Contract anniversary will hit late next year, giving Verisign the option to raise prices.
I’ve long assumed that Verisign (NASDAQ: VRSN) couldn’t raise the .com wholesale price in 2026.
The thinking was this: Verisign last increased the price in September 2024. That was the last price increase in its previous contract period, and a new contract period started later in 2024. The contract states that Verisign can increase the price in the last four years of every six years of the contract.
So 2024 could have a price increase, but not 2025 and 2026.
During NamesCon, a domain investor challenged me on this, so I decided to dig into it. Indeed, my thinking was simplistic.
First of all, the September 2024 price increase date was arbitrary. Recall that it was Amendment 35 of the Cooperative Agreement between Verisign and the National Telecommunications and Information Administration (NTIA) that granted Verisign the right to increase prices with ICANN’s approval. Amendment 35 was effective October 26, 2018.
ICANN and Verisign didn’t enter into an amendment to their 2018 registry agreement until March 27, 2020. That amendment set the same October 26 date, meaning Verisign could increase prices on October 26, 2020.
It might seem like a distant memory, but that was when the pandemic was wreaking havoc across the world. So Verisign announced a price freeze. It didn’t increase prices until later in the contract year — September 1, 2021.
Verisign followed the same pattern for four years, raising prices by 7% each year on September 1. In other words, it increased the price toward the end of the contract years during which it was allowed to increase prices, not at the beginning. The last increase allowed under that six-year contract was in September 2024.
The Verisign agreement with NTIA was renewed on November 29, 2024.
In a blog post commemorating the renewal, NTIA stated, “The current terms do not permit any increases in wholesale .com prices until September 1, 2026.”
This seems to conflict with the actual amendment and ICANN’s resulting contract with Verisign (pdf), which states:
(ii) Registry Operator is entitled to increase the Maximum Price by the smaller of (A) the Maximum Price for the preceding Pricing Year (as defined in Section 7.3(d)(iii) below), multiplied by 1.07, or (B) the highest price charged by Registry Operator for Registry Services during the preceding Pricing Year, multiplied by 1.07, and in the case of (A) or (B), in each Pricing Year of the final four Pricing Years of every six year period, with the first six year period beginning on October 26, 2018 (emphasis added)…
The agreement also states, “‘Pricing Year’ shall mean the period from October 26 to October 25.” Thus, it seems it could raise prices on October 26, 2026.
Regardless, ICANN will enter the third year of its contract in late 2026. Whether a price increase is possible on September 1, as the NTIA blog post stated, or after October 26, 2026, as ICANN’s contract and the NTIA amendment seem to state, it’s possible we’ll see an increase from $10.26 to $10.97 late next year.
Verisign must provide notice at least six months before a price increase.
Source: https://domainnamewire.com/
