Those companies are also among several that provide drop catching services to customers interesting in acquiring domains that expire. If Enom or GoDaddy succeeds in getting a domain for you, it goes directly into your account, ready for immediate management. Unfortunately, companies like them are becoming the exception rather than the rule.

The domain industry, especially that portion of it involved in the acquisition and distribution of expiring names, is currently suffering from an intolerable plague of incompetent and obviously unsupervised ICANN accredited registrars. Many of these back alley outfits have been enlisted by drop catching services like Namewinner, Pool and SnapNames that are under intense competitive pressure to increase their success rate.

The situation has gotten so bad that we believe it presents a potentially fatal threat to many of the aftermarket services. Such flagrant consumer abuse, if left unchecked, will provide Verisign with a fully loaded clip of high powered ammunition to use in pushing its anti-competitive Wait List Service (WLS - a program awaiting a U.S. Department of Commerce decision on whether it can go forward). It is widely believed that implementation of WLS would be a death blow to most current drop catchers because it would give Verisign a monopoly on distribution of expiring .com and .net domains.  In addition, the gross mishandling of customer accounts by these substandard registrars threatens to undermine consumer confidence in the domain name registration system at large. 

As in all industries, there have always been a few bad players in the domain business; the occasional ItsYourDomain.com (and even worse IYD resellers like DomainsNext.com) that make it a policy to hold domains hostage rather than let customers transfer out to a reputable registrar as required by ICANN rules. They won’t tell you when you register a domain there that you will pay a stiff exit fee if you ever want to leave (a fee that is far higher than the cost of staying put). Even if you submit to the extortion and pay, you will have to jump through all sorts of hoops aimed at frustrating your escape. 

To justify the impassable barricades they set up, these dishonorable operators claim it is necessary for security reasons. That is demonstrably false as reputable companies like Moniker.com prove on a daily basis. They have a reputation for extremely high security (having never lost a domain), yet transferring a domain out can be facilitated with a simple email. Those who own non .com or .net domains have to get an authorization code to leave their current registrar. IYD and others of their ilk routinely ignore requests for the code to keep unfortunate customers from getting out. Just type "ItsYourDomain" (or "DomainsNext") into Google if you are interested in reading more of the horror stories from their customers. 

With just a few rotten apples in the orchard, most of us could stay away from the wormy fruit, but now if you participate in the hunt for aftermarket domains, bad encounters are practically unavoidable. In fact the new breed of registrar riff raff makes the oleaginous operators in the previous paragraph look like choirboys by comparison. 

As I noted above, the situation has careened out of control due to the intense competition in the expiring domains sector. As more competitors poured into the field, each drop catching company raced to sign up every registrar they could find that had a measurable pulse. The more registrar partners they lined up, the better their chances of catching the domains their customers wanted. Unfortunately we now know that the companies and their customers would have been much better off if a lot of those previously unknown registrars had been left lurking in the shadows. 

The domain forums are filled with horror stories from domain buyers. Here is just one example from RealNames at DNForum.com: “One of the primary reasons I decided to stop playing the drop game is the crap registrars (the companies) use. I have a few dozen names (many of which are expiring soon) and find it impossible to control the names. The registar’s website is poorly done with non-functioning pages, some features do not work, unable to log in, can't change nameservers, unable to do password recovery, unlock fails, no easy way to get transfer away auth codes, all emails to tech support are ignored, etc!"

He went on to say "This BS involves several registrars located in Asia, however, a few of them are also little known U.S. firms. Right now I am dealing with a firm in India who ignores all attempts to contact them regarding a mid-3-figure domain I won. Log in information I received  6 months ago does not work anymore and password recovery also does not work. Similar things with Japanese and Korean firms (and a couple of 3rd rate U.S. ones). There is no way I will ever do business with ****** again and take the chance I will get a schlock registrar and deal with all the hassle and perhaps lose the name or be unable to change nameservers." (Editor's Note: since we are printing just one of many similar complaints, we edited out the name of the drop catching company to be fair because the exact same things are being said about their competitors). 

Drop catching companies need to sit up and take notice that these hastily acquired registrars are causing them permanent customer loss in addition to a tarnished reputation. They start out with a positive, a caught domain that makes the customer happy for a few days. But when the buyer realizes they are going to be drug over a bed of broken glass before they ever see the domain that customer turns into an outspoken enemy and never returns. 

Enom’s Club Drop avoids these problems by requiring all of their registrar partners to have caught domains managed through Enom’s usual customer interface. In our June cover story on Pool.com, CEO Michael Arrington acknowledged his company was aware of rising customer resentment and was trying to get all of their registrar partners to join others that have already turned domain management over to Namescout.com, a well-known registrar co-owned by Pool’s parent company. That is the right direction to be heading and we think the task should be given top priority. Until ICANN steps in and exercises some authority over these rogue registrars, we also think it would be in the best interests of the drop companies to cut these non-compliant registrars loose before they cause any more damage. The few domains they catch, even those sold for several thousand dollars, cannot possibly be worth alienating a company's entire customer base. 

In the midst of this gloomy storm, there may be one glimmer of hope on the horizon. On July 12, ICANN issued a new set of transfer rules governing registrars that are to take affect November 12, 2004. Among other things, these would require accredited registrars to use one standard form for transfers, have English language sites, provide auth codes within 5 days of request and would make transfer approval the default in case a registrar fails to respond. 

A losing registrar would have to have a very strong reason for denying a transfer (such as a domain being part of a UDRP proceeding), hopefully eliminating the runaround consumers currently experience at these places. While this all looks great on paper there is one big fly in the ointment. ICANN already has rules in place that ban much of the flagrant abuse we are seeing today. The problem is there has been no enforcement. If the current outlaws continue to thumb their nose at the governing body with no fear of reprisal, a new rule book isn’t going to solve anything.

That being the case, we urge you to watch how well ICANN polices the new policy and  insist on complete compliance of current rules as well as those scheduled to go into effect. You can report any problems you are experiencing using the information below to file a report with both Internic and ICANN.  If it takes some registrar suspensions to get the attention of those currently giving the industry a giant black eye, then so be it. ICANN needs to take their accreditation authority seriously and understand that letting substandard registrars display an ICANN-accredited seal leads the public to believe this kind of outrageous customer abuse has ICANN’s blessing.  It’s time for action before even more consumers simply walk away from potential purchases in disgust. 

Editor's Note: Since this editorial was published, ICANN's new transfer rules have gone into effect. We have found that this has improved the situation though there are still compliance problems with some registrars. However we have seen evidence that ICANN is now acting promptly when registrar complaints are brought to their attention. If you have a problem we urge you to use the contact information below to let ICANN know about it. 

In another step forward, ItsYourDomain.com now allows you to request auth codes online and it looks like those are being sent out promptly by email which should finally make it possible to transfer your names out of that registrar if you choose to do so. While ICANN's revised transfer policy makes it easier for you to leave registrars you are unhappy with, a lot of concern has been expressed about the new rules also making it easier to steal domains. To protect yourself against unauthorized transfer requests, you should be sure to lock your domains and unlock them only when you are ready to move them out (just about any registrar worth using will have a lock/unlock feature in their domain control panel).

If you wish to comment on Ron Jackson's Editorial, write to Editor@DNJournal.com