There has been a debate raging around the fact that many registrars are taking advantage of the commercial opportunity to acquire domains from their own customers in what can be viewed as unethical behaviour.I believe that many registrars are potentially in conflict with their own customers over the resale of domains, whether they are dropped or held by the registrar themselves. Although on the surface this is a commercial decision that the registrars are at liberty to make it is far more important than that. The problem I can see happening is that it is now in the interest of a registrar for domains to drop and to ensure that they seize the assets for their own commercial benefit at the earliest opportunity.
In the event that a domain is mistakenly dropped by a customer then the registrar can then value the domain based upon the work that company has done to create a brand with the dropped domain.For example, let's imagine that google.com was dropped. The registrar could theoretically seize the domain and demand a payment of several million dollars from Google for it even though Google was the business that developed the brand behind google.com. This is a form of extortion. I see little difference between the activities of many registrars and this example.
From a domainers perspective.....it's also exactly the same. Rather than assisting customers to retain their domain assets it is now in the registrars interest to take a more draconian perspective and to immediately take control of domains at the earliest possible time.
The counter argument from the registrars is that the domainer should not have let the domain drop in the first place. Although this may be true it is not the complete picture. For instance, the domainer is completely dependent upon the registrars systems to renew a domain. What if those systems fail or what if the registrar decides to make it difficult to renew domains on mass?
Who decides whether a domain has been dropped on purpose or because a failure in a system? The registrar decides and these same registrars are now viewing this as a commercial opportunity. Potentially by the time a domainer finds out about a change in their registrar's system it is often too late to migrate the names elsewhere.
For example, I've had situations where I've lost a domain because my international credit card was rejected.....even though there were funds available! The problem was found to be with a new upload of code by the registrar that impacted international credit cards.
In the case of tucows.....as a domain community I think that we should do whatever is within our power to raise the issue as a complete conflict of interest and indicate that we will pursue the matter as aggresively as possible through ICANN. We need to take this action for any registrar who behaves in a manner that promotes a conflict between themselves and their clients.
The ICA (Internet Commerce Association) needs to take a stand on this matter as it strikes at the heart of what it means to be a domain owner. Without security in our assets and our registrar partners domain owners have nothing but bits and bytes that can vanish as fast they were created.
Domain wiki: Internet Commerce Association
Source: Posted on WhizzBangsBlog by Michael Gilmour -- Reprinted with permission -- November 11, 2008