8 ms·

How is this anything but rent seeking on the part of Verisign? Edit: not surprised how this got regulatory approval... https://www.politico.com/news/2022/04/09

How is this anything but rent seeking on the part of Verisign? Edit: not surprised how this got regulatory approval... https://www.politico.com/news/2022/04/09/website-domain-more-expensive-00023524 https://www.politico.com/news/2022/04/09/website-domain-more...

dismalpedigree 3y ago
Also rent seeking by namecheap. But agreed. It’s parasitic.
- deleted 3y ago
  [deleted]
- ksec 3y ago
  >Also rent seeking by namecheap What has it got to do with namecheap when they dont own the registry of .COM or .XYZ?
  - MuffinFlavored 3y ago
    I'm not saying they are doing anything right or wrong but they are probably a profitable company who could have theoretically spared to absorb some (or all) of it without passing it through to their customers Instead, they are passing it on 100%.
    - Vanclief 3y ago
      Why should namecheap subsidize the cost? That makes 0 sense and I say it as a namecheap customer. I don't see how its fair for them to cover the cost and I don't want them to do so because I am a happy customer and don't want them to go out of business or lower their product quality.
      - MuffinFlavored 3y ago
        > Why should namecheap subsidize the cost Why are they entitled to have their profit margins protected no matter what? https://en.wikipedia.org/wiki/Wage-price_spiral https://en.wikipedia.org/wiki/Wage-price_spiral https://en.wikipedia.org/wiki/Hyperinflation https://en.wikipedia.org/wiki/Hyperinflation Certain businesses get made obsolete over time. Namecheap decided to pass along 100% of the cost, what if their competitor passes along 50%?
        tedivm 3y ago
        Namecheap is passing along 209% of their cost. They're raising prices on their cut more than Verisign is on theirs.
      - ksec 3y ago
        Precisely, Not to defend Namecheap but we are in a different time. I don't know everyone's age on HN. But If they were just 40s, they would have lived in a zero interest era for 15 years and nearly all of their professional lives. We are having inflation, cost of money going up. The margin that used to work for Namecheap may no longer works for them now. And you have plenty of option outside of NameCheap. And again, none of this could be called rent seeking. Of course there is an argument in US and Tech today ( as shown in many of the comment ) that margin is somehow evil. And should be as low as possible. I guess that is a different argument.
    - deleted 3y ago
      [deleted]
    - tedivm 3y ago
      Verisign is adding $0.62, while Namecheap is increasing their cut by $0.68. They're passing it through by 209%, not 100%.
  - CameronNemo 3y ago
    I think because the Verisign price increase is only 7%, and presumably namecheap has a margin on top of that. So increasing the price by 9% and blaming the registry could be considered unreasonable.
    - skilled 3y ago
      But isn't the 7% already agreed upon in the wholesale agreement? https://itp.cdn.icann.org/en/files/registry-agreements/com/com-fees-01-09-2023-en.pdf https://itp.cdn.icann.org/en/files/registry-agreements/com/c... I was under the impression that the other $6 comes from Namecheap, no? Maybe I misunderstood it.
      - CameronNemo 3y ago
        This comment breaks it down. Namecheap is using the opportunity to sneakily increase their markup, which is a bit underhanded IMO. https://news.ycombinator.com/item?id=37213773 https://news.ycombinator.com/item?id=37213773
  - meltedcapacitor 3y ago
    They use the occasion to get more commission, by encouraging renewals further in the future to "lock" the current price. Presumably they get the full 10 years worth of commission today when a .com is renewed for that long.
- midasuni 3y ago
  Can you not simply move your registration to another provider (Amazon etc)
monetus 3y ago
“I think calling them a monopoly at this point is an unfair comparison. Verisign is no more a monopoly than your Ford dealer is a monopoly,” Redl said. “It’s not the original days of the internet where that was the only top-level domain.” It is bothers me that the monopoly is excused this way.
- jonathankoren 3y ago
  TLDs may sort of be fungible, but not really. No one looks at widgets.com and widgets.tube as identical, whereas no one really cares about one car versus another beyond feelings of personal worth.
  - listenallyall 3y ago
    I think Hyatt and Hilton have a lot stronger brand names than "a friendly lady named Shiela" but Airbnb built an empire on the latter.
    - jonathankoren 3y ago
      Comeback when anyone builds an iconic brand around .$BRAND_NAME or even .museum Seriously. It’s not an issue of brand recognition. It’s an issue of decades of basic phishing defense.
      - listenallyall 3y ago
        bit.ly
- Joeri 3y ago
  When I live somewhere and the owner of the water company decides they need to increase prices 9% despite having lower costs, they are definitely exercising their monopoly, even when there are several other utilities coming to my home and so many other kinds of beverage I might acquire.
  - 3y ago
robomartin 3y ago
> How is this anything but rent seeking on the part of Verisign? While I generally agree with you --this smells like potential rent-seeking--, in order to be able to conclusively label it as such we have to know about the real cost structure that drives a company like Verisign. All of that information is here: https://investor.verisign.com/financial-information/annual-reports https://investor.verisign.com/financial-information/annual-r... I wish I had the time to dive into this. I just don't. I generally try to avoid making assertions without having done some work in support of them. That's why I can't reach this conclusion --I can suspect it to be true though. As a reminder, "rent" in "rent seeking" isn't the colloquial "rent", as in what you pay to rent a car or a house. Economic rent, as a term of trade, is related to financial gains obtained without increases in productivity. As such it has been "fuzzified" to make it apply to all kinds of things that have nothing whatsoever to do with economic rent-seeking. As an example of real rent-seeking, an article in Forbes describes how writing an essay in college to obtain a grant (and maybe even admission or tuition discounts) is classic rent-seeking. Same with a company lobbying government for subsidies --they didn't make their process or product better in exchange for the financial gain. In other words, the question here is squarely centered around the real cost structure at Verisign. Frankly, I don't know everything they do and how much it costs to support the TLD's they administer. I still remember when domains were free --as a fool, I didn't register a pile of them back then. It sure feels like rent-seeking. That doesn't mean it is. Without the proper analysis of their accounting this characterization might not be correct. In other words, it might be quite possible that they can fully justify the increase in rates due to increases in costs. Not to go too far, wages have gone up across the board (in numerical, not real terms) and inflation has made everything more expensive. Power, taxes, food, transportation, labor, etc. Every single business has had their cost structure increase, in some cases dramatically so. Given this framework, I'd be cautious about ascribing nefarious intent to any business increasing their pricing. Put a different way: A rent-seeking claim needs to include a "Minimum Viable Financial Analysis" in support of this conclusion. Prices going up isn't enough evidence of this at all. Not liking price increases is no evidence at all.
- CameronNemo 3y ago
  I think the onus is on Verisign to justify their price increases, not the consumer if the monopoly. So far I've seen them hand waive about inflation and "demand for domains". As of 2022, their operating margin was about 65%... That doesn't indicate a company that needs to increase prices.
teaearlgraycold 3y ago
If we're going to fix issues with domains I would like to find a way to ban domain parking and "premium" domain prices sold by registrars. I'm fine with an individual holding a handful of unused domains, but the legislation should eliminate anyone holding domains as their primary source of income.
thayne 3y ago
If the other TLDs are actually providing competition, and TLDs are fungible, wouldn't that drive the price down, not up?
- scrollaway 3y ago
  But TLDs are not fungible. If Apple switched to apple.name or apple.hospital because "it's cheaper" you'd raise more eyebrows than you have.
  - thayne 3y ago
    That's part of my point. Since customers can't actually replace a ".com" domain with a domain from a "competitor" TLD, it isn't actually competition. If .name was just as good as .com then if verisign increased the price, they would lose customers who would use .name instead. So the fact that verisign can increase the price when .com is _already_ more expensive than other TLDs is evidence that they do have a monopoly.
willio58 3y ago
Yep, digital landlord that should be abolished from the system.

dismalpedigree 3y ago

Also rent seeking by namecheap. But agreed. It’s parasitic.

deleted 3y ago
[deleted]
ksec 3y ago
>Also rent seeking by namecheap What has it got to do with namecheap when they dont own the registry of .COM or .XYZ?
- MuffinFlavored 3y ago
  I'm not saying they are doing anything right or wrong but they are probably a profitable company who could have theoretically spared to absorb some (or all) of it without passing it through to their customers Instead, they are passing it on 100%.
  - Vanclief 3y ago
    Why should namecheap subsidize the cost? That makes 0 sense and I say it as a namecheap customer. I don't see how its fair for them to cover the cost and I don't want them to do so because I am a happy customer and don't want them to go out of business or lower their product quality.
    - MuffinFlavored 3y ago
      > Why should namecheap subsidize the cost Why are they entitled to have their profit margins protected no matter what? https://en.wikipedia.org/wiki/Wage-price_spiral https://en.wikipedia.org/wiki/Wage-price_spiral https://en.wikipedia.org/wiki/Hyperinflation https://en.wikipedia.org/wiki/Hyperinflation Certain businesses get made obsolete over time. Namecheap decided to pass along 100% of the cost, what if their competitor passes along 50%?
      - tedivm 3y ago
        Namecheap is passing along 209% of their cost. They're raising prices on their cut more than Verisign is on theirs.
    - ksec 3y ago
      Precisely, Not to defend Namecheap but we are in a different time. I don't know everyone's age on HN. But If they were just 40s, they would have lived in a zero interest era for 15 years and nearly all of their professional lives. We are having inflation, cost of money going up. The margin that used to work for Namecheap may no longer works for them now. And you have plenty of option outside of NameCheap. And again, none of this could be called rent seeking. Of course there is an argument in US and Tech today ( as shown in many of the comment ) that margin is somehow evil. And should be as low as possible. I guess that is a different argument.
  - deleted 3y ago
    [deleted]
  - tedivm 3y ago
    Verisign is adding $0.62, while Namecheap is increasing their cut by $0.68. They're passing it through by 209%, not 100%.
- CameronNemo 3y ago
  I think because the Verisign price increase is only 7%, and presumably namecheap has a margin on top of that. So increasing the price by 9% and blaming the registry could be considered unreasonable.
  - skilled 3y ago
    But isn't the 7% already agreed upon in the wholesale agreement? https://itp.cdn.icann.org/en/files/registry-agreements/com/com-fees-01-09-2023-en.pdf https://itp.cdn.icann.org/en/files/registry-agreements/com/c... I was under the impression that the other $6 comes from Namecheap, no? Maybe I misunderstood it.
    - CameronNemo 3y ago
      This comment breaks it down. Namecheap is using the opportunity to sneakily increase their markup, which is a bit underhanded IMO. https://news.ycombinator.com/item?id=37213773 https://news.ycombinator.com/item?id=37213773
- meltedcapacitor 3y ago
  They use the occasion to get more commission, by encouraging renewals further in the future to "lock" the current price. Presumably they get the full 10 years worth of commission today when a .com is renewed for that long.
midasuni 3y ago
Can you not simply move your registration to another provider (Amazon etc)

monetus 3y ago

“I think calling them a monopoly at this point is an unfair comparison. Verisign is no more a monopoly than your Ford dealer is a monopoly,” Redl said. “It’s not the original days of the internet where that was the only top-level domain.” It is bothers me that the monopoly is excused this way.

jonathankoren 3y ago
TLDs may sort of be fungible, but not really. No one looks at widgets.com and widgets.tube as identical, whereas no one really cares about one car versus another beyond feelings of personal worth.
- listenallyall 3y ago
  I think Hyatt and Hilton have a lot stronger brand names than "a friendly lady named Shiela" but Airbnb built an empire on the latter.
  - jonathankoren 3y ago
    Comeback when anyone builds an iconic brand around .$BRAND_NAME or even .museum Seriously. It’s not an issue of brand recognition. It’s an issue of decades of basic phishing defense.
    - listenallyall 3y ago
      bit.ly
Joeri 3y ago
When I live somewhere and the owner of the water company decides they need to increase prices 9% despite having lower costs, they are definitely exercising their monopoly, even when there are several other utilities coming to my home and so many other kinds of beverage I might acquire.
- 3y ago

robomartin 3y ago

> How is this anything but rent seeking on the part of Verisign? While I generally agree with you --this smells like potential rent-seeking--, in order to be able to conclusively label it as such we have to know about the real cost structure that drives a company like Verisign. All of that information is here: https://investor.verisign.com/financial-information/annual-reports https://investor.verisign.com/financial-information/annual-r... I wish I had the time to dive into this. I just don't. I generally try to avoid making assertions without having done some work in support of them. That's why I can't reach this conclusion --I can suspect it to be true though. As a reminder, "rent" in "rent seeking" isn't the colloquial "rent", as in what you pay to rent a car or a house. Economic rent, as a term of trade, is related to financial gains obtained without increases in productivity. As such it has been "fuzzified" to make it apply to all kinds of things that have nothing whatsoever to do with economic rent-seeking. As an example of real rent-seeking, an article in Forbes describes how writing an essay in college to obtain a grant (and maybe even admission or tuition discounts) is classic rent-seeking. Same with a company lobbying government for subsidies --they didn't make their process or product better in exchange for the financial gain. In other words, the question here is squarely centered around the real cost structure at Verisign. Frankly, I don't know everything they do and how much it costs to support the TLD's they administer. I still remember when domains were free --as a fool, I didn't register a pile of them back then. It sure feels like rent-seeking. That doesn't mean it is. Without the proper analysis of their accounting this characterization might not be correct. In other words, it might be quite possible that they can fully justify the increase in rates due to increases in costs. Not to go too far, wages have gone up across the board (in numerical, not real terms) and inflation has made everything more expensive. Power, taxes, food, transportation, labor, etc. Every single business has had their cost structure increase, in some cases dramatically so. Given this framework, I'd be cautious about ascribing nefarious intent to any business increasing their pricing. Put a different way: A rent-seeking claim needs to include a "Minimum Viable Financial Analysis" in support of this conclusion. Prices going up isn't enough evidence of this at all. Not liking price increases is no evidence at all.

CameronNemo 3y ago
I think the onus is on Verisign to justify their price increases, not the consumer if the monopoly. So far I've seen them hand waive about inflation and "demand for domains". As of 2022, their operating margin was about 65%... That doesn't indicate a company that needs to increase prices.

teaearlgraycold 3y ago

If we're going to fix issues with domains I would like to find a way to ban domain parking and "premium" domain prices sold by registrars. I'm fine with an individual holding a handful of unused domains, but the legislation should eliminate anyone holding domains as their primary source of income.

thayne 3y ago

If the other TLDs are actually providing competition, and TLDs are fungible, wouldn't that drive the price down, not up?

scrollaway 3y ago
But TLDs are not fungible. If Apple switched to apple.name or apple.hospital because "it's cheaper" you'd raise more eyebrows than you have.
- thayne 3y ago
  That's part of my point. Since customers can't actually replace a ".com" domain with a domain from a "competitor" TLD, it isn't actually competition. If .name was just as good as .com then if verisign increased the price, they would lose customers who would use .name instead. So the fact that verisign can increase the price when .com is _already_ more expensive than other TLDs is evidence that they do have a monopoly.

willio58 3y ago

Yep, digital landlord that should be abolished from the system.