Verisign responds to letters from interest groups.
Verisign (NASDAQ: VRSN) today filed a notice with the SEC stating that the .com contract cannot be released for bidding.
The company was responding to a letter from the American Economic Liberties Project and other interest groups calling on the U.S. government to terminate the contract and put it out to tender.
In the application, Verisign states:
The campaign and letters claim that the 32-year-old cooperation agreement between the Department of Commerce (Department) and Verisign covering the .com top-level domain registry may be terminated by the Department on August 2, 2024, and that in that case, management of .com may be transferred following a competitive bidding process. This claim is false: If the Department decides to allow the cooperation agreement to expire, which Verisign does not seek to do, the .com registry will continue to be managed under the terms of the valid, enforceable registry agreement between Verisign and the Internet Corporation for Assigned Names and Numbers (ICANN), which ensures the continued security, stability, and resilience of this critical Internet infrastructure in accordance with the global multistakeholder system of Internet governance.
The letters and campaign are based on a fundamental misunderstanding and ignore the clear language of the Cooperation Agreement, the nature of cooperation agreements, the course of the business relationship between the Department, Verisign, and ICANN, ICANN’s role as the central coordinator of the Domain Name System, long-standing U.S. policy, and the explicit terms of the ICANN/Verisign .com Registry Agreement.
It is true that the contract language does not allow Verisign to lose the contract. The extension that Verisign signed during the Trump administration goes a step further and secures price increases.
The only thing the government can do with the contract is to withdraw from it and let Verisign and ICANN negotiate. If that were to happen, there would be less price control than there is now.
After the recent contract extension, I had the impression that only pressure from the competition authorities could prevent Verisign from raising prices.
