Is $.20 enough to stop domain tasters? ICANN thinks so

A proposal by the overseer of the Internet's addressing system could make it a lot easier for people to reserve the domain name they want for their Web site.
The Internet Corporation for Assigned Names and Numbers (ICANN) is considering keeping the annual fee it charges registries for a registered domain name, even if the domain name is forfeited during the five-day Add Grace Period. ICANN currently charges US$0.20 per domain per year.

The move is intended to stop "domain tasting," a practice where thousands of domain names are purchased at a time and monitored to see which get the most traffic during the grace period, said Jason Keenan, media advisor for ICANN.

The grace period is intended to let people get a refund if they make a spelling mistake while registering a domain. But rogue registrars have been abusing the grace period by setting up thousands of Web sites stuffed with advertising links on newly registered domains.

The domain tasters then keep the ones that generate the most click-through advertising revenue and forfeit the unprofitable domains for a refund before the grace period expires. Some registrars have been known to repeatedly register and unregister domain names as the five-day grace period expires, essentially never paying for use of a domain.

Domain tasting is a problem for users since it means a domain they want to purchase may be temporarily or permanently unavailable. It also means more low-quality Web pages on the Internet that are designed only for generating advertising revenue.

The imposition of a fee would make it a lot more expensive for domain tasters, Keenan said.

"Right now you can go and register a million different names for five days and the cost is zero," Keenan said. "If this [proposal] comes through, the cost is $1 for five [domains]. It really changes the fiscal model of tasting."

A study released earlier this month by ICANN shows how bad the problem has become over the last two years. In January 2005, there were 1.7 million .com and .net domains registered. Of those, 700,000, or 41 percent, were deleted during the grace period, for a total net increase of 1 million domains.

During January 2007, 51 million domains were registered, but 48 million were deleted, or about 94 percent. "There was a net increase of 3 million names but most of the rest were just being 'tasted'," the report said.

The fee is also expected to put the brakes on another practice, known as "front running." Some ISPs and registries sell records of what domain names people have searched for, and those domains will end up being "tasted," said Susan Wade, spokeswoman for Network Solutions, a registry.

Often the tasters will try to sell those domains at inflated prices, she said. Network Solutions has tried to stop the behavior by registering a domain name for four days after someone conducts a search for one on its Web site.

Critics have decried the approach, saying that it forces customers to pay Network Solutions for a domain or face further competition when the domain goes back on the market. Wade countered that Network Solutions doesn't charge any more for the domain, and it prevents the domain from being immediately scooped up by a taster.

However, Wade said Network Solutions will stop the practice if ICANN imposes a fee.

"At that point, we believe that our customers would no longer need protection from front running," Wade said in an e-mail.

The fee proposal is contained within ICANN's 2009 fiscal budget, which will be discussed in Paris in June, Keenan said. It must be approved by ICANN's board as part of the budget.

It must also be approved by registrars that comprise two-thirds of the revenue ICANN receives from domain registrations, Keenan said. There are about 900 or so registrars for the seven generic Top Level Domains (TLDs) that have the Add Grace Period: com .net .org .info .name .pro and .biz, he said.

Registrars have been complaining to ICANN about domain tasting for some time and appear ready to support the plan. Some registrars, such as GoDaddy.com, have dissuaded tasters from using their registration services by reserving the right to charge a fee even for domains that are returned within the five-day period.

Network Solutions also deflects tasters by not issuing bulk refunds for registrations before the five-day grace period expires, Wade said.

However, most tasters end up become registrars themselves, said Warren Adelman, GoDaddy's president and chief operating officer. "We hope that we are really beginning to see the end of an era of what's been negative behavior," he said.

The only other option to stopping tasting would be to get rid of the grace period, which would hurt users, said John Levine, an author and technology consultant. The fee is the easiest route, he said.

"It will definitely stop domain tasting," Levine said. "It's clear they [tasters] have to register several hundred domains to find one that will pay off. It's pretty hard to find a hither-to-unknown domain to find $50 of revenue."