The Generic Names Supporting Organization (GNSO) which is ICANN’s main policy body released its report on domain tasting today.

ICANN describes domain testing as follows:

“Domain tasting is where someone uses existing legitimate processes to register a domain name and then tests to see if the address has sufficient traffic to provide more income than the annual registration fee (usually through the addition of pay-per-click advertising). If the address is deemed sufficiently profitable, it is kept. If not, the current “add grace period” (AGP) where domains can be returned within five days without cost, is used to return the domain at no net cost to the registrant.”

The report states the views of many of the groups that have commented on the situation, but cites the comments of the Business and Commercial Users’ Constituency (BCC) most frequently

Here are some of the more interesting comments in the report.

Domain tasting makes up the majority of domain transactions today and the practice is abusive and contrary to goals of creating a fair and open Internet.

 

Domain tasting only benefits a small number of registrars and registrants while causing harm to the vast majority of Internet users.

 

Domain tasting is an unforeseen abuse of the add grace period, that the main volume of domain tasting is performed by a select few registrars and/or their

Customers..

 

The add grace period provides registrars with an unfair competitive advantage over all other potential registrants since they have the technological capability to

quickly add, drop, and identify names of value without incurring any cost, whether on their own account or on behalf of their customers.

 

Domain tasters are able to register very large numbers of names, while only paying for names which apparently will deliver a positive ROI over a paid registration period.

 

The solutions recommended are:

 

A new policy that either removes the add grace period completely, or substantially changes the economics associated with the add grace period so that

Registrants cannot commercially “test” large quantities of names for free.

 

Immediate action to rectify this problem which has been rapidly growing for more than two years.

 

A practice that allows for the testing and subsequent return of non-profitable purchases is unheard of in nearly every other marketplace and that

Policies for domain names must become more closely aligned with those of other marketplaces.

 

The BC proposes the following actions, in order of preference:

 

1) Eliminate the AGP, but provide accredited registrars with the ability to test their domain fulfillment systems via a number of test adds/changes/deletes without cost. The number

agreed upon should be derived from research on registrars that are not involved in domain tasting. or,

 

2) Change the economics of domain tasting – The portion of every domain registration fee due to ICANN should be non-refundable and excess deletes (based on an agreed ratio

In a given time period) should result in full payment of all registration fees for the period.

 

 

Also cited in the report is the view of the At-Large Advisory Committee (ALAC) which states its position as:

 

“The position of the ALAC is that domain tasting is both inappropriate and harmful and should be eliminated.”

 

Also cited in the report is the view of the Intellectual Property Interests Constituency (IPC) which states its position as:

 

“The IPC views favorably the option of making the ICANN fee apply to all add grace period deletes, stating that domain tasting reduces ICANN revenues as tasted domains are not

Subject to this fee. The IPC notes that had the 0.20 USD been levied on each domain name deleted during the add grace period in July 2007 alone, it would have resulted in over 12.5

Million USD in revenue, over 25% of the projected revenues in ICANN’s FY 2007-2008 budget.”

 

The report concludes as follows:

 

Domain tasting is an unforeseen abuse of the Add Grace Period. Domain tasting now makes up the majority of domain transactions. While tasting appears to have led to an increase in the number of registered domain names, we believe that the practice is unfair, abusive, and contrary to our collective goals of creating a fair and open Internet that encourages competition and delivers all users relevant and tailored experiences.

 

We believe that the current practice benefits only a small number of registrars and registrants while causing harm to the vast majority of Internet Users. As such, the BC encourages and supports policy reform aimed at curbing abusive domain name tasting. We recommend a new policy that either removes the Add Grace Period completely, or substantially changes the economics associated with this grace period so that one cannot commercially “test” large quantities of names for free.

 

This initial report is an early step in this process, and will be posted for public comment for 20 days.

At MostWantedDomains.com, we have never engaged in domain tasting and we are against it. We believe domain testing will be stopped or the economics of it will be greatly curtailed in the near future.

If you would like to comment on the report you can do so by here

If you would like to read the full report, you can do so here