ICANN says new policy has killed 'domain tasting'

The entity in charge of the Internet's addressing system is declaring victory over an abusive trend in registering domain names.

Last year, the Internet Corporation for Assigned Names and Numbers (ICANN) modified its domain name registration policy to make it much more expensive for people to register domain names en masse.

The move was intended to stop "domain tasting," where someone registers a raft of domain names and then monitors those domains for up to five days to see which domains attract a lot of visitors. If the domain looks like a loser, a person could get a refund within five days, called the Add Grace Period.

The grace period is intended to allow people to be refunded, for example, if they made a spelling mistake while registering a domain. But many specialize in abusing the grace period by setting up thousands of Web sites crammed with advertising links on newly registered domains. If the advertising revenue exceeded the registration fees, the domain would be kept.

But domain tasting is a nuisance for regular Internet users, as it makes domain names unavailable and also increases the number of Web sites that are designed only to capture clicks for advertising and redirect users to other sites.

ICANN had a few ideas for how to stop domain tasting. Last year, it decided not to refund the US$0.20 annual fee it charges registries -- entities such as VeriSign, which runs the ".com" top-level domain -- for a registered domain name even if one is forfeited during the Add Grace Period.

Since that cost was passed on to people and companies registering lots of domain names, it caused domain tasting to drop. ICANN then changed the policy to make it even more expensive for domain tasters by charging registrars $6.75 or more -- the registration fee charged by the registry to the registrar -- even if the domain name is deleted during the grace period.

Exceptions are still made for mistakes that registrants need to correct. ICANN will refund up to 10 percent of the net new registrations to registrars, but the rest are charged. The practice dramatically changes the financial picture for domain tasters.

ICANN gave an example of a registrar with 1,000 new domain names. If 300 are deleted during the Add Grace Period, the registrar has 700 new ones, meaning they're entitled to refunds for 10 percent of the deleted ones, or 70 names. That means 230 will be charged at $6.75 each, costing the registrar $1,552.50. When ICANN just charged $0.20, the cost would have been only $46.

Since the cost is passed onto the person or entity registering the domain names, it has affected their practices. In a report, ICANN said Add Grace Period deletions for registries that have implemented the policy have dropped 99.7 percent between June 2008 to April 2009.

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