XYZ’s comments on the proposed amendment to the .COM Registry Agreement

[Daniel Negari <d@xxxxxxx>]

*XYZ’s comments on the proposed amendment to the .COM Registry Agreement*



On June 30, 2016 ICANN posted for public comment a proposed amendment to
the .COM Registry Agreement that would extend the term of the agreement
until 2024. Without this amendment the current term of the .COM registry
agreement would expire on November 30, 2018. XYZ is firmly opposed to this
early extension. ICANN should not passively go along with Verisign’s
selfish goal of extending its unfair monopoly over the internet’s most
popular top-level domain name. Instead, ICANN should act in the spirit of
its Bylaws and work with the NTIA and United State Department of Commerce
to put the rights to operate the .COM top-level domain to a competitive
public auction among capable internet registry operators for the benefit of
the public. .COM is a unique generic top-level domain and, as shows by its
oversight by the NTIA and US Department of Commerce, exists to provide a
public service. Accordingly, it should be awarded to the Internet Registry
Operator willing to operate the top-level domain in a manner most
beneficial to the public.

Currently, Verisign is able to charge $7.85 per annual registration of .com
domain names.  However, this price is grossly out of line with the actual
cost per registration to a registry operator for each incremental
registration. If the right to operate .COM were put to a competitive public
tender, the market would show that the .COM registration fees to registrars
could be below $2.00 per registration. In fact, if XYZ <https://xyz.xyz/>
were allowed to take part in such a competitive public tender, XYZ would be
prepared to offer registration fees to registrars in the range of $1.00 per
registration.  This is in line with the market rate for registry services,
which XYZ is very familiar with. XYZ would not only be able to operate .COM
charging only $1.00 per registration, but it would be able to do so with a
healthy, but reasonable, profit margin and with no impact on the
operational stability, reliability, security, and global interoperability
of the internet. XYZ has at our disposal the infrastructure, technical
resources, human resources and industry knowledge to operate a namespace
with hundreds of millions of domains under management. With such options
out there, it is an absolute catastrophe that Verisign is allowed to
operate .COM charging such high fees.

At the current .COM registration volume of approximately one hundred and
twenty-five million registrations, assuming a registration fee to
registrars of $7.85, Verisign is grossing approximately $950,000,000 per
year in registration fees from .COM alone. If there is a competitive public
tender for the right to operate .COM and the winning registry charges only
$1.00 per domain name, which is $6.85 less than Verisign is currently
charging, the annual savings to .com registrants would be $856,250,000 per
year [1].   Even if the number of .COM domains under management remained
steady at around one hundred and twenty-five million, over the course of
ten years that would equal a savings to the general public of approximately
eight and half billion dollars. To put that in perspective, that is the
approximate equivalent of the entire estimated gross domestic product of
the Republic of Rwanda in 2016 [2]. It would be a travesty for all of this
money to go into the deep pockets of Verisign shareholders instead of the
public that makes up the world internet.

Further, a competitive public tender would be in line with ICANN’s core
values as stated in its Bylaws, which mandate “[i]ntroducing and promoting
competition in the registration of domain names” and “promot[ing] and
sustain[ing] a competitive environment” (ICANN Bylaws Article I, Section
2). Extending the term of Verisign’s registry agreement for .COM without
working diligently to put some sort of competitive process in place works
only to undermine these core values. Instead of working with Verisign to
help Verisign extend its unfair monopoly over .COM, ICANN should be working
closely with the NTIA and the US Department of Commerce to find any legal
way possible to put in place some sort of competitive process in place to
determine which company operates .COM moving forward. Anything other than
of this approach goes against ICANN’s values and purpose and forces the
public to unnecessarily pay billions of dollars to a company that has
already reaped billions in profits from its unfair awarding of the .COM
top-level domain.

Two years remain on Verisign’s current .COM registry agreement. The only
way ICANN can fulfill its obligation to the global Internet community is to
ensure that .COM is operated for the benefit of the global internet
community, and not the for the benefits of Verisign’s shareholders. Instead
of extending the current term, ICANN should spend the next two years
working with the Department of Commerce and the NTIA to put in place a
competitive public tender for the rights to operate .COM.

Sincerely,



Daniel Negari

CEO.XYZ







[1] Assuming the lower price was passed on to consumers.

[2] International Monetary Fund Estimates for 2016