VeriSign and Icann are bring sued by a group of eight
domain name registrars seeking to stop the back-ordering services
of internet domain names.
The lawsuit seeks to halt the implementation of a
VeriSign-backed waiting list for expired domain names called Wait
List Service (WLS).
The suit accuses VeriSign and Icann, the non-profit corporation
responsible for allocating internet protocol address space and
managing top-level domains, of "planning to implement a scheme to
dupe consumers into buying domain names the consumers will never be
able to register, and an unlawful and fraudulent protection
racket".
The battle is over how to re-register the 10,000 to 25,000 top
level domains that become available each day after their owners
fail to pay renewal fees, said Bill Mushkin, the chief executive
officer of Name.com, one of the registrars behind the lawsuit.
Under the existing system, popular domain names are often
back-ordered and then auctioned to the highest bidder when they
become available again. While customers may pay a higher fee for a
back-ordered domain - on average they cost between $30 and $60 -
they only pay for the domains when they obtain them.
Under the WLS system, back-ordered domains would be awarded on a
first-come, first-serve basis, but customers would pay an annual
fee to back-order the domain, regardless of whether it becomes
available for purchase during the year, Mushkin said.
Mushkin and the other plaintiffs argued that this system could
help Verisign create "insurance" services which would be used by
companies looking to ensure that their own domain names never
become available to the general public.
"The WLS thereby allows VeriSign and Icann to generate fees by
playing their unknowing customers against each other for merely
maintaining the status quo," the court filings said.
The WLS implementation will also reduce the amount of money
smaller registrars make from back-ordered domains.
"From a smaller registrar's perspective, the amount of money
from these can be the difference between profitability and a loss,"
Mushkin said. "A lot of the smaller registrars are going to go out
of business if WLS gets implemented."
VeriSign vice-president of government relations Tom Galvin
defended the WLS system, claiming it would help remove the
uncertainty involved in back-ordering domain names.
"It enables a person who wants a domain name that's already
registered to know in certainty that if a domain name ever expires,
they will get it," he said.
The eight companies named as plaintiffs in the suit are: ABR
Products, Name.com, Lee Chambers Company, Fiducia, Spot Domain ,
!$6.25 Domains Network, Ausregistry Group and Bid It Win It.
Robert McMillian writes for IDG News Service