The price caps have been taken off .org domains, meaning that more than 10 million largely non-profit organizations will end up paying more for their online presence each year.
The increase could be, say, $10 or so per domain each year, on top of the usual $12 to $20 annual renewal fee. The exact figure has not been set in stone: it could be zero, it could be $100; it'll be whatever registrars think they can get away with.
However, that's beside the point. Crucially, the decision is controversial because the organization that signed the new contract, which itself uses a .org domain, has been accused of regulatory capture and actively ignoring its own public comment process.
ICANN, the US-based overseer of the internet's domain names, is required to post new contracts for public comment, which it did in March. With just days to go before the deadline, however, a critical aspect of the new contract – the lifting of price caps that have been in place for decades – was noticed and prompted a backlash.
Over 3,300 comments – a huge number given that ICANN's public comment periods rarely attract more than 50 – were sent and were overwhelmingly against the price caps being removed. One study noted that over 98 per cent of comments were explicitly opposed to the change. Just six supported lifting the caps, all from industry lobbyists.
One letter, signed by several high-profile American non-profit organizations, including National Public Radio (NPR), C-SPAN, the National Geographic Society, the YMCA and others, argued that lifting the caps would "introduce new budgetary uncertainty to the class of organizations that can least afford such uncertainty."
The .org domain is specifically used by non-profits to highlight their status. As such, the group argued, "every additional dollar earmarked for domain name registrations is a dollar that is not available to advance the public interest purpose of nonprofit registrants that use the .org name space."
And why the price rise exactly?
That letter – whose arguments were reflected in many other comments - also questioned ICANN's explanation for the change.
"ICANN has articulated no compelling policy basis for this proposed change," it stated. "Instead, ICANN has represented that the intent is just to bring the .org Agreement into conformity with the base registry agreement used by ICANN with respect to other gTLDs not set aside for organizations that serve the public interest. This strikes us as conformity for its own sake. ICANN should not disregard the public interest in favor of administrative convenience."
That appeal seemingly fell on deaf ears, however. Yesterday, on Sunday, ICANN posted an update on an obscure part of its website announcing that it had signed a new contract with the organization that runs the .org registry, Public Interest Registry (PIR), effective today, July 1, 2019.
There was no public announcement of the decision, and a comparison of the signed contract with the proposed one shows that no changes have been made in response to the public comment period, prompting anger from those who feel ICANN is too close to those it is supposed to be overseeing.
Despite the organization holding one of its tri-annual meetings in Marrakech last week, there was no public discussion of the contract and no mention of the issue at its Board meeting last week. The decision appears to have been made entirely by the organization's staff.
No rationale or explanation has been given for the decision. And while a staff summary [PDF] of the public comment period, posted on June 3, noted the arguments against lifting the price caps, critics say it failed to note the overwhelming opposition to them, stating only that price caps were a "primary concern voiced in the comments."
The failure to account for, or even respond to, the thousands of responses has renewed concerns that ICANN lacks basic accountability and is failing to live up to its public interest mandate.
And why exactly?
Worse, the decision to push ahead with the contract change and ignore opposition to the price caps appears to have been made solely to appease two of the most powerful internet registries that ICANN is supposed to be overseeing, and in response to subtle pressure from the US government.
Back in November, the US Department of Commerce signed a new contract with dot-com operator Verisign in which it extended its contract to run the ubiquitous internet registry until 2024 and lifted a price freeze imposed by the Obama Administration.
The announcement saw Verisign's share price rocket by 16 per cent – a $1bn jump in value – for the simple reason that no one expects people to dump their .com domains; the 139 million .com registrants are, in effect, a captive audience. Officially, ICANN has to approve that $1bn price change.
In the past five years, over one thousand new extensions have been added to the internet and the dominant registry operators – those running .com, .org and so on – argue that this increased competition means that they should have previous controls on the sale of their domains lifted.
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But domain industry experts are skeptical about that claim. The latest market summary by dot-com operator Verisign revealed that all the so-called "new gTLDs" combined still only account for 6.5 per cent of the total market, or 23 million domains. In other words, the dot-com registry alone is six times larger than the entirety of the new market competition.
Notably, despite the longstanding price caps and clear market impact of lifting price caps on the internet's largest registries, ICANN did not include or even carry out an economic analysis of its proposed change in .org contract (as well as similar changes to the .info and .biz registries.)
The majority of ICANN's budget comes from the registry operators and the registrars that sell domains, who pay annual fees to the organization as well as a small per-domain fee. Price rises benefit everyone except end users.
One of the very few comments in favor of lifting the price caps specifically noted comments from the head of the US Department of Justice’s Antitrust Division about how it supported "reducing regulation, by encouraging competitive markets" and then noted in the same paragraph that ICANN "had its contracts reviewed by the DoJ’s antitrust division, which concluded that only .com had market power in the domain space."
It was a clear message that ICANN would be crossing not only its main funders but also its own government (ICANN is based in Los Angeles) if it did not approve the changes.
The fact that ICANN signed a new contract with such far-reaching consequences despite having carried out no economic analysis, despite thousands of comments opposing the change, and then did so without an explanation, or public discussion, or a Board resolution, is indicative of an organization that can, and does, act in its own interests and with impunity, despite the fact its oversees a vast public resource and claims to be acting in the public interest. ®