If you've paid for a .com domain name in the last three years, the Coalition for ICANN Transparency (CFIT) says that you've paid too much—and it's trying convince federal courts that the law has been broken.

VeriSign has an exclusive contract with the Internet Corporation for Assigned Names and Numbers (ICANN) to manage the .com and .net DNS registries. According to a group of disgruntled registrars, the whole situation is an antitrust nightmare, one allegedly perpetuated by lobbyists, astroturfers, planted news stories, and "stacked" public meetings.

The case was brought back several years ago but was tossed by a federal judge before going to trial. Now, the Ninth Circuit Court of Appeals has ruled (PDF) that CFIT can proceed with its case against VeriSign, a case based on "antitrust statutes drafted in the late 19th century."

Back to the future

CFIT's complaint is based on the relationship between Verisign and ICANN. The 2006 contract awarding the main .com registry to Verisign, for instance, was allegedly done without any competitive bidding and it led to prices that "were artificially high."

CFIT cares about domain prices because it is made up of key DNS registrars (who can resell .com names but must still pay VeriSign) and DNS registrants. Under an older contract, VeriSign's prices for .com domains were capped at $6 until the end of 2006. After that, they were allowed to rise by seven percent in four out of the following six years.

If the system had been open to competitive bidding, said CFIT, "the costs of domain name registrations would have fallen to at least as low as $3.00 per domain name, with at least the same level and quality of services provided by VeriSign."

If you're buying or selling .com domains in bulk, cutting the price in half is a big deal—one worth going to court over. So CFIT went to court, arguing that VeriSign was acting illegally under the Sherman Antitrust Act.

But how did VeriSign convince ICANN to award it such a contract in the first place? According to CFIT, it used just about every technique you could imagine.

"In order to get ICANN to agree to the terms VeriSign desired," said CFIT, "VeriSign paid lobbyists to support its position, 'stacked' ICANN's public meetings with VeriSign supporters, hired purportedly independent organizations and individuals to advocate VeriSign's position, paid bloggers to attack ICANN's reputation, planted news stories critical of ICANN in mainstream media, threatened ICANN with litigation, arbitration, and government investigation, and indeed eventually brought suit against ICANN in federal and state court. VeriSign's suit against ICANN was settled, allegedly as a result of VeriSign’s offer to pay ICANN a fee of between $6 and $12 million in exchange for the favorable terms in the agreements."

Despite the long list of charges, a federal court found that CFIT had not actually made a proper claim under the law against VeriSign. On Friday, the Ninth Circuit in San Francisco overturned that decision and said that the case could proceed in reference to .com domains; CFIT did not present enough evidence to proceed with its claims about .net domains, however.

Domain names have certainly been good to VeriSign, which recently announced 13 percent year-over-year revenue growth. The company says that there are now 183 million top-level domain names in the world, with the largest single chunk of those being .com.

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