If ICANN only charges 18¢ per domain name, why am I paying $10? (2014)

I operate a registrar, I'll outline a couple pieces of the puzzle here and the justification for the price. ( I couldn't read the stack exchange article - redirect issue)

First its recognized these are digital goods where the incremental price is very nearly approaching 0. Technical aspects of domain registration have very little to do with the price.

That said ICANN has various requirements for registrars and registries that do require more than just keeping an entry in a database. For registries, you have to not only have a hot failover data center location for your registry but you are contractually obligated to test it (I believe every 6 mos. but its not my part of the industry). For registrars you have to escrow your entire domain settings both incrementally and fully (daily and weekly) for all domains, this way if you disappeared as a business tomorrow they could recover everything. This is audited regularly and swift action is taken for those who are delinquent.

Those are the technical issues, the rest of the cost is highly related to the administrative burden of domain management.

Some of these are:

  DMCA takedown requests

  Generic legal requests

  UDRP Claims

  Governmental abuse claims

  NGO abuse claims (i.e. other hosting firms etc)

  WHOIS verification claims

We get these kinds of requests on a very regular basis (ie hourly/daily), it takes a team of people to manage them and its a never ending torrent. Some of them can be disposed of quickly others take a lot of time.

There is also a huge amount of what I'd term "misguided requests". For example:

A company who makes a ICANN complaint because after the UDRP ruling saying they won a domain and access to the domain was provided, they failed to renew it, let it expire and another company got the domain. This happened and turned out as you would think. This still took 1 person a week of investigation and back and forth to dispose of.

Complaint that a domain registrant did not receive expiration notices when in fact there is no history that they'd ever been a registrant of the domain.

People who file false WHOIS complaints with ICANN because they don't like the domains owner, whois complaints MUST be verified or the domain is taken offline. These complaints create a huge burden.

All of these requests have rules about procedure, deadlines that must be complied to and a form of investigation that must be adhered to.

While many domains are nice and quiet and don't need much attention. The legal, abuse and governmental drivers that run the modern internet create a ton of overhead for registrars. That overhead is manifested in your fees.

This is only about normal fees. Premium domains are strictly market driven and the "scarcity" of a domain/tld is highly subjective. Costs are less about overhead and more about what the market bears.

Hope this has been insightful for anyone who read this far!

While I am sure the load is high, everytime you look up a .com you are not connecting to Verisign Server.

DNS does not work that way, Major DNS companies like RackSpace and AWS's Route 53 I suspect have higher load DNS than the Root Registries, and they offer the service for free...

Domains used to cost $100 a year. I don't see any reason to complain (although before they cost $100 they were free).

1) Wealthy people/corporations would love this plan. $100 is nothing for Godaddy to sit on? Your plan would just make it easier for big entities to buy/hoard good domains.

2) The one thing I feel should be changed is a registrar should not be able to buy a expired domain. Greatname.expired goes unpaid. Godaddy should not have first right to buy the domain.

3) I would like to see the number of domains go up in price exponentially. First one $5. Second one $500. Third one $5000. (And this would probally not work out in the end for numerious reasons. The only good thing about our current system is little guys can sometimes snatch a good domain name, usually by luck. I would like to try a lottery system?)

The best way to eliminate domain squatting is to make domains non-transferrable. If you own a domain you shouldn't be able to transfer it to anyone. The only way to "transfer" a domain should be to return it to the domain registry where it may be purchased by any interested party at market price determined by auction.

However this probably isn't going to change.