Last week’s blog post was not the first time Verisign called attention to domain investors.

Last week Verisign (NASDAQ: VRSN)shocked many of its biggest customers by saying that domain investors are a problem.

It turns out that this was not the first time Verisign raised arguments about the domain aftermarket. It drew attention to the U.S. Senate back in July while it was still negotiating with the U.S. government to renew the Cooperative Agreement.

Verisign made the argument in response to GoDaddy VP of Policy James Bladel’s testimony (pdf) in a U.S. Senate hearing on July 31.

In that hearing, Bladel urged the government to keep the status quo on the wholesale price that Verisign charges registrars. It also argued that the contract to operate .com should eventually be put out to competitive bid.

Verisign SVP Pat Kane sent a letter to the committee chairman, Senator Roger Wicker, and ranking member Brian Schatz pointing out that GoDaddy sells many domains in the aftermarket for thousands of times the wholesale price. It lists some domains for sale on GoDaddy’s Afternic system, including domains with the names of senators (owned by third parties).

Kane’s letter (pdf) was entered into the record toward the end of the hearing and I obtained it today from Senator Wicker’s office.

There’s a big difference between the July letter and last week’s blog post. The letter merely made an argument that the market sets the price for domains and it could be much higher than the wholesale price. The blog post escalated this by saying that domain investors are a problem.

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