Come October 1st, and after an increase in domain name prices in 2007, Verisign is again exercising its contractual right to raise prices. The base registration fees for .com domain names will be hiked to $6.86 from existing $6.42 per .com domain for all registrars. Currently, registrars pay VeriSign $6.42 per .com domain name. This price hike is within maximum 7 percent increase allowable under VeriSign’s contract (which runs through 2012) with ICANN. Chances are, registrars will pass the price increase on to customers. This is apart from $0.20 ICANN fee for every domain name registered.
It helps to note that the ICANN has given VeriSign a monopoly over the .com and .net TLDs, allowing the company to hike prices up each year. Good news is that at least ICANN had the wisdom to put a 7 percent annual cap on increases. This will somehow put a limit on the amount of pain VeriSign can inflict on registrars each year. Assuming that VeriSign continues the 7 percent rise each year (which seems reasonable as per the company’s history), registrars will be looking at $9.00 for .com domains by the time the current contract ends in 2012—a 50 percent increase in six years.
Justifying the higher prices, VeriSign cited increases in the amount of traffic and cyber attacks on the global TLD infrastructure it is responsible for. The company says it is boosting infrastructure capacity ten-fold by 2010, as well as increasing DNS capacity from 400 billion daily queries to over four trillion, even though it currently only processes a peak of 33 billion queries per day under current conditions.