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Domain Name Price Hike Blasted as Unfair

Domain Name Price Hike Blasted as Unfair
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Jun 8, 2006 1:30 PM PDT    Text size: 
WASHINGTON — A congressional hearing of the House of Representatives Small Business Committee got testy yesterday when allegations of “monopolization and unreasonable price hikes” were levied against VeriSign.

In March, a lawsuit settlement reached by ICANN gave VeriSign the right to raise fees on .com domains by 7 percent a year. ICANN’s board approved the settlement by a 9-5 vote. The move ended a contentious period that began in 2003 when VeriSign legally took control of all unassigned .com and .net domain names.

“I have no objection to VeriSign’s continuing to run the .com registry,” W.G. Mitchell, CEO of Network Solutions, told CNetNews.com. “What I do have is an objection to it being done in a manner that gives a perpetual monopoly to a company with unregulated price increases.”

The average price for a .com name is $6.

While ICANN operates independently, the March settlement must be approved by the U.S. Commerce Department before it takes effect. This wrinkle has made the debate intensely political, with smaller domain name registrars fighting for a piece of the pie. They have to compete with the political clout of VeriSign, which maintains a strong lobby in Washington.

“When you’re talking about increased prices and you’re allowed to do that at VeriSign, I don’t know that’s going to produce any better safety or security from anyone who’s paying that additional cost,” Rep. Sue Kelly, R-NY, told CNET.com. “And I haven’t heard anything today that tells me that would be the case.”

On the other side of the debate, Cliff Stearns, a Republican chairman of a House Energy and Commerce subcommittee, wrote a letter saying that the ICANN settlement “is crucial” to commerce. Stearns accepted a campaign contribution from VeriSign in 2005.

Rep. Rick Boucher, D-Va., has asked the House Energy and Commerce Committee to launch an investigation of the settlement. Sen. Orrin Hatch, R-Utah, sent a letter to Attorney General Alberto Gonzales in which he asked for further scrutiny of the settlement, especially in regard to antitrust implications.

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