ICANN: A Taste Will Cost You

ICANN just approved a resolution that might just help to curb the practice of “Domain Tasting” where registrars or third parties register a domain that has just been searched for and use the five day Add Grace period to see if they can make money from the domain. The resolution will add a small non-refundable fee to register the domain, even if it is deleted before five days. I first wrote about this when I called it domain hijacking back in 2006, and Adam Viener just wrote about the Frontrunning scandal at Network Solutions two weeks ago.

Previously, registrars could use this five day grace period to register a domain and then delete it at the end with no charge and no risk. Network Solutions did this to lock in a customer who used them to search for a domain with much public outcry. Other nefarious individuals did the same thing, but they wanted to profit from the domains. They would taste the domain to see if they thought they could make money from it or see if the original searcher would come back and buy the domain from them. With no risk, it was a pretty simple decision for anyone who had the means to just grab as many domains as the could and then delete the ones that didn’t fit their goals just before the grace period expired. I have seen some data that showed that some 90% of domains initially registered were deleted within five days.

The ICANN fee is presently $0.20, and looks like it will be raised to $0.25. For the few people who may actually register a domain by mistake (the original intent of the Add Grace period), this will barely be a blip if the registrars eat the fee. But, the practice of tasting a domain will get expensive for those who might want to check out thousands (or millions) of domains.

Here is the text of the resolution ICANN just passed at their January meeting:

Whereas, the current version of all gTLD registry contracts provides for a five-calendar-day Add Grace period (AGP) following the initial registration of a domain during which a domain may be deleted and the sponsoring Registrar will be credited for the amount of the registration fee (see, e.g., http://www.icann.org/tlds/agreements/verisign/appendix-07-01mar06.htm);

Whereas, the AGP was originally created to allow domain names that had been accidentally registered to be cancelled;Whereas, the practice of “domain tasting,” by which names are registered and then deleted during the AGP, has grown at a very great rate since 2005, with tens of millions of domains registered and deleted each month; Whereas, it is apparent that the AGP is being used for purposes for which it was not intended; Whereas, abuse of the AGP is, in the opinion of the majority of respondents whose statements were collected by the GNSO Ad Hoc Group on Domain Name Tasting (4 October 2007 report), producing disadvantages in the form of consumer confusion and potential fraud that outweigh the benefits of the AGP; Whereas, the GNSO Council on 31 October 2007 resolved to launch a PDP on Domain Tasting and to encourage staff to apply ICANN’s fee collections to names registered and subsequently de-registered during the AGP; Whereas, it is the Board’s view that abuses of the AGP should speedily be
halted, while the positive benefits of the AGP to consumers should be retained; Whereas, the positive benefits of the AGP may include, among other things, avoiding fraud and monitoring, testing and development of registrars’ provisioning, production and/or merchant gateway systems; Whereas, the Board believes that the withdrawal of ICANN’s waiver of ICANN’s non-refundable transaction fee to the deletion of names within the AGP will substantially end the practice of abusing the AGP;

THEREFORE, the Board resolves (2008.01.04) to encourage ICANN’s budgetary process to include fees for all domains added, including domains added during the AGP,
and encourages community discussion involved in developing the ICANN budget,
subject to both Board approval and registrar approval of this fee.

A voice vote was taken of all Board Members present and the motion was approved by a vote of 13-0. Bruce Tonkin abstained from voting on this item.

About Brad Waller

Some say Brad created the first affiliate program. We’ll never know for sure, but we do know that Brad has been running businesses online since 1994 and affiliate programs since 1996. When he is not running the affiliate program for EPage Classifieds, helping publishers monetize their sites with AdJungle, or working on iPhone applications, Brad is also busy starting up the Performance Marketing Alliance, a trade association created to represent and build the entire performance based industry.

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