VeriSign Raises the Rent on .Com, .Net Domains

The firm, which controls the two most popular domain name suffixes on the net, said the annual ante for .com will increase by 7 percent to US$6.42, and the .net fee will go up 10 percent to $3.85.

Fee Agreement

VeriSign collects fees from brokers that sell domain names on its behalf, such as Go Daddy, and in turn is supposed to use the money for the upkeep of that domain.

The increases are allowed under the renegotiated registry agreement between VeriSign and the Internet Corporation for Assigned Names and Numbers (ICANN), which was settled in November 2006.

Under that agreement, VeriSign can raise fees without explanation by up to seven percent in four of the next six years. As these increases were higher than that threshold, a reason was required.

Infrastructure Improvements

The rate hike is a response to increased Internet traffic and domain name system (DNS) queries on VeriSign's global infrastructure , which have increased from an average of 1 billion queries per day in the 2000 to nearly 30 billion queries per day today, the company said.

In addition, there is a need -- albeit a costly one -- to create additional security infrastructure protect the domain name infrastructure and to fight back against cybercriminals, VeriSign added.

"There has been a tremendous increase in Internet usage, while at the same time bad guys continue to look for vulnerability on the system," Tom Galvin, a VeriSign spokesperson, told The E-Commerce Times.

Caring for the system is much more intensive then it was a few short years ago, Galvin noted. "This will be the first registry fee increase for .com and .net since the fee structure was put in place by ICANN in 1999."

ICANN is the private sector, nonprofit corporation created in 1998 to assume responsibility for the Internet's system of unique identifiers, including domain names and the addresses used in a variety of Internet protocols.

Titan Deal

In February, the company announced Project Titan, an initiative to expand the capacity of its DNS systems tenfold by 2010 -- to 4 trillion queries per day.

The extra capacity is needed in order to respond to any unusual surges from legitimate demand, as well as to overcome any denial-of-service or other hacker attacks, according to Galvin.

The Mountain View, Calif., company will control the master database of both domains until 2012 under the ICANN agreement. With about 62 million .com names and 9.1 million .net names currently in use, VeriSign stands to generate substantial revenue from the price hike.

The fee increase does not require regulatory approval.