The Freename Forum

The domain name industry must prepare for higher costs: The internet administration ICANN has announced that it will increase the fees for generic top level domains. With the return of Donald Trump to the office of US President, the hope of lower .com fees is also likely to be a thing of the past.

When a press release talks about ‘financial stability is essential’ and ‘highly complex challenges’, it's all about money. This also applies to ICANN; the network administration announced on 30 October 2024 that it would increase the fees in its contracts with registries and registrars as part of an ‘ICANN Registry-Level and Registrar-Level Fees Adjustment’. The non-profit organisation ICANN is primarily financed by fees paid for the registration of domain names under generic top-level domains. In the past, these fees have accounted for more than 95 per cent of ICANN's annual budget, with the remainder coming from various voluntary contributions and sponsorship. Since 2012, most registries have paid an annual fee of US$ 25,000 for licensing as a registry and a transaction fee of US$ 0.25 per registered domain. The transaction fee is only due once a gTLD has reached a certain number of registered domains. In addition, registrars pay an annual accreditation fee of US$ 4,000 and a transaction fee of US$ 0.18 per domain. Furthermore, a total variable annual fee of US$ 3.42 million is split evenly among all active registrars, with exceptions to keep the variable fees low for smaller registrars.

However, these fees are no longer sufficient if ICANN is to continue to ensure a secure and stable Domain Name System. The Internet administration anticipates continued demand for its services, rising costs and stagnating or even falling funding, i.e. a decline in registration numbers. The fee increases are intended to be in line with inflation in order to cope with rising costs; however, it is not intended as a source of funding for new work (for example, the nTLD programme or the fight against DNS abuse), nor is it intended to replace other initiatives that would improve ICANN's current financial situation. Specifically, ICANN wants to increase the quarterly fixed fee for registries from US$ 6,250 to US$ 6,450, i.e. to US$ 25,800 per year; the transaction fee is to rise to US$ 0.258. More importantly, by aligning fees with general price increases, future increases are likely to occur much faster. Tenants with an index-linked rent agreement are already familiar with this effect from previous years. For domain registrars, the transaction fee is to rise to US$ 0.20 per domain and the variable fee to US$ 3.8 million. ICANN will give all stakeholders the opportunity to comment on the planned increases as part of the public comment process, which is expected to open in December 2024. The fee increases for registries will then come into force on 1 January 2025 and for registrars on 1 July 2025.

The industry faces additional costs with the election of Donald Trump as the 47th President of the USA. Under President Barack Obama, the National Telecommunications and Information Administration (NTIA) froze wholesale prices for .com domains; under the first Trump administration, the NTIA lifted this price freeze and allowed VeriSign to increase .com fees by seven per cent in the last four of six years. Although there has recently been talk of curbing these price increases, according to domain blogger Andrew Allemann, it seems highly unlikely that the previous decision will be reversed in light of Trump's election victory. In addition, the Department of Justice is less likely to bring antitrust lawsuits in future than it was under the Biden administration.

The ‘ICANN Registry-Level and Registrar-Level Fees Adjustment’ can be found at:
https://www.icann.org/en/system/files/f ... t24-en.pdf