According to Thomas Narten, IETF Liaison to the ICANN Board, writing on the At Large mailing list, last week's resolution on domain tasting wasn't a statement of new policy or a directive to staff, it was something more like a trial balloon for discussion.



If his interpretation is correct -- and you should read it yourself here  -- ICANN won't impose the fee unless the ICANN community supports it and, even then, it won't go into effect until the next budget cycle, starting on 1 July 2008.

At its most recent Board meeting, the ICANN Board passed a new resolution that will impose ICANN's per name fee on all new registrations, regardless of whether they are deleted in five days. This ought to stop domain kiting dead in its tracks. Why? It changes the economics of tasting. Four-day names now come with the same ICANN fee as 365-day names.

The resolution does not say when it will take effect, but you can imagine it will be soon.

Here's the text of the resolution:


At the latest, I would expect ICANN to begin applying its transaction fee to temporary names at the start of the next budget cycle (July 1, 2008), but I can see it starting earlier than that too, possibly in the days following the upcoming New Delhi meeting.

P.S. Any idea why Bruce Tonkin felt he had to abstain? What was the conflict? Was Melbourne IT in the tasting business?

Based on comments received on last week's blog article about domain tasting/kiting, I did some research over the weekend and found some very interesting facts about the practice in a publicly filed pleading in Florida. The case is Dell v. BelgiumDomains, between Dell Computer Corporation and a number of domain name registrars that allegedly kite domains. "Kiting" is serially registering and then deleting domain names within the ICANN five-day grace period, so the company registering the name gets the benefit of the domain registration without incurring any registration costs. The Complaint is here. Exhibits 1-5 to the Complaint are here. Exhibits 6-10 are here. Exhibit 4 is a sample list of the kited domains, and it reads like a list of corporate america typosquatted. (The entire list was too voluminous to file as a paper document, but was filed as a CD-ROM.)

In its opposition to a motion, BelgiumDomains and the other Registrar Defendants described their business practices:


Emphasis added. Yes, that's right, these registrars are registering and deleting "millions" of domain names "every day."

The Declaration of Ezequiel Guilleron, the CTO who manages these servers, repeats the same facts:


Now stay tuned for the real kicker.

Dell obtained a preliminary injunction against the Registrar Defendants, the companies responsible for the domain kiting/trademark infringement scheme, and were able to attach the revenue that those defendants receive each month....from Google.

How much do they receive from Google Adsense?

The numbers in a Stipulated Order (see Paragraph 8) are in ranges. Amazing ranges. The first $1,000,000 the defendants receive from Google each month is to be paid into a special escrow fund to be held for Dell's benefit should it win at trial. The second $1,000,000 received each month is to be paid back to the defendants. Everything over $2,000,000 each month is split 50/50 between the escrow fund and the defendants.

Google has been paying out millions to just this handful of domain players. Across all the domain kiters, what is the number?...tens of millions? ...hundreds of millions? ....each month? And after you've digested the financial numbers, look back again at Exhibit 4, the list of the domain names that Google was paying out these Adsense dollars on.

A real eye-opener.

In an email over the weekend, Jay Westerdal said that my view of tasting is out-of-date and that, in 2008, the majority of tasting is from those who don't want to pay any registration fee. I take seriously anything he says, expecially on domain markets, so I'll be interested to read follow-ups to his post last week.

Something else to consider: on the At Large mailing list, Bill Silverstein writes: "Even if Google will not accept domain names that have been registered for less than 5 or even 10 days, it does not matter. It is very simple on a new domain name to redirect the surfer to a a domain name that has been approved by Google for Adsense." Good point!

Sparked by Jay's suggestion that I got last week's post wrong, I've been doing some digging. I think I'll have some interesting stuff to post tomorrow. Stay tuned.

Yesterday Jay Westerdal wrote that Google was planning to kill domain tasting by cutting off any ads flowing to domains registered less than five days. TechCrunch picked up the article and commented here. Call me deeply skeptical. Google cutting off the ad revenue from tasting won't change anything because it doesn't address the underlying reason people taste domains in the first place. Few people taste domains for the incidental revenue earned during the taste period. You taste a domain name to see if it has traffic. If it has enough traffic to justify a $6.50 registration, you register it. If you're uncertain about the traffic, you might taste the name again and again to get a larger sample size. If the name doesn't have traffic, you let it drop. Domainers may monetize their temporary registrations as a way to gain some extra revenue, but that extra revenue is just a nice bonus; it's not the primary reason anyone tastes a name.

Jay Westerdal says that Network Solutions has "started making improvements to the forward reservation service." Details here.

On Friday, ICANN posted a discussion document about dispute resolution between the ICANN community and the ICANN Board. It's a short but heady piece that you really ought to read and consider. Here's a provocative sentence from the paper to get you reading: "There may be circumstances where it is appropriate for the ICANN community to be able to move for an extraordinary dissolution of the Board and its consequent reconstitution." Wow.

Who knows what the triggering event might be, but the trigger could be pulled by super-majority votes from all of the Supporting Organizations and Advisory Councils.

The schedule for Domainfest Hollywood is up. I'll be speaking at the lunch session on Wednesday, January 23rd on "Domainer Worst Practices." It's a subject I know well.

Computerworld and eWeek are both reporting that ICANN is investigating the Network Solutions front-running scheme.

Meanwhile, on the GNSO's General Assembly list, Network Solution's Jonathan Nevett reports:

It's a start.

ICANN has published its proposed agreement with ISC for management of the F Root Server. Thanks!

In a nutshell, Network Solutions is preventing consumers from shopping on price.

Try this yourself. Go to http://www.networksolutions.com. Do you see the price of a one-year registration anywhere? (No. All you see are some prices for package deals and hosting contracts.) Enter a name you know doesn't exist into the lookup box, and see how many pages of upsells you have to wade through before you get to the price. (I counted five.) On the fifth page, assuming you haven't purchased any upsells along the way, the check out cart finally shows you the cost of a five-year registration for $99.95. Change that default selection to one year, and you see the price is $34.99.

Too much? Yes, I agree. (In fact, I would have gone to another registrar one or two pages into that awful customer experience.)

So now let's jump over to a registrar with a better price. You can pretty much pick any registrar in the world, as NSI is at the top rung of the price ladder.

The name you want isn't available. It's now exclusively available through NSI at that wonderful price of $34.99/year.

As soon as the lookup occurred on the Network Solutions website, NSI reserved the name under its own registration. They hadn't told you the price before you looked it up, but now you can only get the name you wanted from NSI at the above-market price set by NSI.

Don't accept the line about this being a new service for the protection of consumers. This service is meant to capture consumers who are shopping around.

So if you start from the premise that NSI has described a real problem, in which registrar queries to the registry are sniffed and sold by the registries themselves, is there a better way to solve the problem than with what NSI has done? I think so.

To stop the sniffing, you'd do the first availability lookup in your own walled garden. I expect many registrars already are getting daily dumps of the TLD zone files. You'd simply take the zone file data, which is always less than 24 hours old, and do your first lookup against your own database. This is going to give you an answer on the name's availability that is 99.9% accurate. This ensures that no queries are passed to the registry. When you have the result, tell the registrant that the name is likely available and that you'll do one final lookup after the credit card information is submitted. Then, simply go to the registry when you're sure the customer is ready to purchase the name. Seems simple enough. What am I missing?

ADD: Here's an even better mousetrap, courtesy of John Levine, writing on the At Large mailing list: "I entirely agree that NSI's four-day hold is anticompetitive, particularly in view of their above-market prices. But what if they held it for four minutes? I still think that the world would be better with no AGP at all, but it seems one could make a plausible argument for holding a domain for the length of time it takes to run a shopping cart through a checkout."

All the news of the day continues to be about NSI's front running-domain tasting service. Yesterday, I said the explanation didn't hold water. A second explanation from NSI (on the GNSO's General Assembly mailing list) starts to sound more reasonable. NSI claims that gTLD registries ("or ISPs") are selling registrar lookup data to third-party domain tasters, who then taste a domain before the customer can register it. If true, that's a real concern that needs to be addressed. I'm not sure NSI has hit on the right solution because this "solution" has the potential to cause just as much consumer confusion as the practice the company is trying to prevent.

If a registry leak is causing front-running, however, it's a hole that needs to be patched, preferably by ICANN.

I was really surprised by the news today that Network Solutions has launched a new "service" that combines front-running with domain tasting. Since separating from Verisign, I had the distinct impression that the new management team was trying hard to separate the Network Solutions brand from some of the company's past evil practices. As noted by ICANNWatch, Network Solutions says the new practice "protects" consumers, but the explanation makes no sense. The only protection runs to Network Solutions, which has an exclusive on any name looked up through its web site for a four day period. It's a clever exploit of the add grace period, but a step backward in the effort to rehabilitate the NSI brand.