A Los Angeles-based law firm representing search engine
expert Chris McElroy filed
suit against domain registrar Network Solutions last Monday, alleging that
the company created an illegal monopoly by temporarily holding domain names
that potential customers searched for on its web site.
According to the suit, as well
as Network Solutions’ stated policies, customers searching for a .com domain
on Network Solutions’ web site would find it held “on reserve” for a period of
four days, after which it would be released back into the pool of available
names. During this time, potential customers are unable to register the domain
with a competing registrar – forcing them to pay Network Solutions’
higher-than-average registration fees or wait until the hold expires.
Network Solution calls its policy a “consumer protection
measure,” and claims it is necessary to prevent customers from losing prospective
domains to “front-runners,” who monitor domain search logs and quickly buy up
searched domain names for themselves, hoping to sell them back to their
Network Solutions’ reservation strategy, implemented
early this year, makes use of an ICANN grace period that gives
domain purchasers five days to seek a refund if they mistakenly register the
wrong domain, like in the event of a typo. Unfortunately, the refund policy
more use in the hands of profiteers and domain poachers, who “taste”
domains by buying them in bulk, sometimes
millions at a time, gauging their ability to generate advertising revenue
and then jettisoning the unprofitable ones for a refund.
Critics and industry
observers were quick
to blast Network Solutions’ “customer protection measure,” accusing the
registrar of front-running and creating a temporary monopoly for itself. One
such critic happened to no other than ICANN itself, who recently grilled
Network Solutions at a meeting in New Delhi.
In a somewhat humorous twist, McElroy also named ICANN in the
list of defendants for the lawsuit, which is seeking class action status.
McElroy, a sharp critic of ICANN’s grace period, writes the only real solution
is to eliminate the grace period and force purchasers to be mindful of what they
buy. “There is no real need for the grace period. For every one legitimate
person dropping a domain name because they changed their mind, I’m betting
there are 100,000 domain names that were ‘tasted’ by the pros,” wrote McElroy in his blog, SEO Service Provider.
“If you spend a whole $6.99 for a domain name at GoDaddy and then change your
mind, you’re out a whole $6.99. Boohoo.”
Earlier this year, Network Solutions CEO Champ Mitchell
defended his company’s policy, claiming that it only holds legitimate name
searches to prevent them from being snatched up by profiteers. “We would be
perfectly happy to end this process,” said Mitchell, “if ICANN or the
registries would do something to protect small businesses or other small users.”
ICANN is currently mulling over a plan to implement a nonrefundable
$0.25 fee in its registration process, in an effort to render the domain tasting
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quote: ICANN is currently mulling over a plan to implement a nonrefundable $0.25 fee in its registration process, in an effort to render the domain tasting process unprofitable.
quote: who “taste” domains by buying them in bulk, sometimes millions at a time, gauging their ability to generate advertising revenue and then jettisoning the unprofitable ones for a refund.