Re: [At-Large] ALAC Draft Statement on Domain Tasting and Domain Monetization

On 3/28/07, Izumi AIZU <iza@xxxxxxx> wrote:

Hi,

Here follows and attached is the third version. I messed up with the
wiki, changing the link page title made it impossible to keep the
history - thus this is a kind of new page now.
I will try to find ways to fix it... in the mean time. I changed the
title from "Comments" to "Statement". We still need more inputs and
reactions from you guys!

Thanks,
izumi

Here is the wiki URL:
https://st.icann.org/alac/index.cgi?al_2007_r_1

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

Version 1.3, Mar 28

On behalf of the ordinary Internet users, the At-Large Advisory
Committee (ALAC), with inputs from the worldwide At-Large Structures
and other friends, would like to make the following statements on
Domain Tasting and Domain Monetization.

We think Domain Tasting and Domain Monetization are two different
issues, though certain areas may have some relationship, and therefore
we like to discuss them separately.

The need to articulate the issue first for Domain Tasting
We assume that Domain Tasting utilizing the existing Five-day Add
Grace Period is an abuse that results in confusion of the ordinary
Internet users and gives an unfair advantage to speculators.

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 and their experience in using the Internet.

ALAC will draft a formal request shortly to ask 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 a consensus position.

Upon receiving the Issue Report by the staff, GNSO must make the
decision whether a formal PDP is necessary or not.

In addition, here are some possible actions you can do voluntarily now:

With the User Consituency, business and non-commercial:
Find the best ways to protect the interest of the end users, as
registrants as well as just as 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 safeguard for the
domain names they registered, what are the rights of the registrants,
for example.

With the Registrars Constituency:
Finalize and implement Registrars Code of Conduct that prohibits
unfair speculation and exploitation on Domain name registration
including the use of five day Add Grace period. In case full consensus
is difficult to achieve, some voluntary Code of Conduct or Best
Practice or some kind of Self-certification may be a good alternative
to assure user confidence.

With Registry Constituency: gTLD and ccTLDs
Consider how to avoid user confusion and unfair practices by
abolishing the five day add grace period. Adding small fee, such as 25
cents per Domain to those registrants who kept their names using add
grace period may be another solution.

With ICANN Board:
We suggest ICANN Board to consider how to prohibit unfair speculation,
enhance consumer trust to Domain Name registration system, for
example, initiating a third party study on the impact of Domain
Tasting and Domain Monetization/speculation to the ordinary Internet
users. ALAC is more than happy to assist such study,

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. More importantly, the presence of such website makes
web-surfing by ordinary users far more difficult and confusing than
they should be.

We do not think it is appropriate in this case to make ICANN as a
regulator to watch and prohibit the Domain Monetization practices per
se. Instead, on behalf of ordinary Internet users, we call upon those
commercial enterprises such as Google or Overture to take appropriate
measures such as 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 wider Internet community is hard to measure
at this point. It seems clear, however, that it does not improve the
user experience at all. We think it is worth to keep watching on how
it develops and may seek for specific actions when we have clearer
understanding of measurable impact.

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.

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Re: [At-Large] ALAC Draft Statement on Domain Tasting and Domain Monetization - V. 1.3