This decision hurts the consumer/registrant in the end, making future registrations and renewal costs less accessible to a lot of markets.
For clarity, this $8.39 amount will become the wholesale cost to the registrar — we of course need to markup on top of that to cover our processing costs, overhead to offer great support, mitigate abuse, etc. Registrars do the heavy lifting in delivering the core user experience — we see none of this margin and the consumer does not see any incremental value from this hike by the registry.
Namecheap stands against removing price caps and allowing these incremental price hikes that only hurt the consumer.
Ted, I've used namecheap for years and I love it. One thing though, when I visit namecheap while using a VPN it makes me fill out a cloudflare captcha. Any way to stop that? Considering I have already paid you money, you have my address, name, phone number, etc. it seems a bit ridiculous to ask for a captcha when visiting using a VPN.
Captcha is likely being triggered by Cloudflare. We have heard this feedback in this past and have listened but it's always a tricky balance of fighting abuse/bots and presenting an extra step for the user.
I put this on my signup form and have had zero spam since, and it has very little impact on user experience. The fact that it doesn't feed the google surveillance machine is a bonus.
HCaptcha is not without problems, it is monetized by selling ML model training to 3rd parties, where the images and the labelling requests come from. Personally, I do not wish to be employed to train ML models of 3rd parties unknown to me. I have no idea about what model I'm helping train and what it is going to be used for. Transparency in this regard would go a long way towards making HCaptcha friendlier (I'm not going to talk about the ethics of free labor this time, though those too ought to be discussed.)
I have the same problem with VPN. I get captcha on so many websites over and over it's ridiculous. Sometimes on different pages of the same domain! It used to be you only got captcha for form submissions. But somewhere along the line you started getting it for simply visiting web pages as well. Part of me wonders if I'm just getting played by these companies into labelling all their training sets for them.
Surprisingly, Cloudflare doesn't force me to complete a CAPTCHA while logging in to manage my domains with them with a third-party VPN enabled. On the other hand, Namecheap doesn't even allow me to log in using that VPN.
I migrated all of my domains away from Namecheap after their support told me that my (non-Namecheap) VPN needed to be disabled before I could log in. Namecheap now sells their own VPN service, so there is some conflict of interest in the VPN restriction.
Cloudflare does not require me to turn off my third-party VPN before logging in, and sells domains at cost (at lower rates than Namecheap). For example, Cloudflare charges $8.03/year for a .com domain ($7.85 Verisign rate + $0.18 ICANN fee), which will go up to $8.39 + whatever the new ICANN fee is after the Verisign/ICANN price hike. Namecheap currently charges $8.88 for the registration year and $12.98 every year after that, with the rates also going up after the price hike. Porkbun also charges less for renewals than Namecheap, and covers TLDs that Cloudflare doesn't.
It sounds like our support was trying to help you troubleshoot a login issue — to say that we “require you to disable VPN” to login so that we can push our own VPN product on you is absolutely false and actually kind of absurd if you know anything about our business.
No, please don't twist my words. Namecheap's support rep told me that Namecheap is rejecting logins from customers using the third-party VPN, and that Namecheap has no plans to allow customers using the third-party VPN to log in. It is relevant to point out that Namecheap is refusing service to customers who use one of Namecheap's competitors. That's a conflict of interest, whether you admit to it or not.
In the end, it's under ICANN's purview and in this case, also allowed by a decision made by the Trump administration in 2018. Verisign has a Cooperative Agreement with the US Government. The gist:
"The amendment repeals Obama-era price controls and provides Verisign the pricing flexibility to change its .com Registry Agreement with ICANN to increase wholesale .com prices. Specifically, the flexibility permits Verisign to pursue with ICANN an up to 7 percent increase in the prices for .com domain names, in each of the last four years of the six-year term of the .com Registry Agreement. The changes also affirm that Verisign may not vertically integrate or operate as a registrar in the .com top level domain."
To add to that, why can they actually? Why doesn't the EU just start a new .com registry that the rest of the world can actually refer to? I don't have a complete understanding of the TLD world but I can imagine it's much like the AS world with BGP. If the rest of world decides that one registry (Verizon's .com registry) isn't the leading authority, but rather the EU's .com registry for example, is. Than what "can" verizon actually do against it? Sure, the internet would break with namesquatting but atleast it's better than paying a ransom.
Domain name registration is not their core business and their feature set is limited, as is their direct support for a lot of TLDs. It works well for a lot of people, which is fine but it is likely a loss-leader for them and treated as a user-acquisition channel.
The markup from legacy registrars is probably excessive, but with Google, Cloudflare, etc getting into the game, they can likely offer wholesale pricing to support the rest of their (very) profitable product lines.
Exactly. Depends how you define legacy registrars but I can agree with you to an extent. Namecheap's retail pricing is not excessive by any means — domains on their own are essentially commoditized — it all depends how much you value service and trust. Try calling Google if your domain is hijacked, your account is locked, or you have any number of other issues with a high value domain.
Yes. Just got off the phone with your support this morning. It made the process so much faster and easier. Instead of spending 3 hours trying to fix it myself and reading countless search results, I got it fixed in 5 minutes. Never, ever would happen with Google or Yahoo.
Others will do it cheaper and make it up with cloud, email, etc services. That’s why we’ve moved away from Namecheap (who were my go-to for many years).
If I’m really worried about domain hijacking, locking, etc I’d use something like MarkMonitor.
> Namecheap's retail pricing is not excessive by any means
$12.98 for a .com domain renewal is a 65% upcharge over the $7.85 wholesale rate. That is considerably more expensive than many of Namecheap's competitors.
I'm curious what the business expenses of a digital publisher like Elsevier look like. Peer review is not their purview, right? And I don't believe they pay the original authors a portion of each sale. Or that they need much of an advertising budget. What's the cost structure look like for a company like this one?
With all due cynicism, has their been public research on the sort of clever accounting tricks a company with Elsevier's business model must surely be using to keep their profit margin as low as 35% ..?
> I'm curious what the business expenses of a digital publisher like Elsevier look like.
Me too. Their investor relations report [0] is the best source I know of, but it's pretty vague. I only see breakdowns of revenue, no details regarding operating costs.
PLOS One is transparent regarding their costs though [1]:
"Natural Competition" in this space can never be. What you're seeing is exactly how this space turns out. Verisign controls the registry for the .com TLD. They run the centralized authority that ultimately says if a .com domain is "legit" or not.
The Registrars like Namecheap and friends are just the messengers authorized to register .com domains into this larger database and they pay Verisign for the privilege to do so.
While it's possible for anyone to go out and stand up their own .COM zone in DNS, any domains created by that registrar don't actually exist in the eyes of the larger Internet and will not work.
It's fine with 3%, 76% or 1000%, as long as competition is allowed.
I don't see that for Verisign, they're just rent seeking off domain. Their profit should probably be capped AT&T style back in their monopoly days with heavy regulation.
Yes, that is correct, but that is only an average, of course. There are many ways to break things down. When you look at industries, we find that in 2016, for example, beverage manufacturing has a .8% profit margin, grocery stores have 2.5%, auto dealers are 3.2%. Beer wine and liquor store industry is 3.4%. On the other hand, we have high profit industries: accounting, tax prep, bookkeeping is 18.3%, legal is 17.4%, leasing real estate is 17.4%. And again, that's average. You can have one CPA charging $50/hour, and another charging $500 per hour. Costs are pretty much the same, if they both are sole proprietors, but the one charging $500/hour is probably 500% plus profit margin, or whatever it is.
What is the relationship between the mean average net profit margin of the 500 companies in the SP500 index at this point in time and an "acceptable profit margin"?
It seems like an arbitrary metric to use. I would think focusing on barriers to entry, economies of scale, and legislative barriers to be more relevant factors in determining whether or not a profit margin is "acceptable".
> There are about 152 million domain name registrations .com today so Verisign will make about $82 million more in the next year following the price increase out of thin air.
> Verisign will be able to increase the price of .com in the next 3 years as well.
> Verisign will suck about $3 billion dollars out of the world economy just by having some powerful friends at ICANN.
Agree with all of these statements except this one:
> Verisign will suck about $3 billion dollars out of the world economy just by having some powerful friends at ICANN.
It's not a zero-sum game.
If Verisign manages to extract $3B from the poverty-stricken folks who are buying up .com domains, it doesn't just disappear (unless, of course, Verizon takes it in cash and sets it on fire in the basement.)
That $3B will then be spent on whatever pet projects Verizon feels like spending it on, thus re-injecting into the global economy.
I personally think that Verisign should have to compete to run the .com registry, just like how we do FCC spectrum auctions, but hand-wavy statements like "suck about $3 billion dollars out of the world economy" do not help make that case.
Apologies for the source of this, I couldn’t find a neutral organization hosting the excerpt.
https://mises.org/library/broken-window
In short - the $3 billion would be spent on improving the local economy of those individuals who would otherwise retain the money. Technically nothing is being destroyed, but the point of the article stands.
That's it's not lost or sucked out of the economy. It is transferred to new owners who will spend it and it will go to new owners and so on and so forth.
How does a company with a monopoly on something like this and a net profit margin of 46% on a billion dollars of annualized revenue justify an increase in an already very high wholesale price?
Devil's advocate.... what percentage of .com registrations are parked/squatted domains looking for a sucker to buy at huge markups from the registrar price? I'd be very happy if this made the math on squatting a little less desirable.
Edit: Don't get me wrong. If the reported profit margins at Verisign are correct they are clearly continuing to exploit their privileged market position unreasonably
Maybe the price should increase exponentially the more domains a single entity owns to incentivize owning fewer domains. I suppose squatters could create companies left and right just to hold onto more domains more cheaply, but still it would cost them more and it would be a pain in the ass to do it this way.
I prefer the term "Domain Scalping". Domain Squatting has a specific legal definition and it really only applies to people trying to sell a domain name that involves a company with a pre-existing trademark.
There is absolutely speculation involved. But a domain name is and inherently exclusive thing, is it not? Sure you can have different TLD's (.com, .co, .net, .org, etc) but there can be only one owner and that person is the sole determiner of how much they want in order to transfer ownership.
It's also my understanding that the trademark rule only applies if the trademark was made before the scalper purchased the domain name. If you're a startup or just someone who wants the domain then you're out of luck. Your only options are to pay the asking price or hopefully wait until their claim on it lapses and they don't renew.
I'm not sure if a 10% increase on registration price is going to materially change the math on squatting. My understanding is that squatting is like the VC game; you expect many of them to be complete losses, with a couple giving outsized returns.
If you want to address squatting, then address squatting. If you want to address people squatting on new domains (as if there are many squat-able .com's left), then change the registration for new domain registrations only (and not renewals).
A change like this will primarily affect small domain holders in a way that is financially not worth fighting back against individually. I don't really see a "devils advocate" position here.
Yeah... my intuition was/is it wouldn't make a big dent, but an interesting thought experiment.
That said. I think the small renewals are the part that makes holding onto these domains for years possible...
Random example. 20 years ago I had a one person local IT consulting side-gig. The domain was a not very useful, active less than a year and grabbed by a speculator as expected when I let it expire. It's been parked many places for years by various folks, current parking pages quote says they might be able get it for me for $120 [1] -- I could care less but if someone with less tech experience wanted it for their new small business they would likely bite.
Is there a economic mechanism you recommend to prevent this sort of thing?
Last I checked about half are registered but don't point to anything. I can't tell you how many are squatters hoping for a big pay day vs peoples' aspirations of starting a blog or small business that never went anywhere though.
Why does the world allow the USA govern the domain space at all? Some months ago the USA seized the domains used by Iran's IRGC, in addition the .org was almost up for grabs a while back, and now a sudden pricehike of the .com tld.
Obviously the internet has grown way beyond the powers of a relatively tiny non-profit that is ICANN so why not upgrade it into something more proper that is governed worldwide.
Anyone can use any DNS servers they want. These ones are run by the US Government because the US Government created them.
It would be almost trivial for a country, or group of countries to set up their own root servers and mandate that operating system vendors include them if they want to continue selling in their country. Then if there was something hosted on their servers everyone wanted to get to, it would spread outside of those countries by demand.
...But it isn't even necessary now with all the extra TLDs. If a government or organization wants to start a non profit TLD that just charges the bare minimum, they can do it without fragmenting themselves.
edit: In about 2004 a group of friends and I ran our own servers with SOAs for our own TLDs that we replicated to each other. It had a total of 3 useless websites, and 5 users, and only lasted a few months, but it was neat.
There's another article linked to from this one that has,
> The whole point here is that Verisign gets richer while ICANN does all the dirty work. All this while ICANN will receive additional funding ($20 million) from Verisign over the next 5 years. So ICANN will be spending a part our stolen money, money ICANN helped Verisign steal from us registrants, to get higher salaries and bonuses. Thanks ICANN!!!
I don't doubt that, it's also trivial for anyone to spin up their own local root mirror to resolve against, I'm just pointing out that maybe Verisign shouldn't be holding onto two. It's even pointed out on their Wikipedia page like some kind of trophy like "Oh hey look, we don't just run 1 we run *2*, that makes us a big deal". :eyeroll:
> it's also trivial for anyone to spin up their own local root mirror to resolve against
This is a bit of a tangent, but the idea of doing this has always made me nervous. Sure, the root zone is only a couple MB and you can easily set up a cron job to sync it regularly. But if that cron job breaks, it would be very easy not to notice, since it's not like the authoritative servers + glue records for the major TLDs change every day. (Or every decade.)
Imagine if that cron job has been broken for 9 months, the IT guy who set it up left 4 months ago, and suddenly a tiny TLD like ".tech" switches to a different authoritative DNS provider. Since it's not a very common TLD you'll never notice... unless some app uses "companyname.tech" for its mobile API - or one of a million other scenarios.
It's probably fine if big DNS server operators like Google/Cloudflare or major ISPs mirror the root zone, since they have the resources to make it robust. But small(-ish) IT operations running their own DNS - just use the root servers.
* Manage the database of all domain registrations in a TLD, and manage the infrastructure that registrars (the companies that customers actually interface with) use to create and update those records.
* Manage whois, although IIRC .com and .net use a "thin whois" model where the TLD whois server redirects to a whois server run by that domain's registrar.
* Run the authoritative DNS servers. This is the most critical component, since if the authoritative servers for .com and .net went down, it would basically be an "Internet outage" - an enormous amount of things would break if recursive DNS servers couldn't resolve .com or .net domains.
It's an important function, but as others have pointed out, it doesn't justify the price increase, Verisign's profit margins are huge. And the fact is that Verisign doesn't actually own .com or .net, they're basically a contractor for ICANN.
They used to be the only registrar for com., or at least Network Solutions was, before they got bought. Verisign owns one of the root servers, and I believe they are in charge of adding SOAs for all the com. domains. Though I suppose the other root servers could go rogue at any time if they wanted to.
I think that all other registrars have to go through Verisign in order to register sub domains off of com., but there may be other ways. I haven't really kept up with it in the last 20 years.
What is the real yearly cost of managing each .com domain?
To put it differently, what would be the profit margin for a .com registry maintainer that operated at reasonable efficiency (which might or might not reflect Verisign's own efficiency)?
A related question: what would be the base, fixed costs for running a reasonably efficient .com registry and what would be the additional per-domain costs?
It's a database with CRUD operations and some authentication, and a report generator that runs effectively a part-of-all-rows dump every so often.
The size of the database for .com is about 150 million records. At 4KB per record (generous), that's 600MB. It fits n RAM on a laptop you wouldn't consider suitable for using at the office.
Number of transactions other than reports is roughly 1 per year per record plus 10% growth, so about 5 per second.
Whoops! ICANN haven't altered their price controls for .com recently. Might be getting mixed up with the .org kerfuffle.
In the current .com contract, prices were fixed at $7.85 until 30th November 2018, and are allowed to raise the cost by 7% per year after that, under certain conditions:
"7.3(d)(ii) Registry Operator shall be entitled to increase the Maximum Price during the term of the Agreement due to the imposition of any new Consensus Policy or documented extraordinary expense resulting from an attack or threat of attack on the Security or Stability of the DNS, not to exceed the smaller of the preceding year's Maximum Price or the highest price charged during the preceding year, multiplied by 1.07."
When Network Solutions had a monopoly these were $100/2 years, later falling to $70/2 years. At this pace it will be a long, long time before we are back up to the bad old days.
Yeah, those days were bad. Yet that doesn't mean the present isn't bad, either. I don't care for paying hundreds of dollars each year for domains for passion projects, especially when I suspect the actual cost of running a TLD registry is much lower.
In other words, I think the .com registry should be a non-profit, public service, rather than a money-printing machine that some lucky company gets to exploit.
And I remember _faxing_ a letter on company letterhead signed by the CFO to prove that we were actually the entity we said we were. How the tables have turned...
As computers get more powerful as times go on, surely the cost of running the service should be going down not up? I wonder if the contract to run the COM registry is every re-tendered, or will it stay with Verisign forever.
Yes, this sounds like pure profit (and it is) but part of me wishes .com domains were 10x to 50x more expensive. It's selfish, I recognize that, but to purchase a basic domain today I'd have to pay anywhere from $10,000 to $1,000,000 to purchase an unused parked domain.
Is there a solution or a place where ICANN and/or Verisign limit the massive amount of parked domains?
A lot of domain squatting can be argued with: If they're sitting on your trademark, you basically can take it from them. But the ICANN dispute resolution process is like $1200 minimum, so most squatters like to sell for just under that.
Wouldn’t that just result in the domain squatters to be much wealthier and average people would be priced out, while the practice continues but the people profiting change…
Holding 10,000 domain for $500/yr is likely to become unsustainable for any company. My suspicion is that they'd likely raise the price of very rare domains but stop parking basic ones
So... What would be the fair price? Was $7.85 already outrageous? Should DNS be organized completely differently? Would such a reorganization actually make things cheaper or improve in any other way?
I think people want to see open bids where any company that wants to run a .tld can agree to do it for a given price until (ideally) the $/domain is bid down to near cost.
Capitalism is an economic system in which private individuals capture property, make it private, make it scarce, then charge others to use it, making profit. Profit is theft from society.
Stuff like this is the natural conclusion of such a system.
Verisign did not take a risk by developing the dns system - network solutions did that.
Verisign maintains a perfect monopoly over the addition of records to a central database, with minimal operational costs. Their business is almost pure profit by operating a mandatory service with highly inflexible demand.
If they were forced to compete on providing access to a core internet infrastructure (e.g. allow competitors to also add records to the .com registry) the price would lower to the actual cost of providing the service, which for an update/add query, I suspect would be in the pennies.
Exactly. Capitalism stifles innovation by taking resources from society and concentrating them into the hands of a few. If society was more equitable and if social safety nets were larger, we would see more people taking chances and innovating. Instead we have a society where people work under the duress of losing food and shelter, not exactly the best way to drive creativity.
That's the wholesale price. When you pay Route53 $12.99, they remit $7.85 to Verisign, who maintains the authoritative registry for the .com TLD.
By jacking up the wholesale rate by 7% (the largest annual increase they're allowed, per their ICANN agreement[1]), every single .com registration and renewal becomes 7% more expensive. Requiring services like Route53 to either pass it through to consumers or eat the cost increase themselves, if they even have the margins to.
I understand paying extra to make your life a little easier. Doesn't change the fact that in the world of .com domain registration, it's hilariously overpriced.
And yet people pay it routinely every day which is probably why Big V’s probably not afraid of upping the wholesale rate secure that the Amazon and the like are the one’s most likely to eat their own margins to not lose customers due to a consumer facing price hike.
There are other companies that do the same, but have a (small) subscription fee for their profit. But the prices of all domains are without any margin.
This decision hurts the consumer/registrant in the end, making future registrations and renewal costs less accessible to a lot of markets.
For clarity, this $8.39 amount will become the wholesale cost to the registrar — we of course need to markup on top of that to cover our processing costs, overhead to offer great support, mitigate abuse, etc. Registrars do the heavy lifting in delivering the core user experience — we see none of this margin and the consumer does not see any incremental value from this hike by the registry.
Namecheap stands against removing price caps and allowing these incremental price hikes that only hurt the consumer.
-Ted from Namecheap