposed early extension of the .com contract should not be

Keven Dabney
Internet Professional and Evangelist

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