Prices on Dot-Com Domains Set to Spike if New Deal is OK'd

Activists, nonprofits and multiple internet domain registrars are upset over what they call a sweetheart deal involving the U.S. government; VeriSign Inc., which maintains the dot-com domain; and a not-for-profit that oversees the internet's domain name system. The deal, which still needs to be signed off on, would allow an already highly-profitable public company to raise prices on website wholesalers for dot-com domains, by as much as 70% over the next decade.


The deal would likely mean that any increased pricing would be transferred over to users, rather than be borne by the registrars who sell domain registrations and charge for renewals. There are more than 144 million registered dot-com domains on the internet since it was introduced in January 1985.

In 2018, the Reston, Virginia-based VeriSign and the U.S. Department of Commerce's National Telecommunications and Information Administration changed their dot-com cooperative agreement, repealed an Obama-era price freeze on the dot-com registry that kept prices at no more than $7.85.

Instead, the agreement noted that due to a "more dynamic DNS marketplace" the annual price of registration and renewal for dot-com domain names can be changed once VeriSign and Internet Corporation for Assigned Names and Numbers, which oversees the address book of the internet, agree to amend the registry-registrar agreement to allow for the price increase. That increase would cap increases to 7% over the max price charged the prior year, with a schedule of two year freezes every six years.

The 2012 agreement, which had kept prices frozen, had noted that VeriSign would be entitled to increase prices only if the Commerce Department provides "prior written approval that the exercise of such right will serve the public interest, such approval not to be unreasonably withheld." The NTIA did not respond to a request for comment.

Because dot-com is governed by two agreements, VeriSign is now waiting for ICANN, a not-for-profit public benefit corporation, to sign off on changes to its "registrar agreement," which would reflect and essentially enact such a price increase.

At the same time, ICANN is also evaluating a proposed agreement that would have VeriSign pay the Playa Vista, California-based ICANN $20 million over five years - beginning in January - to "support ICANN's initiatives to preserve and enhance the security, stability and resiliency of the DNS (domain name server)," according to ICANN. It's unclear exactly how the money would be used or why it's needed.

"It has become apparent that many people don't realize that ICANN is not a price regulator," said Göran Marby, ICANN's president and CEO, said in a statement to dot.LA. "Our registry agreement with VeriSign, the registry operator of dot-com, merely reflects the pricing changes to the Cooperative Agreement between VeriSign and the U.S. Government under which dot-com fees are governed."

Richard Kirkendall, who is the CEO of Namecheap, an ICANN-accredited domain name registrar that's based in Los Angeles, emailed its dot-com customers Monday, linking to a letter that strongly opposed the new agreement, which was announced by ICANN and VeriSign jointly on Jan. 3.

"ICANN and VeriSign made these changes in secret, without consulting or incorporating feedback from the ICANN community or Internet users," Kirkendall wrote, adding that ICANN has a history of making similar deals behind closed doors and ignoring unified opposition.

In a comment filed at the end of the public comment period on Friday, Verisign, which reported revenue of $1.23 billion for 2019, wrote that it was troubled by an "attempt by a small but vocal group" to "hijack" the ICANN public comment process, distort its outcome and undermine ICANN's legitimacy for its own financial purposes. VeriSign has maintained that the changes will "strengthen the security, stability and resilience of the Domain Name System."

But Cory Doctorow, a special advisor to the Electronic Frontier Foundation, a nonprofit that advocates for digital civil liberties, said he found it hard to reconcile ICANN's mission to exercise good governance over the DNS with its actions. Doctorow added that this situation demonstrates the need to find another entity to manage dot-com that doesn't want to "gouge internet users."

"I appreciate that ICANN would like to have the $20 million that VeriSign promised it, but VeriSign is spending that money to make $800 million, which is money that domain registrants will end up shelling out," Doctorow said.

ICANN has recently received criticisms over its handling of the ongoing potential sale of the dot-org registry. California Attorney General Xavier Becerra stepped into the fight earlier this month over whether a private equity firm should be allowed to purchase control of the registry for all dot-org internet domains in a deal that's worth more than $1 billion.

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Can the company that popularized the online shopping cart reinvent the real thing?

Amazon unveiled its first smart grocery cart on Tuesday morning. The new "Dash Cart," as it's known, uses cameras, sensors and a scale to automatically detect and log items on a digital display behind the handle. The technology makes it possible for shoppers to leave the store without going through a traditional checkout line.

The end result is similar to the Amazon Go grocery and convenience stores, without the elaborate technical infrastructure of those stores. The Dash Cart works on its own, requiring no sensors in the shelves or specialized cameras overhead.

In that way, it solves at least part of the mystery of why Amazon has been developing conventional grocery stores, without the Amazon Go technology.

"We built this predominantly as an alternative to things like express checkout, where you still end up waiting in line, or fumbling with self-checkout machines," said Dilip Kumar, Amazon's vice president of physical retail and technology, in an interview this week. "The experience will be designed to be seamless, very convenient, very easy for customers to understand."

Amazon's new "Dash Cart" uses sensors to determine which items are placed in a cart, allowing shoppers to check out automatically, without going through a traditional line. (Amazon Photo)

The Dash Cart is slated to debut later this year at the company's new Woodland Hills, Calif., grocery store, which is currently being used to fulfill delivery orders.

Unlike the Amazon Go technology, the Dash Cart won't entirely replace traditional grocery checkouts in the stores where it's used. Amazon says it's designed for small- to medium-sized grocery trips. The cart fits one to two grocery bags.

Amazon is one of many retailers and technology companies looking to streamline the process of shopping and checking out in physical stores. Such initiatives are driven in part by a quest for new cost efficiencies given the traditionally razor-thin profit margins in the grocery business. The approach has taken on added significance given requirements for social distancing and contact-less transactions due to the global COVID-19 pandemic.

Smart shopping cart startup Veeve, for example, was started in 2018 by a team that includes two former Amazon employees who were among the first to experience the Amazon Go technology. They saw an opportunity to take the checkout-free shopping experience to a wider market with smart carts instead.

Microsoft and Kroger, meanwhile, have been testing a system that lets shoppers scan items with their smartphones as they shop, for a faster checkout experience.

The global market for smart shopping carts is projected to grow to more than $3 billion by 2025, from $737 million last year, according to a report by ResearchandMarkets.com.

It wouldn't be hard to imagine the Amazon Dash Cart ultimately making its way into Whole Foods Stores. It would be more of a stretch, but not entirely impossible, to conceive of Amazon licensing the technology to other retailers. It began selling its Amazon Go technology to other businesses earlier this year.

But the company isn't detailing its plans for the Dash Cart beyond the expected debut in Southern California later this year.

"We will see where this goes," Kumar said when we asked about those possibilities. "We think customers will love this experience, and then we'll just build from there."

Privacy and personalized ad targeting are two of the big questions surrounding this kind of technology. For example, if a shopper puts a can of tuna in the cart, then takes it out, will that same person later see an ad on Amazon.com suggesting a different brand of tuna? Kumar acknowledged that such targeting is possible "in theory," but said that's not the focus of the Dash Cart.

"The focus of the cart is to be able to generate accurate receipts and make sure that we save customers time," he said.

Another big question is the impact of this type of automation on jobs. On this topic, Amazon's retail automation has been a lightning rod for criticism.

The United Food and Commercial Workers International Union (UFCW) called Amazon a "clear and present danger to millions of good jobs" when the company unveiled its first Amazon Go Grocery store earlier this year. Amazon disputed that contention at the time, calling it "both incorrect and misleading to suggest that Amazon destroys jobs."

The company maintains that the smart grocery cart will not reduce the number of employees in the store, compared to traditional grocery stores of similar size. In addition to having traditional grocery checkouts, the company says it will have associates dedicated to helping customers use the Dash Carts.

Shoppers who use the Dash Carts will scan a QR code in the Amazon app to log in to the cart before they begin. The system will automatically charge them using the stored card in their Amazon account when they exit through a special "Dash Cart Lane." They'll get a receipt via email after they leave.

Similar to the Amazon Go technology, which knows if a product is replaced on the shelf, Amazon says the Dash Cart will also sense when items are taken out, removing them from the list.

In addition, the cart will integrate with Alexa Shopping Lists, showing shoppers the items they've saved to buy via Amazon's voice assistant, indicating the aisle in the store where the items are located, and letting shoppers check items off as they go.

Amazon's "Dash" brand has been used previously for products that automate e-commerce ordering, including the now discontinued Amazon Dash gadgets and its Amazon Dash replenishment service, which is embedded in household appliances and office equipment, automatically reordering detergent or ink, for example, when it senses that supplies are running low.

This story first appeared in GeekWire.

Just 140 startup deals were completed in the second quarter of 2020 in greater Los Angeles, according to the latest PitchBook-NVCA Venture Monitor released Tuesday. That is the fewest since Pitchbook and the National Venture Capital Association began tracking the data in 2014.

By comparison, there were 216 deals in the first quarter of 2020 and 210 during the second quarter of 2019. Total capital invested in the last quarter was cut in half from the frenzied first quarter of 2020, though investment was slightly ahead of the last quarter of 2019.

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If you've ever watched Shark Tank and wished that you could hop in the waters and invest alongside Mark Cuban and Mr. Wonderful, Going Public may be just the show for you.

The new series will showcase five companies preparing to go public on the NASDAQ stock exchange. Over the course of 10 episodes, viewers will follow the company founders as they promote their offering and receive feedback and advice from mentors, professional investors and other executives. Those watching at home who think they've spotted a winner will have a chance to get in on the action at the initial public offering (IPO) price for the companies that end up going public.

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