comments-net-renewal-20apr17

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April 2017

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[Comments-net-renewal-20apr17] Prices could be $14.52/yr in 2023! Opposed to .NET renewal with 10% annual price increases. Contract should be tendered, to foster competition.
by George Kirikos April 21, 2017

April 21, 2017

Submitted by: George Kirikos Company: Leap of Faith Financial Services Inc. Date: April 20, 2017 With regards to the proposed renewal of the .NET registry agreement posted by ICANN at: https://www.icann.org/public-comments/net-renewal-2017-04-20-en my company is opposed to the proposed contract. In particular, rather than being renewed, there should be regular tender processes for operation of the registry for a fixed term, as is standard procedure for procurement contracts. Under the sweetheart deal that ICANN (pretending to negotiate in the public interest) has bestowed upon Verisign, consumers have already been harmed to the extent of tens of millions of dollars per year. And this harm increases year after year with the 10% annual price increases that are permitted, which far exceed inflation. ICANN now proposes to increase this annual harm from tens of millions of dollars per year to hundreds of millions of dollars per year. One need only look at section 7.3 of the red-line version of the agreement: https://www.icann.org/sites/default/files/tlds/net/net-proposed-renewal-red… where the price used to be $4.95/yr, and has skyrocketed to $8.20/yr, a whopping increase of 65.66% during the 6 year term of the prior contract. That's a $3.25/yr increase in fees, on approximately 15 million .NET domain names, or nearly $50 million PER YEAR in additional profits for Verisign at the expense of consumers. Under competition (and their are many potential candidates to compete for the .NET contract, including Afilias, Neustar, Nominet, Google, Amazon, etc), the annual registry fees would be much lower, perhaps $2/yr or even less. If prices were $2/yr instead of $8.20/yr, that would be a savings for consumers of 75.6%, or roughly $93 million PER YEAR. After 6 more years of 10% annual price increases, consumers could be facing registry fees of: 2018: $9.02/yr 2019: $9.92/yr 2020: $10.91/yr 2021: $12.00/yr 2022: $13.20/yr 2023: $14.52/yr (of course, those are the fees to registrars, who would then pass them along to consumers with an additional margin; registrars face competition amongst other registrars) Compared to $2/yr, a $14.52/yr fee on 15 million domains represents a loss to consumers of $187.8 million PER YEAR ($12.52/yr x 15 million). Obviously these allowed price increases are untenable. Compared to the $4.95/yr starting point 6 years ago, in 6 years consumers could be facing prices that are 193% higher (i.e. comparing $14.52/yr to $4.95/yr), when all other technology costs (hosting, bandwidth, storage costs, computing) have been decreasing. All other technology costs face competition, whereas ICANN protects Verisign from competition, harming consumers in the process. As ICANN appears incapable of negotiating in the public interest, it is time for this anti-competitive and anti-consumer contract to be set aside on anti-trust grounds by the relevant national authorities. Sincerely, George Kirikos 416-588-0269 http://www.leap.com/

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