Dot-com cops still asleep on the beat

Someone ought to be hopping-up-and-down mad about this "domain-kiting" nonsense -- someone other than GoDaddy CEO Bob Parsons, who has done his fair share of hopping.

ICANN would be an obvious candidate to share Parsons' pique, but its bureaucratic feet appear nailed to the floor. So too should VeriSign be bouncing, but the .com registrar can't register so much as a bunny hop -- at least not at my prodding. And any individual or business that needs a .com domain name should be shaking at the prospect of being victimized by these bamboozlers.

Yet there's so little hopping . . . and I'm hard-pressed to understand why.

As we've been chronicling here for the past two months, the .com registration process essentially has been hijacked by a band of profiteers who collectively scoop up millions of domain names every month with little or no expectation of using them as they were designed. Known variously as domain tasting, the add/drop scheme and Parsons' most recent coinage, domain kiting, the practice - perfectly legal - exploits a loophole in ICANN's registration regulations, along with VeriSign's apparent acquiescence, to generate risk-free revenue for its practitioners. A five-day grace period that registries allow all customers is what makes the scheme possible: Claim a name -- or a million names -- and you've got five days to "reconsider" without having incurred any expense; your deposit will be returned in full.

Here's an excerpt from Parsons' latest blog entry: "Just over 35 million names were registered for the month of May. Of those just over 2.7 million were permanent registrations. That means that 92.3 percent of all domain names registered were part of a scam now known as domain kiting. These names were kept off of the market, they were used to generate search-engine revenue and -- because of a loophole ICANN refuses to eliminate -- those 32.3 million names were used without being paid for."

ICANN has told me it doesn't intend to do anything about domain kiting until someone goes through proper channels and files the necessary paperwork. (Parsons says his people have complained often and loudly at ICANN gatherings.)

But what's up with VeriSign? It's the one covering the tab for all these domain-name freeloaders. I recently asked the company for its position on the matter.

"In response to your question -- VeriSign has seen a significant increase in this activity over the last couple of years," a spokesman replied by e-mail. "We have significantly ramped our systems to address the increased system requirements and continually monitor system levels."

That much we could have guessed. But does VeriSign consider the registration shenanigans a problem in need of a fix, or merely a cost of doing business? A second try brought this reply: "VeriSign believes that until such time as ICANN would make any changes to the system, we consider this a cost of doing business."

So ICANN says someone needs to fill out a trouble ticket. And the most obvious someone says it's comfortable with the status quo until ICANN gets off its can.

Does anyone else find this perfectly ridiculous? Parsons does.

"VeriSign isn't Santa Claus," he says. "They should be doing something because they're the ones providing all the services for the domain kiting. It's incredible that they would not step up and do something about this, if for no other reason but the good of the Internet."

While it's possible that ICANN or VeriSign may yet find the resolve to do the right thing here, Parsons believes the answer ultimately may have to come from Washington.

"It's going to take somebody in Congress losing their own domain name to a domain kiter," he says.

Yes, indeed, that might generate a little hop-to-it-ness.

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