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Complaints of domain name hostage-taking bring change

Pat Patera

The co-founder of the Reno networking group Beyond Business for Women learned the hard way about Web site domain name scams. The antics by domain-name pirates cost real companies real money, warns Jen August.

Her complaint and complaints from like-minded Web entrepreneurs led to changes in the way that Web addresses are doled out.

August used the domain-name registration site GoDaddy to see whether the Web site name she wanted beyondbusinessforwomen was available. It was. But before she could complete the online process and pay a $9 fee, she was called away by a phone call.

A day later, August says, she learned someone else had purchased the name, and she learned Web scamsters routinely search registries that track names people search for, buy them and resell them.

“If you have your idea, buy it,” says August, who spent a month chasing the kidnapped name and negotiating its release through a Web site that buys and sells names. She ultimately paid $200 for beyondbusinessforwomen.

The practice of snatching domain names thrives because registration rules hold that anyone can hold a name for five days (ostensibly to test its pulling power) then release it with no cash outlay if it’s not wanted.

But that rule also opened the door for domain-tasting companies to buy thousands of names and hold them hostage for those five days.

Because she planned to debut her new Web site at an eWomen Network event, August couldn’t wait around to see if the tasters might eventually dump her desired domain name.

Still, at $200, August might have gotten off cheap. Premium domains at sites such as name.com and domainsponsor.com charge as much as hundreds of thousands of dollars for desirable names.

The entity responsible for managing the assignment of domain names and addresses is ICANN Internet Corporation for Assigned Names and Numbers created in 1998 to oversee some Internet-related tasks previously performed by the U.S. government.

Some companies exploited a loophole in ICANN’s domain name registration process. Under the five-day policy gap, tasters could take unlimited registration of names without penalty for returns. Their objective is “monetization” resale of the names at inflated prices.

The Coalition Against Domain Name Abuse says that 2 million names were tasted every day. ICANN says the problem grew so vast that in January 2007 the top 10 domain tasters accounted for 95 percent over 45 million of all deleted or returned domain names.

Widespread complaints, such of those of August in Reno, prompted ICANN to put a lid on tasting, says Jason Keenan, media adviser. Effective last month, it limited the five-day grace period refunds to 50 domain names a month or 10 percent of new registrations by one registrar per month, whichever is greater.

Initially, the rule will be in effect for one year.