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<TITLE>Assessing the "Domain Name Exchange" service proposed by VeriSign</TITLE>
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<FONT FACE="Optima, Times New Roman"><SPAN STYLE='font-size:10pt'>BC Members:<BR>
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On April 5, VeriSign (operator of .com, .net, and .name) proposed a new registry service called "Domain Name Exchange." VeriSign’s proposal and QA& is posted at <a href="http://www.icann.org/en/registries/rsep/verisign-dnex-05apr10-en.pdf">http://www.icann.org/en/registries/rsep/verisign-dnex-05apr10-en.pdf</a> Here’s how VeriSign describes the service:<BR>
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</U></SPAN></FONT><BLOCKQUOTE><FONT FACE="Optima, Times New Roman"><SPAN STYLE='font-size:10pt'><I>Based on ongoing discussions with registrars who represent diverse business models and market segments, VeriSign has developed the concept for the Domain Name Exchange Service to allow a registrar to repurpose a domain name registration that has significant time remaining until expiration. Today when a registrant terminates a package of services from a registrar after, for example, an introductory 1 or 3 month period, the registrar is forced to recoup the investment in the associated domain via monetization or the secondary market. The domain exchange will allow a registrar to offer another registrant a package that sits on top of that same registration using a new domain.<BR>
The Domain Name Exchange Service is an optional service that is designed to provide registrars and registrants with an effective and efficient way to manage domain name registration terms for domain names that are no longer needed.<BR>
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</U></SPAN></FONT></BLOCKQUOTE><FONT FACE="Optima, Times New Roman"><SPAN STYLE='font-size:10pt'>For many website hosting service providers, the registration of a domain name is a secondary service. For example, the European registrar <BR>
1and1 offers web hosting with “free domains included” ( <FONT COLOR="#0000FF"><U><a href="http://1and1.eu">http://1and1.eu</a></U></FONT> ) in order to attract new clients to establish their online presence. Domain Exchange lets 1&1 re-use the registration if a client wants to drop the website and domain after just a few months. Registrars would pay around 1.5x the cost of a regular annual registration in order to get the Exchange option, and they could exchange once per month. Perhaps there will be significant demand for this service from registrars who have lots of turnover with hosting clients.<BR>
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Domain Exchange is being proposed only for .net domains, but VeriSign may propose it for .com at some point. And that’s where several BC officers are already raising concerns that Domain Exchange could be a new form of “domain tasting” that would lead to even more cyber-squatting and typo-squatting. <BR>
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“Domain tasting” is a loaded term in ICANN circles. “Tasting” is how domainers test a domain name to learn whether type-in traffic generates enough advertising revenue to cover costs of registering the domain. The names typically tasted were generic words and phrases (like SpringCleaning.com or SpringFashions.com) that some users might guess at by entering the URL ( instead of going thru a page-ranked search engine). <BR>
Domainers make money on these domain names by “parking” a page with ads for related products and services. <BR>
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The parked pages that result from tasted names are objectionable in the way that highway billboards are objectionable, but there’s nothing illegal about monetizing domain traffic with advertising. Moreover, several BC members are domainers who monetize traffic this way, and other BC members providing online advertising services to support the trade. <BR>
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But nothing infuriates BC members and Internet users more than tasting or parking domains that involve trademarked terms or typographical variants designed to deceive users. Cybersquatting and typosquatting could increase if a new service makes it easier to discover domain names that mislead users into thinking they have landed on a page belonging to a known business or organization they intended to reach.<BR>
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Domainers discovered they could taste traffic for 5 days for zero cost by using the Add Grace Period (AGP) that has always been offered by registrars and registries. That led to rampant tasting in domains like .com. The ICANN community, incl many in the BC, pushed ICANN to end the practice of free tasting thru abuse of the AGP privilege. Using the policy development process, ICANN effectively eliminated free AGP tasting in 2009 (<a href="http://www.icann.org/en/tlds/agp-policy-17dec08-en.htm">http://www.icann.org/en/tlds/agp-policy-17dec08-en.htm</a> )<BR>
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Question is, will a new Domain Exchange service increase the incidence of trademark and typographical squatting? I asked my friends at VeriSign (a NetChoice member) about this concern, and here’s what I learned: <BR>
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Domain Exchange is not going to replace the free and unchecked tasting that was done with AGP before 2009. First, a domain 'taster' has to actually buy a 1-year registration to be able to use domain exchange at 11 monthly intervals. That’s cheaper than buying a dozen registrations, but its not free. Second, it would take a year just to 'taste' a dozen names for ad traffic. <BR>
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Still, VeriSign acknowledges that some parties may see Domain Exchange as a way to “taste” and then register names that infringe on trademarks. So VeriSign is offering additional IP protection tools described in their proposal, such as limitations on exchanges, free reporting on exchanged names, and the WhoWas service (a permanent record of historical Whois). <BR>
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VeriSign is open to suggestions from the BC (and IPC) about other tools that would minimize use of Domain Exchange for TM infringement or other illegal purposes. They’re also prepared to answer questions in a direct dialogue with our members if that’s easier and quicker than using the public comment process described below.<BR>
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So let’s begin internal discussions on BC List, with an intent to send concerns and questions to staff, to VeriSign, and eventually in ICANN public comments.<BR>
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Finally, a word about the ICANN process for review and approval of new registry services</U>: <BR>
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ICANN evaluates new registry services thru its Registry Service Evaluation Process (RSEP). ICANN staff has 15-days to make a "preliminary determination" whether this Registry Service requires further consideration by ICANN because it could raise significant issues with Security & Stability or competition. There’s no official comment period during these 15 days, but BC members can always explain concerns to staff. See RSEP at <a href="http://www.icann.org/en/registries/rsep/rsep.html">http://www.icann.org/en/registries/rsep/rsep.html</a><BR>
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If ICANN determines that the service might raise significant Stability or Security issues, it goes to the Registry Services Technical Evaluation Panel and simultaneously invites public comment on the proposal (2nd chance to comment). This panel has 45 days to do a written report regarding the proposed service effect on Security or Stability.<BR>
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ICANN’s Board then posts the report for public comment (3rd chance to comment), and the Board has 30 days to reach a decision. “In the event the ICANN Board reasonably determines that the proposed Registry Service creates a reasonable risk of a meaningful adverse effect on Stability or Security, Registry Operator will not offer the proposed Registry Service.”<BR>
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So there are 2 or 3 chances to comment over a period of 45 days (or 90 days if the panel raises S&S concerns). <BR>
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