This is a guest post by Michael Mann, who is responsible for this content.
Michael started and later sold, BuyDomains.com, and was a pioneer in the domain industry. Michael more recently started a charitable organization GrassRoots.org whose banners frequent appear across networks of parked pages:
“”””In this case the illegal hoarding of domains by registrars, started by NSI, in cahoots with SnapNames and now NameJet who won monopolistice contracts from the hoarding monopoly, has been going on for some time.
Register.com was quick to catch on too.
Its incredibly illegal and against the interests of domain consumers. Whether the name is a good name and sold or auctioned is irrelevant. The registrars have a conflict and are happy when a good name of their customers is not re-registered. They can establish no legal rights at all to the domain, can only steal and hoard it.
It becomes “uninvented” once unpaid and if legally deleted, its up to the next registrant in line to “re-invent” and re-register an unlimited number of variations and just register the ones they want.
Moreover they don’t have the skills to create value in the names anyhow, they have no idea what their values are or how to monetize them, and count on value added speculators to subsidize their illegal activities.
Suffice to say that NSI, RCOM, Tucows and ICANN are totally full of crap and in cahoots working on this scam.
They are an unregulated mob conspiring to work against the interests of domain consumers and all domain registrants and people who care about fairness should fight.
You can also read this on topic
However the WLS proposed by Verisign several years ago is also unfair. I wrote about this extensively years ago when the proposal was introduced and I repeat that I made then about the WLS:
“”””””Right now a person invents and registers a domain and must pay a yearly fee to a registrar (that registrar is supposed to have the right to compete). The registrar then has to pay their competitor (the registry Verisign monopoly) as agreed to by ICANN and the Dept of Commerce. This would be fair so far if there was not a monopoly on the back end Registry. Each registrar does in fact get to play in this scenario. Now if the registrant chooses not to renew their domain after it expires the name ceases to exist by default, since it’s not legal if unpaid.
THERE IS NO SCENARIO WHEREIN THE GOVERNMENT EVER CONTEMPLATED VERISIGN OWNING OR CONTROLLING THIS DOMAIN INVENTED BY A COMMON CONSUMER, ONCE EXPIRED, AS THE WLS ATTEMPTS.
Once it ceases to exist, according to the years long practice of being deleted, it is then available to be “re-invented” and re-registered. Any registrar is supposed to have the right to register any domain that is not currently owned by someone else including all the ones that once existed.
There is absolutely no excuse for the name to revert to Verisign for them to resell to the market at massively inflated rates – and obviously it breaches current government agreements for it to be over in any case.
The current drop system is very fair.
Every ICANN registrar gets the exact same number of connections and has an equal chance of getting a name for any of their customers who request the purchase. There are ample resources, funds, and profits at Verisign to support the existing structure. As proposed, the current systems will still exist in parallel with the WLS, and the vast majority of names would be purchased at the former since they are less expensive. In justifying the WLS, Verisign has claimed they seek to cut the costs of the Registry systems. Are they now saying running two systems in parallel will be less expensive than one? If it is less expensive then why an increase in prices?
They already appear inept at running the current system even with about 0 Million a year in Registry revenue, most of which is likely profits. Should they now get to take another market without the explicit approval of the Commerce Department, who originally only authorized a fee and thereby attempted to control the monopoly?
Did Verisign offer to let another company control the WLS in the name of the \”fairness\” they pretend to be concerned with? Why should Verisign be the monopolist of the WLS as opposed to a competitor?
Also the Verisign Registrar is the current registrar of record for the vast majority of names being deleted due to the 20 Million plus legacy domains inherited from their former NSI monopoly. They control and are the only ones who know when these 20 million domains are going to be deleted (if ever) and therefore have an unfair advantage in selling WLS subscriptions via their Registrar (the other side of their hollow Chinese wall).
Illegally Selling Options Contracts:
Also disturbing is that the WLS ultimately proposes selling an option on someone else’s property.
There is oftentimes no service even performed, if the name is renewed by its owner.
I imagine Verisign will get sued by many companies who didn’t appreciate their property being auctioned off while they were still a domain customer in paid status and in good standing.
All the while Verisign proposes to take money on any given domain three or more times plus all the yearly renewals, once from the current registrant; and a second payment of from whoever gets on the “waiting list” through their registrar of choice; and actually a third time if the target domain is deleted via the WLS process and turns in to a new registration that would be yet another $6.86 for their Registry and another -$35 if it’s the Verisign Registar’s customer. Then the cycle can repeat itself endlessly if someone else places a WLS subscription.
I firmly believe that the government, ICANN, competitors, and consumers must be assertive in preventing this illegitimate service from ever reaching market before further harm is done to domain consumers.””
My position on domain hoarding by registrars is well know so I will not go through that again, however I agree that no registrar should be able to retain a customers domain for their own account.
The drop landscape has completely changed since the WLS was first proposed.
Today almost all domains are not “dropped” at all but funneled to either NameJet or Snapname by contract.
So the fairness that used to be present giving all registrars and equal shot at the domains is gone.
Therefore vew few good domains are released and re-registered but rather grabbed by one of the 2 source and auctioned off at hundred, thousands and tens of thousands of dollars each.
I think the concept of the WLS needs to be re-visited to stop the abuses we see in the marketplace although I respect your opinion regarding who should run and benefit from the fees collected.
As far as a domain holder suing verisign for selling what you call a futures contract, I don’t know what damages a domain holder suffers from the sale of the contract that they would be compensated for.
Clearly the status quo is not going to work in this situation for me and I will push for a change.
Thanks for the input and I urge all readers to checkout and support GrassRoots.Org.
Finally for all those who vote for such things, when TRAFFIC takes nominations for the Domain Hall of Fame next year, you should all consider voting for Mike, who should have been inducted in the first 5 members.
This a great post from Mike Mann!
I also totally disagree with what companies such as TuCows and many others are doing!
We as domainers should stand up againest them and ensure that none of us register domains with them and instantly remove all our current domains away from them to more domainer friendly registration companies.
I for one would be happy to start a campaign againest this and show them that us domainers wont stand for these actions.
Also Grassroots.org is a great organisation and everyone in the industry should show there support!
Also Mike has written a book which is available to read from his website – MikeMann.com where you can download this for FREE!
Michael Mann is a TRUE Leader with Integrity – you are 100% spot on.
Unfortunately, this will have to be settled in court.
Lawyers – Judges – Politicians & Money.
It is the only way the practice will ever be stopped.
What a great and strongly-worded post!
Digg it here – posted to digg industry news, although the domain industry tends to get ignored on that site
One thing that gets me about all these auction houses, especially Name Jet (coz they do it best 🙂
I’m in the EU, and there are data protection offices in each state.
It’s a big no-no for corporates to slip on your data protection.
Now take the expiring names “markets” run by the registrars.
I see a name I like. I do the hard work. Perhaps I’ve been tracking it.
I bid on the name.
That’s my info; my data.
Name Jet et al then take this date – and tell eveyone else about it!
I think the sytem would be a lot fairer if this data was not shared.
The auction would not be near as hectic.
As it is, you can just stroll along to NameJet, coffee in one hand (skinny of course), muffin in the other – and spend a leaisurely hour perusing the names – other people’s data – and then joining if you feel like it.
I dont know, is there no date protection office Stateside, and if so, anyone have the url??
domainer111 – it is an auction, that’s how they work.
Hi Phil, sure it’s an auction – but they could also run the auctions without sharing/publicising the bids/private data amongst other users.
You say “that’s how they work”, but not necassarily.
Let me just clarify exactly what i mean by bid. I am not referring to bids once the auction is underway; I am referring to the first initial bid.
Here are the facts.
NameJet publish the daily lists in the downloads section. There are thousands of names in these lists.
Every day, people pour over these lists looking for good domains. This would take a few hours or so.
They then bid on the names.
Now – if you look at the “Browse Domains” section at NameJet, you see the top names that people are bidding on.
This includes names with just one solitary bid of $69.
So why bother pouring over the lists, when some sucker will do the work for you? Grab that latte, grab a muffin, and spend a very pleasant hour musing over those five little pages (remember when you used to stay up all night working on lists??? *gosh*).
My point is it’s *this* initial bid that should be protected, and not made public.
*This* is the private date to which I am referring, not the bids once an auction is underway.
Stephen Douglas says
Let me play “Devil’s Advocate” for the sake of argument. I’ve had extensive experience in all aspects of this “problem” of registrars nabbing expired domains of their customers and reselling them for profit. (For more inside details, see my latest blog post called “Are Registrars Unfairly Stealing Domain Drops?”)
Sorry Mike for the divert, I’ll give you linkbacks within my article and credit your blog. And I owe you one.
Patricia Kaehler (DomainBELL) says
Interesting information to consider…
Thank you for sharing…
Joe Bloniarz says
Registrars shouldn’t be allowed to hoard domains, and should be required not to own them after their deletion date.
A bit of history:
First their was WLS 1.0 than after much flack from the registrars verisign and snapnames had to redesign the original process flow.
WLS 2.0, this is the version that was actually approved by ICANN ( I’m not a fan of how ICANN has handled the secondary market of expired domains ) This would have made verisign and snapnames a mind boggling amount of money!
While Verisign was trying to push wls 2.0 through Pool came onto the scene which made both snapnames and verisign take note of how much people were willing to pay for some domains. At this time you could backorder a domain at snapnames and if you created your backorder first the domain was yours no auction!
CLS was born partially POOL came onto the scene with their auction platform to compete with snapnames.com, so verisign redesigned WLS and created CLS which allows all registrars to participate in a domain auction on the behalf of their customers.
So to recap we once long ago had backorders, than WLS was proposed and everyone cried wolf, than WLS was revised and actually approved by ICANN but never implemented. Than came CLS which allows registrars to compete for all dropping domains that registrars delete.
Problem now in our industry the registrars are hording domains, ICANN won’t do a damn thing about it.
We need something like CLS where all registrars can compete for domains on the behalf of their customers. And ICANN should force registrars to delete their domains.
The money earned from the CLS should be split between the registrars and registry with the original owner of the domain getting 80% of the money. If the original owner of the domain can’t be located that money goes to charity.
Instead of looking for domains with the bidders on it you can try a service like tools4domains.com that finds the best dropping domains, you can often find quality domains no-one has ordered
Marc Kaufman says
I lost 2 valuable domains when Network Solutions failed to auto-renew my domains.
I spoke with my bank, and they said that NSI. made
no attempt to draw funds from my account on the dates they had claimed to attempt to draw funds.
Two other domains with another registrar had no problem renewing around the same date. There were more than adequate funds to cover the renewal in the account.
I lost GreenRetail.com and GreenRetailing.com.
I still own GreenRetailer.com
I have not found an attorney who is willing to take the case. Is there enough proof of wrong doing, that the possibility exists for a Class Action?
I hope someone helps you on this.
However, I bet in the terms and conditions of NSI they say they are not responsible for failure to renew a domain set for auto-renew for any reason and its up to the domain holder to verify that the domain has been renewed.
Sucks, but I bet its in there.
Stephen Douglas says
That really sucks. I know from my own domain purchases that any domain with the word “Green” and a good noun behind it is very valuable. I think maybe Netsol knows this too?
I’d followup on mike’s suggestion to read the TOS at Netsol. Even if there is a term in the TOS that states they’re not responsible for autorenew losses, that still may not limit them on liability for “expectation of performance”. I’m no lawyer, but I’d be very mad to lose those domains. I recommend domain attorney Stephen Sturgeon to look into it for you. I think you’re looking at domains worth at least $20k currently, and probably double/triple that by 2010.
I’d also check my whois emails to see what “expiring notices” were sent to you, and how many. What notifications did you receive from Netsol? I’d also call their customer support and try to move your complaint up the ladder.
I checked the whois for your domains and the expiration date was a whopping five months ago. What took you so long to discover this?
Looks like some hard work ahead for you, but those domains are worth it (for those of you who don’t believe it, try to register a two word domain name with one of the words being “green”).
Joe Bloniarz says
I just checked my website’s database that drives tools4domains and I don’t see that greenretail.com was not ever up for auction at namejet.com.
I can’t speak to the domain greenretailing.com as it would be a domain I would track.
I hope that helps some