How will rising domain fees affect you?

VeriSign, the company that holds a state-sponsored monopoly on the registration of .com and .net domain names, announced yesterday that it will raise the rates they charge to domain registrars, effective October 15. The price of registering a .com domain will go from $6.00 USD to $6.42 USD, a 7% increase, while .net domains will jump 10% from $3.50 USD to $3.85 USD.

VeriSign says they need the extra cash (about $23 million more from .com alone) to handle increased traffic in domain name queries and to defend against cyberattacks.

Daily Domainer has the details on VeriSign’s pricing agreement with ICANN that allows them to institute these increases, along with up to three more such increases over the next six years — or maybe even more, if they can document enough expenses resulting from security attacks.

No doubt the domain registrars will pass the additional costs along to their customers. I hold nine .com and .net domain names, so if my registrar doesn’t add any more margin to the increase my cost will go up less than four bucks a year. Only those who hold a very large number of domain names should suffer any real financial hardship from this. Domain hosting and management costs far exceed the price of name registration.

Considering that this will be the first price increase since 1999, the amount seems reasonable enough. What bothers me is that the hike is determined at the whim of a monopoly that is enforced by the US government, instead of being determined by a free market.

What do you think? Are we getting our money’s worth from VeriSign? Could an open market for domain registration ever work? Will you be counting your pennies the next time you want to register a domain?