In an active beginning to 2008 on the domain name front, Network Solutions created an uproar in the domain name community when it began a practice that it claimed was a customer protection measure, but many in the industry considered to be "front running" by the registrar. Front running occurs when one conducts a domain name availability search but does not immediately register the domain name, and the domain name is then registered by somebody else within minutes or hours after the search. Front runners get access to search terms through registries, Spyware, or through ISPs. They then attempt to make money through pay-per-click ads, or by reselling the domain name at a higher price.
Network Solutions has admitted that it "reserves" domain names that have been searched for availability through its homepage and not immediately purchased. Network Solutions then holds the reserved domains during the 5-day grace period for payment, while precluding the availability of the domain name through other registrars, including lower-priced registrars. The name is not placed on reserve for the particular searcher, and is available for anyone to register. If the domain name is not registered during the 5-day period, it is then released back to availability through any registrar. The concern is that any company conducting an availability search relating to a new trademark or desired domain name may be vulnerable if it uses Network Solutions to check availability and does not immediately register the name.
Front running and domain name tasting have become pervasive in the domain name industry. Domain name tasting is when a domain name is registered and the attendant website is populated with pay-per-click advertising. If the site does not generate enough revenue during the 5-day Add Grace Period (AGP), the domain name is deleted without any payment. Registrars who provide bulk registrations for registrants whose business model is based on tasting, have deleted as many as 95.5% of the domains within the AGP. Tens of millions of domains are registered and deleted each month through tasting.
In an attempt to combat the domain name registration abuses of front running and tasting, ICANN, the governing organization for domain names, has voted to make its registrar-level transaction fee of $0.20 for domain name registrations non-refundable, discontinuing the current practice of refunding the fee for "tasted" domains.
When the .ORG registry instituted a five-cent surcharge for registrars that dropped more than 90 percent of their registered domains after the AGP, the percentage of deletions dropped from more than 90 percent to less than 30 percent. The .BIZ and .INFO registries have proposed similar plans for resolving the AGP issue, but many in the industry are still waiting for VeriSign, the registry for .COM, to address these abuses.
Vol. 53, June 2010