Washington, D.C. – In response to Assistant Secretary of Commerce Alan Davidson’s recent letter announcement that the National Telecommunications and Information Administration (“NTIA”) is renewing the contract through which the government condones Verisign’s monopoly control over “.com” – the most popular top level domain on the internet – the American Economic Liberties Project released the following statement.

“NTIA’s obsequious and noncommittal announcement clearly communicates only one thing: continued coziness with Verisign,” said Laurel Kilgour, Research Manager at the American Economic Liberties Project. “In deciding to renew Verisign’s contract without demanding lower wholesale prices, NTIA is ignoring its mandate to promote competition, forfeiting its leverage in exchange for vague promises of dialogue, and acquiescing to Verisign’s hollow attempts to deflect scrutiny to retail sellers and a small fraction of secondary market transactions. NTIA should waste no time in immediately pressing Verisign to roll back harmful Trump-era amendments that hike prices at twice the rate of inflation, and instead commit to fair market prices and restore competitive bidding rights in future renewal cycles. Moreover, the DOJ Antitrust Division should investigate Verisign’s long history of anticompetitive practices to maintain its monopoly.”

According to Economic Liberties’ recent analysis, current fair market prices for .com wholesale domains range from $0.87 to $4.37– less than half than Verisign’s announced $10.26 price for September 2024 and far less than the $13.45 Verisign would be allowed to charge by 2030 if existing terms are rolled over. The paper highlights that such fair market prices would cover all of Verisign’s costs– including what the NTIA’s letter calls ‘critical functions of the Internet’s technical architecture’– while still affording Verisign a reasonable profit. Although the NTIA did not seek any public comments, past renewal cycles have revealed widespread public recognition that Verisign’s prices are exorbitant.

Verisign CEO D. James Bidzos’s August 2, 2024 letter to the NTIA asserts that “our capped .com price increases have not always been passed through to benefit end-users,” echoing Assistant Secretary Davidson’s indication that discussions with Verisign would include addressing retail and secondary markets. However, as Economic Liberties’ paper explains, retail sellers (known as “registrars”) of top level domain names play a far less significant role in determining the prices end users pay, because 77% of the .com top level domain retail market is diversified among dozens of registrars. Verisign’s wholesale markup is nearly 25 times more than a representative retail markup, confirming that Verisign’s government-endorsed monopoly is the primary reason consumers, including millions of small businesses, are paying an ever-increasing private tax for what is essentially a utility service — keeping track of a list of domain name owners on a database.

A recent Verisign securities filing claims that “capped wholesale prices have contributed to the growth of an unregulated multi-billion dollar secondary market.” Thus, Verisign appears to be demanding the ability to hike prices without limit. Although a minority of popular .com top level domain prices have high secondary market prices, abandoning reasonable price constraints on wholesale markets would not solve that problem, and would instead inflate prices for the average consumer.

The Biden-Harris administration’s 2021 Executive Order on Promoting Competition mandates that all federal agencies, including the Department of Commerce, have an obligation to promote competition across the economy. NTIA’s Office of International Affairs oversees NTIA’s relationship with Verisign. NTIA’s own statutory mandate includes an express obligation to “advance… the full development of competition.” The original policy directive that led to Verisign’s control over the .com top level domain expressly rejected requests to give private sector actors antitrust immunity in the management of top level domains, as does NTIA’s contract with Verisign. Verisign’s control over the .com top level domain is also partially governed by a contract with the Internet Corporation for Assigned Numbers and Names (“ICANN”) but ICANN, too, has a competition mandate in its bylaws. Economic Liberties’ paper also provides a legal roadmap for potential antitrust actions against Verisign and ICANN, drawing on past private sector litigation that survived a motion to dismiss before settling.

Read Economic Liberties’ Report: “A Call for .Com-petition: Reining in Verisign’s Monopoly Over The Internet’s Most Popular Top Level Domain” here.

Read the Ninth Circuit’s previous ruling on private antitrust allegations against Verisign here, and a detailed complaint from the same case here. 

Learn more about Economic Liberties here.

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The American Economic Liberties Project works to ensure America’s system of commerce is structured to advance, rather than undermine, economic liberty, fair commerce, and a secure, inclusive democracy. Economic Liberties believes true economic liberty means entrepreneurs and businesses large and small succeed on the merits of their ideas and hard work; commerce empowers consumers, workers, farmers, and engineers instead of subjecting them to discrimination and abuse from financiers and monopolists; foreign trade arrangements support domestic security and democracy; and wealth is broadly distributed to support equitable political power.