US government to take down Verisign “cartel” — Groups ask
Trio of advocacy groups asks government to halt renewal of .com agreement with Verisign.
Calling Verisign (NASDAQ: VRSN) a “cartel” and “economic termite,” a consortium of three advocacy groups has asked the U.S. government to halt the renewal of Verisign’s contract to run .com.
American Economic Liberties Project, Revolving Door Project, and Demand Progress Education Fund sent letters (pdf, pdf) to both the National Telecommunications and Information Administration (NTIA) and the Department of Justice.
The groups argue that the government erred in giving Verisign the ability to raise prices in its last contract. The letters state that Verisign effectively has a monopoly on domain names since of the market power of .com domain names.
As stated by the letters, when the NTIA decided under the Trump administration to lift price caps, it gave the Department of Justice only 20 days to provide feedback.
The agreement between the NTIA and Verisign allows Verisign to increase prices by 7% each of the last four years of every six-year contract cycle. Verisign has increased prices every opportunity it has been afforded. The wholesale price of .com domains will increase to $10.26 in September this year.
Importantly, that agreement states that both the NTIA and Verisign have to agree to modify the terms of that contract. Verisign has no incentive to do so unless the NTIA offers more favorable contract terms.
Having watched this issue for years, the only way I think the contract can be nullified is with anti-trust action. I’ve often thought a more likely source of such action would come from the European Union.
But most people who own domains own just one or two, so this issue usually doesn’t rise to the level of causing broad pushback. I’ve often wondered who, other than the Internet Commerce Associaton (a rather modest advocacy group that supports people who own sizable amounts of domains) would complain.
That’s what makes these letters interesting.
American Economic Liberties Project fights back against what it calls “monopolistic corporations” that “govern much of our economic lives and exert extraordinary influence over our democracy.” Revolving Door Project scrutinizes executive branch appointees to ensure they use their office to serve the broad public interest. Demand Progress Education Fund pushes to policies that service the public, not entrenched power.
