ICANN Kill Two Birds with One Stone

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 domain tasting, I've been talking to a lot of vendors and other interested parties.

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 health insurance.

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.