Domain name warehousing
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Domain name warehousing is the common practice of registrars obtaining control of domain names with the intent to hold or “warehouse” names for their use and/or profit. Also see domain name front running and domain tasting, related business practices employed by registrants.
Typically this practice occurs after a domain name has expired and the previous owner (registrant) has not exercised his/her right to renew that name within the allotted time frame (approximately 45 days following expiration). Domain's expiration date and time are easily calculated based on the expiration date in the whois and the redemption process.
According to GNSO Council Deletes Task Force Report (2003), a council organized under the Internet Corporation For Assigned Names and Numbers (ICANN), three specific modes of warehousing were identified:
- The registrant allows the domain name to lapse, but registrar fails to delete the domain name during the grace period, resulting in a paid renewal to the registry. The registrar subsequently assumes registration of the domain name.
- The registrant purchases the domain name through fraud and the registrar assumes registration of the name to resell in order to minimize losses.
- The registrar registers the domain in its own name outright.
When the phrase "Domain Warehousing" was coined in the late 1990s, ICANN registrars were two dimensional entities that served registrants of domain names. The concern at that time was that a registrar would register available domain names and then offer to re-sell those registrations at a "higher than registration" price to potential registrants. By 2006 the name space had clearly matured and the line between registrars, media companies such as AOL.com (who operate ICANN accredited registrars to manage their name portfolios) and large scale commercial registrants (who operate ICANN accredited registrars as security measures) had blurred. It has been hypothesized that by 2010 many large corporations or commercial registrants of domain names will operate an ICANN accredited registrar as a security measure to protect and manage valuable name and trademark inventory.
The primary concern today when one speaks of Domain Warehousing is that a retail registrar, which has historically focused on serving its individual and small business registrants, will make the domain name renewal process difficult, convoluted, or price prohibitive in an effort to unseat exasperated registrants and usurp their registration rights for a profit greater than the potential renewal fee they could earn.
An additional concern is that companies pooling scores of drop registrars for additional registry connections will stand at the expiring domain spigot conducting domain tasting without paying, and then warehouse those which meet traffic criteria while denying the broader community a fair opportunity to compete for those expiring names.
As of this writing the governing body over domain name registration, ICANN, has yet to address those potential inequities. Registrars are in a unique position to impact domain name pricing by introducing competitive bidding or auctions for expired domain names. Circumstances are further impacted when registrars opt not to market the domains in the near term, thereby excluding the recycling of warehoused names indefinitely.
- ICANN's report: GNSO Council Deletes Task Force Report