The problems of domain tasting and front-running are interrelated, and so are the solutions to them. The time has come for ICANN to mandate restock fees.
I had a moment of clarity today (believe me, I need them). In the wake of the
Network Solutions scandal over the company's employment of front-running and
I've been talking to a lot of vendors and other interested
Front-running is a tricky problem that defies resolution. I've been inclined
to blame ICANN, but that's unfair. I don't like a lot of ICANN policies, but I
think it's pretty clear (although I have no hard evidence of it) that
front-running comes as a result of some companies selling data they aren't
supposed to be selling. No policy change could prevent it from being committed.
Then today, I realized how to stop front-running: by stopping domain
tasting. Front-running is only employed, or at least the overwhelming majority
of it is employed, in order to taste the domain. Take away the option of
tasting the domain for speculative purposes, and you make front-running too
risky to be worthwhile.
I really think it's that simple. A quick look at the practices of domain
tasters gives some insight into why someone would want to front-run a domain.
This includes Network Solutions. The ICANN
GNSO's Initial Report on Domain Tasting (PDF)
shows, for example, that in July
2007 alone there were over 62 million deletes performed during the grace
period. You can safely assume that nearly all of these were for domain tasting.
Data from VeriSign shows that in April 2007 three registrars each created over
9 million domains and then deleted nearly all of them within the grace period.
The effect is so huge that the majority of domain name registrations in the
last year were for tasting purposes.
All those tens of millions of deletes cost the tasting companies close to
nothing. The direct cost was literally nothing; even if we allow them to charge
some overhead across each account, it's effectively $0.00. The tasting process
is automated and it's not like you have to feed the computers or pay for their
If there were a fee associated with dropping a domain, the logic of the
system would change substantially. One of the interest groups cited in the
ICANN preliminary report recommended that the ICANN fee of 20 cents per domain
be assessed even for a deleted domain. At 9 million domains, that comes to $1.8
million per month for a bunch of domains on which, presumably, the company
is making nothing or next to nothing.