The .COM money scam. A monopoly for VeriSign. What to do when $450 million is not enough?
Here’s a quick and light .COM registry economics lesson.
This article will help you understand the enormity of the scam about to be pulled off by VeriSign – the .COM registry operator.
First, there are four players involved here:
1. ICANN. This acronym stands for the Internet Corporation for Assigned Names and Numbers. They approve registry and registrar deals. The have the ability to approve or disapprove the pending .COM deal.
2. Registry. For each type of domain name (i.e. .COM, .NET, .ORG, etc.) a registry exists and it’s operated by a company like VeriSign. VeriSign operates .COM and .NET. The registry maintains the Internet routing systems, domain availability lookups and basic records. They have no end user (i.e. registrant) contact and deal only with registrars and ICANN.
3. Registrars. These companies (GoDaddy.com is a registrar) act as a go between with the various registries and the registrants. They provide registrants with customer service and also other products that enable the use of their domain names.
4. Registrants. That’s you. You’re the user of the domain name and it’s your money that pays for all of the above. It’s really important that you read this. Unless we get this turned around, you’re about to be taken – again!
The economics lesson starts here.
It’s important to first realize that it costs VeriSign, the .COM registry operator, next to nothing to add each new .COM name to the registry, because unlike registrars, VeriSign:
• Does not have to provide customer service to registrants — that’s provided by registrars like GoDaddy.com.
• Is not under any competitive pressures whatsoever to reduce prices – each registry has a monopoly until the registry contract is re-bid.
• Has everything handled by an automated process. The costs of operating these automated processes (i.e. bandwidth, storage, etc.) have been and are expected to continue to decline. Click on the link here to see historical charts. "Full Article here"