Readers of this blog and my old mailing list know that I am no big fan of Network Solutions and its long history of anti-competitive and generally dirty business practises. From YCombinator comes this nugget about Network Solutions, exploiting a loophole extended by ICANN to pre-register domain names you’ve searched for on their site, thus preventing other registrars from handling the transaction later. Network Solutions currently charges $35 for an annual domain name registration, while most of their competitors land squarely between $7 and $15.
The problem exhibits itself thus: A query at the Network Solutions web site via its whois service will cause the domain name to appear to be available via NetSol, but in performing the same search via a third-party registrar the domain name appears to have been registered via Network Solutions to a private registrant. This is evil.
The practice is called “front running“, because of its similarity to the illegal practice of stock brokers executing orders on their own behalf in advance of processing orders placed by clients. The loophole that makes it possible, called “domain tasting” allows any user (or in this case, registrar) to register a domain name and be granted a refund five days later, allowing it to return to the pool of available names. Some estimates state that there are more than 1,000,000 domain names locked up in “tastes” at any given time.
It’s unclear why ICANN instituted this practise. Domain tasting appears to be an unnecessary feature which is primarily useful for domain name campers to get a feel for the traffic levels around available names before they purchase them and squat on them, thus making them unavailable for use by “legitimate” web services. But let’s assume that I’m in the wrong here and that it is a feature which has some greater benefit for legitimate web publishers.
The root of the problem therefore appears to be the fact that ICANN allows Registrars, who like stock brokers within their own industry are in a privileged position to know and understand the ebb and flow of demand for certain names, to also register domain names. This practice should be disallowed. Registrations of domain names by accredited registrars, their subsidiaries, and their affiliates ought to be a process requiring written approval by ICANN. Although this sounds like a lot of administrivia, many of us who originally registered domain names in the 1990s have been there before… and functionally there should not be that much demand among Registrars to purchase new domain names for their own use.
This is a “separation of church and state” issue which drills to the very core of the fact that ICANN has struggled to meet the competing demands of egalitarianism and commercialization in the Domain Name registry business. A problem most of us have encountered is that Network Solutions is the only authoritative source for doing Whois searches on available domain names, since it is the only one which lists even the contact information from users who’ve registered a domain name from other registrars.
Front running is illegal in the securities trade, and should be in the domain name services industry as well. That Network Solutions is on the leading edge of exploiting the absence of legal guidance on this matter should be no surprise to anyone who’s worked in this industry for any length of time. For its part, ICANN continues to prove itself to be the “League of Nations” of the web.