NSI's so-called Reserve Policy adapts to market pressure and threatened legal challenge.
After 5 days of controversy, sniping, public relations statements and damage control, Network Solutions (NSI) has attempted to address the growing firestorm over allegations of Domain Name Front Running (DNFR). To be sure, there will still be debate about whether NSI was ever really motivated to protect consumers by reserving searched domains for 4 of the 5 day grace period. Certainly, NSI was also protecting itself against the prospect that consumers would use their domain availability search service and then register available domains with less expense registrar (no doubt a common occurrence).
There are legitimate arguments that NSI's Reserve Policy, even in its new form and implementation, creates more problems than it solves. But give credit where credit is due. Network Solutions actively participated in the debate, issuing public statements and giving interviews to explain its policy and rationale. From a legal standpoint, there were two serious problems with NSI's reservation policy. The first was that, by failing to provide notice that serached domains would be 'reserved,' they were in potential violation of consumer protection laws for deceptive practices. The second was that they were putting up parking pages with adlinks on the 'reserved' domains, opening themselves up to cybersquatting allegations by trademark holders. In response to pressure and threatened legal action, NSI modified its Reserve Policy by pulling the reserved domains out of its monetization program (parking pages with adword links) and, as importantly, increasing the level of notice it provides to consumers using its availability service.
The NSI home page now contains this notice, which is no doubt legally adequate and relieving some concerns about consumer deception.
Clicking on the "New Protection Measures" link takes you to a page with this information. There is little doubt that the information on this page again meets the legal requirements of notice.
There is little doubt that a majority of consumers won't see or read the notice until it is too late. But in an internet world where user policies pushed to the bottom of web page footers and/ or never read by consumers, at least NSI put its notice close to the search box on the front page. The market will decide what happens next. Some consumers (like me) will avoid using NSI's availability search unless seeking to lock a domain for 4 days in order to consider options and alternatives. Other registrars will see opportunity in what NSI has done here. Someone will offer a 'domain search and lock' service which markets the simple notion that the 5 days grace period allows anyone - not just domain tasters or other evil-doers - to reserve a domain for 5 days.
NSI's credibility and consumer protection justification will remain heavily debated. But there is always a mix of company self interest in any product or service offering. That's called capitalism. NSI could improve its credibility and avoid further alienation of many by offering two distinct services, one for its labeled "Find A Domain" availability search (mislabeled above since consumers are doing more than finding available domains with the present service) and another for "Reserve a Domain." This would truly give consumers a conspicuous choice about whether they want to lock or reserve a domain in the first place; i.e. whether the consumer wants to be protected by NSI's otherwise unilateral and commercially advantageous reserve / locking. This would also have the added benefit of leaving the vast majority of domains in the market, available to other registrants without the 4 day lock.
Someday, ICANN will step in and do what it should have done long ago, end the 5 grace period altogether. Until then, the market and threats of potential liability will be the only safeguards against Registrars who go too far, or seek to intentionally leverage their position for commercial gain without adequate consumer justification.
[Click the link for more information on trademark registration]
Dave: Does this mean they don't pay any upstream fees for 'reserving' the domain?
Posted by: Enrico Schaefer | 02/26/2008 at 07:38
I noticed they also put those "reserved" domain names on "client hold". That means they won't be listed in the root zone files, and that further means no one will be able to query NetSol's nameservers to see what domain names are attached to them.
Posted by: Dave Zan | 01/17/2008 at 03:00