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[At-Large] ALAC COMMENT ON Domain Tasting and Monetisation and their impacts



Hi,

Here is a revised version of our comment (not resolution) on domain
name tasting and monetization - not reallyclose to final, but work in
progress, for your comments and
suggestions, in the interest of time and quality.

izumi

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ALAC COMMENT ON DOMAIN TASTING AND MONETISATION AND THEIR IMPACTS ON
THE INDIVIDUAL INTERNET USERS

Version 1.1, Mar 28

On behalf of the ordinary Internet users, the At-Large Advisory
Committee (ALAC), with the input of the worldwide community of
At-Large Structures, would like to make the following comments on
Domain Tasting and Domain Monetization. We think Domain Tasting and
Domain Monetization are two different issues, though some areas may
have some relationship, and therefore we like to discuss them
separately.

The need to articulate the issue first for Domain Tasting
We believe that Domain Tasting utilizing the existing Five-day Add
Grace Period is an abuse that results in confusion of the ordinary
Internet users worldwide and gives an unfair advantage to speculators.
However, at this point of time, we feel there still needs more
concrete information to prove these problems actually exist and are
affecting the ordinary users.

ALAC will work on drafting the formal request to ICANN staff to
prepare the Issue Report. At the same time, we like to work together
with other constituencies or groups who share the similar concern to
come to consensus positions. Upon receiving the Issue Report by the
staff, we shall make the final decision whether a formal PDP is
necessary.

Among the issues and actions we like to discuss are as follows:
With the User Constituency, business and non-commercial:
How to find the best ways to protect the interest of the end users,
including that of registrants, but also that of general users who do
not register domain names but just use domain names to communicate
each other or find useful information on Internet. How to provide
safeguards for the domain names they registered, what are the rights
of the registrants, how to minimize confusion or exploitation of the
ordinary users.

With the Registrars Constituency:
Consider implementation of a Registrars Code of Conduct that prohibits
unfair speculation and exploitation of Domain name registration
including the use of the five day Add Grace period.

With the Registry Constituency:
Consider how to avoid user confusion and unfair practices. Abolishing
the five day add grace period could be one good solution. Adding a
small fee, such as 25 cents per Domain to those registrants who keep
names using the add grace period may be one solution, but we would
need to be persuaded that this would solve the problem in order to
endorse this as a solution.

With ICANN Board:
We ask ICANN Board to consider how best to prohibit unfair
speculation, enhance consumer trust in the Domain Name registration
system in the long run. Suggested actions could be:
1. Initiating a third party study on the impact of Domain Tasting and
Domain Monetization/speculation and their impact on the ordinary
Internet user community;
2. Initiating a review of Registry – Registrar Contracts in order to
promote fair trading and restrict unfair speculation.

Background and Rationale on Domain Tasting
"Domain tasting" is the term used to describe the use of the five-day
add grace period to register domains without paying for them and find
those domains which generate certain traffic for pay-per-click
advertisements. We think these are unfair acts: somewhere between
larceny and extortion, because the registration cost is zero and the
purpose of these registrations is just to make money by taking
advantage of automated bulk registration to exploit the domain names,
which are in essence 'public goods', and not the real property of
anyone.

As many people have noted, this practice is exploiting a loophole that
shouldn't exist in the first place. There was a great deal of debate
both in the ICANN community about the deletion grace period, but none
at all about add grace which was apparently tossed into the package by
an ICANN staffer without asking anyone. So says Karl Auerbach, who was
on the board at the time, and we haven't seen anything to the contrary
from any other board member.

As Bob Parsons, CEO and Founder of Go Daddy, wrote in his blog:
Millions of good .COM domain names – on any given day over 3.5 million
and climbing — are unfairly made unavailable to small businesses and
others who would actually register and use them in ways for which the
names were intended. Many times businesses accidentally let their
domain names expire. When they go to renew them, they find they have
been snapped up – and taken away with a huge expensive hassle to
follow – by an add/drop registrar.

The usual explanation of domain tasting says that the registrars
register millions of domains, watch the traffic, and then after 4.9
days they delete the ones that don't seem likely to make back the
US$6.00 registration fee. Often they just delete them all and then
reregister what they can a few minutes later until they find the
domains that produce enough traffic to yield a return well above the
registration fee.
The add grace period is just a mistake. The problem it purports to
solve is not and never was an important one. If you let an important
domain expire, you risk losing the entire investment made in that
domain over many years. But if one registers a domain by mistake, the
most one risks is the ten or twenty dollars you paid to register it.

On Domain Monetization
We note that there is a meaningful difference between domain tasting
and domain monetization. Monetization is a straightforward arbitrage
between the cost of domain registrations and the revenue from as much
pay-per-click traffic as the domain owner can get from people who
visit web sites in the domain. It's a fundamentally sleazy business,
since the web sites have no useful content and the way they get the
traffic is basically by tricking people, either via typos or recently
expired domains.

We do not think it is appropriate in this case to make ICANN as a
regulator to watch and prohibit the Domain monetization practice per
se. Instead, we call upon those commercial enterprises such as Google
or Overture to stop paying for clicks on pages with no content,
thereby dealing with a problem that is not limited to typo and expired
domains. We've seen click arbitrage, people buying Google ads to drive
traffic to pages that are simply other Google ads. This kind of
self-generating traffic for pay-per-click advertising is confusing and
unnecessary for ordinary Internet users and, in the long run, not
healthy for the development of Internet as a whole.

Since Domain monetization is a relatively new phenomena, the impact to
the ordinary users and the Internet community at large is hard to
measure at this point. We think it is worth to watch how it develops
and may propose more specific actions when we have clearer
understanding of measurable impact.

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