ALAC Position on VeriSign Domain Name Exchange Service request

[Alan Greenberg <alan.greenberg@xxxxxxxxx>]

The ALAC has now formally endorsed the following statement.

Alan Greenberg

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The ALAC cautions against approval of this request. Although there 
may be some benefit to registrars and even to selected registrants 
for such a service, the potential for negative impact is simply too 
great. We note the following:
- In the absence of knowing what the exchange fee will be, or any 
ability for ICANN to control it, this service could be new form of 
Domain Tasting.
- This is exacerbated because the RSTEP provision "The registrar's 
account balance will be debited the exchange fee at the time of the 
initial exchange occurring within a one
year term based upon initial registration date" could be read to 
imply that if more than one exchange is done in a year, only a single 
fee for the initial exchange will be charged.
- The service effectively introduces the concept of monthly gTLD 
domain registrations, a practice which does not seem to be forbidden 
by the various ICANN contracts, but regardless has not been the 
subject of any policy discussion in recent years.
- In the absence of explicit details on how and when reporting will 
be performed, there is the potential for abuse.
- The transient nature of domain names (with a potential life as 
short as one month) will render UDRP and for new gTLDs, URS 
proceeding virtually ineffective. At the very least, the UDRP and URS 
would need to be adjusted to address the concept of a Domain Name 
Exchange Service.
- Although the background of the service cites "Today when a 
registrant terminates a package of services from a registrar after, 
for example, an introductory 1 or 3 month
period, the registrar is forced to recoup the investment in the 
associated domain via monetization or the secondary market.", these 
is no restriction that the service, if approved, be used to address 
that situation. In fact, further statements in the request imply that 
Registrars may in fact market it in ways unrelated to the initial scenario.
- The used of the term "forced" in the preceding point implies that 
monetization and the secondary market are only reluctantly used by 
registrars or those in the domain name industry. In reality, current 
wisdom seems to imply that monetization and the secondary market 
generate more revenue that traditional domain registrations and there 
is no apparent reluctance involved.
- Although we have no doubt that the introduction of such a service 
would result in innovative products and marketing, there is little 
evidence that the service will be in the public interest, and there 
is some evidence that it could do harm.