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ICANN seeking immunity from U.S. Law |
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Tuesday, 03 April 2007 |
There are a lot of things going on here and now we're hearing that ICANN may be seeking immunity from United States Law as stated in the president's strategy committee report, "explore the private international organization model" and "operationalize whatever outcomes result." As many of you may already know, there is a class action lawsuit against ICANN, Registerfly and Enom. Check out the latest developments in the lawsuit. So what's really going on here?
Registerfly - Open for business
Currently you can go to the
Registerfly.com website and attempt to register a domain name.
Comments say that you can go through the entire check-out process and purchase a domain name in any usual way. The difference is you don't actually get that domain name. Renewals haven't been going through but there have been cases where some people are managing to get out of Registerfly. ICANN has been very quiet since their threat to sue and is currently being named in a class action lawsuit that includes Registerfly and Enom as well. ICANN was finally able to get their logo off the Registerfly website but the about us page on Registerfly says this:
RegisterFly.com, inc. is an ICANN Accredited registrar. RegisterFly.com
provides industry leading 24/7 Support via a variety of methods which includes,
phone, email, ticket system. RegisterFly.com offers domain registrations as low as $2.99/ea
and domain transfers for only $6.99. By adhering to our basic principals of low
cost and value to our customers and excellent customer service we have grown to
be one of the largest low cost registrars on the web today. In terms of number
of customers and domains registered we are one of the 10th largest registrars in the
world. We are not a "one man" shop (like many domain registrars and resellers)
or a "here today gone tomorrow" business, we have invested substantially in
positioning Registerfly.com as a global industry leader.
ICANN situation
On March 5th ICANN said that domain names will not be allowed to expire or go into redemption. Read Kevin Murphy's article here. So far from reports we're hearing, this isn't exactly happening. It's no wonder this Non-Profit Organization wants immunity from United States Law. On March 8th ICANN makes yet another notice (pdf) to file suit against Registerfly and we've yet to hear what the outcome of this was. So what's happening with your domain names and now what's happening with ICANN? There was an ICANN Board meeting on Friday 31 March 2007 about Registerfly and how they intend on handling it.
ICANN and domain names are interesting indeed
First of all, ICANN is a very powerful Non-profit organization. When you start to look at the domain name industry, ICANN controls a great majority of the entire industry. With an organization in full control of the domain registries, they control the very backbone which makes internet communication possible. If you lose a domain name somehow you could very well lose your business and or your clients. It's looking as though ICANN has been focused more on making money than anything else. Near the end of ICANN's 2006-2007 budget proposal they stated near the bottom,
ICANN believes significantly more revenue should be generated from the ccTLDs than has been realized in the past. This goal reflects a 50% increase in revenue beyond the previous year. Additional revenue will be based on successfully communicating the real value provided by ICANN services. ICANN has retained staff whose central purpose will be to communicate and execute agreements with ccTLDs in order to stabilize relationships and revenue across this global community.
Secondly, based on the history of ICANN, it seems as though they've always been seeking out more and more money. If this is in fact a non profit organization, then where does all this money go? According to the budget proposal, ICANN brings in a lot of money and this has steadily grown since the day ICANN was crying broke. Since they've allowed Registrars to test drive domains, registrations have gone through the roof as more and more Registrars are in the business of cybersqautting themselves by buying up expired domain names and testing the traffic on them to see if they are worth buying.
Domain Tasting
Test driving domains is also know in the industry as Domain Tasting. While there may be approximately 803 ICANN Accredited Registrars, it's been said by an insider that there are several companies that own 100+ domain accredited Registrars. It was reported that Enom owns a hundred or so and that Domain Sponsor was another big player in this field. Why would you want to own so many Registrars?
In 2003 ICANN added an Add Grace Period (AGP) of 5 days for registrants that purchased domain names can easily delete the name within five days and receive a full refund. This was intended to cover for errors made by the Registrar on behalf of the customers. So ICANN Accredited Registrars found a way to exploit this, they create scripts that register expiring domains and measure the traffic of each domain for the purpose of revenue generation. While at first Verisign wasn't real keen on the idea until domain sales grew in great numbers mainly due to Registrars and domainers buying up these domain names. This not only creates increased revenue streams for the Registries but also feeds the hungry lion, ICANN. So registrars have more of an interest in creating multiple long term revenue streams in traffic monetization than they do in taking care of customers.
Looking in from the outside
I am a nobody in the domain name industry but as I've been looking more and more into domain names I'm getting a better understanding of what's happening I am able to form an opinion about it. Based on what I'm seeing, ICANN has always been more concerned with generating income then protecting the rights of domain owners and the future growth of the domain name industry. With ICANN allowing what's called domain tasting, Registrars are taking advantage of this practice and creating wealth for everyone involved. Meanwhile the average joe like you and I that want to purchase a domain name find it's tied up and parked with a price tag on it.
Now my speculation on the practice of one company owning multiple ICANN accredited registrars could possibly be further abuse of this exploit in the in the ICANN policy because technically the 5 day grace period could in fact be transferred from one registrar to another buying time and establishing more accurate and long term data on a domain name to see if it's going to pay for itself. They do this by parking your domain name on a parking page. You see, if a domain name gets enough traffic to generate $6.00 per year in ppc income, it's a good investment to purchase it. Not only will it not cost you money but it will provide a long term revenue stream much greater than your customers can provide purchasing domain names from you. Most of these domains they keep average much more than $6.00 a year so you can see that it's just a numbers game. Who cares what the domain is as long as it's getting traffic.
They say that out of every 200 registrations, only 1 domain name is
kept. So if you can sweep up 10,000 domain names a day and keep 50 of
them that all produce revenue, why wouldn't you start abusing the ICANN
way? Since it's paying ICANN why do they care?
While there are a lot of unknowns in this industry, we do know that there is a lot of money in it. ICANN being the controller of the policies, the domain names and the IP addresses happens to hold the key (that the Department of Homeland Security wants back), to income streams that most of us haven been unaware of. While the tasting has been going on for a couple of years now, ICANN and the registries are making more money with domain tasting allowed.
It makes me wonder how deep the Federal Government has looked into the amount of money flowing through the ICANN organization and where it's being spent. It wouldn't surprise me if the U.S. Government decided to really look into this further. Not only has ICANN embarrassed themselves but they've also embarrassed the United States Government and it's very likely that there is a lot more money changing hands than is made public and this should probably be looked into by someone in the White House before this becomes a serious International problem.
Points to ponder
- Are Registrars really interested in taking care of customer domain names or are they more interested getting you as a customer so they can taste your domain when it expires or extort additional monies from their customers?
- Why would you want to own 100+ ICANN Accredited registrars instead of building the reputation of one? Could there be some loophole that allows the registrar to abuse the already screwed up ICANN policies but since it directly benefits ICANN they keep it tucked under the sheets?
- What do you think of ICANN wanting immunity from the law?
- When a problem occurs such as the Registerfly Debacle, who can you turn to? Who or what controls the safety and security of owning intellectual properties as domain names?
Feel free to leave your comments here and if you'd like to discuss these and more topics, please visit our forums.
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