[council] Agenda Request

[Ross Rader <ross@xxxxxxxxxx>]

Bruce, fellow Councillors,

At our next meeting, I would like to propose the initiation of a new 
policy development process concerning the Redemption Grace Period and 
request that this topic be added to our agenda.
It has recently come to my attention recently that the current 
implementation (detailed at 
http://www.icann.org/bucharest/redemption-topic.htm) is an optional 
registry service which may not be meeting the needs of registrants as 
originally envisaged when it was implemented. Recent press reports (see 
below) and registrant complaints indicate that names are being lost 
despite the implementation of this registry service.
I have spent a lot of time considering whether or not Council can afford 
to take on additional work given our current workload and have come to 
the view that because of the widespread support for the Redemption Grace 
Period amongst the constituencies (as documented on the ICANN website) 
and the pre-existence of strong policy and implementation proposals that 
already have consensus support of the stakeholders, we should be able to 
confirm the Redemption Grace Period proposals as consensus policy fairly 
quickly and without much additional effort or contentious debate.
Because of the pre-existing consensus on this issue, I will propose to 
move this forward without creating a task force per Annex A, Section 8 
of the ICANN Bylaws once we have agreed to initiate a PDP and been 
provided with an issues report by the staff. 
(http://www.icann.org/general/bylaws.htm#AnnexA-8). i.e. the fast-track.
In the very least, creation of an issues report will gather up 
substantive data on this subject and allow us to make an informed 
decision regarding whether or not circumstances like those detailed 
below are widespread enough to justify launching a full-fledged PDP.
Your consideration of this matter would be extremely appreciated. If you 
have any questions, please don't hesitate to drop me a note (or give me 
a ring).
-ross

'Drop Catchers' Buy and Sell Web Names Others Let Slip
By DAVID KESMODEL
Wall Street Journal
February 22, 2006; Page B1
Last month, Chicago real-estate agent Judy Orr discovered that a Web
site she used to showcase area homes had gone off-line. It turned out
she had failed to pay the $9 annual renewal fee for her Web address,
oak-lawn-real-estate.com.

But getting her site back online wasn't as easy as she had hoped:
Another company had snapped up the domain name and wanted nearly $2,500
to return it to her. "I was sick to my stomach," Ms. Orr says. It took
two years of work to build up the site so it would rank prominently in
Google's search results, and that time "went down the drain," she says.

The new owner of the address was Lease Domains Inc., which is run by a
21-year-old graduate student, Anthos Chrysanthou, who works out of his
parents' house in a Chicago suburb. Mr. Chrysanthou says his
two-year-old company owns more than 2,000 domain names, many obtained
through a process called "drop catching" -- snagging names owners have
let expire, either accidentally or because they no longer want them.

"I liken the whole situation to tangible real estate," says Mr.
Chrysanthou, who is pursuing his master's in business administration at
St. Xavier University in Chicago. "If you're not paying your mortgage or
your taxes on it, it's going to get taken away."

Mr. Chrysanthou is one of hundreds of drop catchers who either resell
names or use them for Web sites loaded with advertisements. (Ms. Orr's
former site now features text ads for real estate.) Many drop catchers
have learned the trade in the past year, seeking a piece of the booming
market for domains spurred by a surge in online advertising. The
practice also has gotten a lift from providers of domain services, such
as SnapNames.com Inc., Pool.com Inc. and GoDaddy.com Inc., which have
introduced tools aimed at helping people grab expiring domains.

The services circulate lists each day showing which domains are about to
go up for grabs. Auctions are held for particularly in-demand names, and
prices can go sky-high: A1.com sold for $260,250 in December, after its
previous owner let the registration lapse.

Drop catching "has pretty much changed completely in a few years' time,"
says Michael Berkens, who runs MostWantedDomains.com, owner of about
45,000 domains, which range from 4nudepictures.com to 401kplans.com, out
of his Fort Lauderdale, Fla., home. "There's more people," he says, and
"prices have just escalated."

DNJournal.com, a publication that tracks the domain industry, reported
2,291 sales of expired domains in auctions last year, with winning bids
totaling a combined $11.5 million. That was up from 885 sales totaling
$4.2 million a year earlier. Auctioneers don't report all deals to
DNJournal, and the site doesn't track deals valued at less than $500.

Roughly 20,000 expired domain names become available each day, according
to industry executives. While many were consciously discarded by their
owners, others, like Ms. Orr's, are the product of a domain-registration
system that many users don't understand well.

When a user registers a domain name, it can be reserved for as many as
10 years, typically for $80. But many choose a one-year registration
because it is less expensive, often about $10, and because they may not
want the site for a longer period. At the end of the year, the domain
registrar generally sends renewal notices to the owner, but such
messages can be missed if the owner has changed email addresses in that
time.

Under rules administered by the Internet Corporation for Assigned Names
and Numbers, the group that oversees the assignment of Web addresses,
domain registrars such as GoDaddy and Network Solutions LLC have as many
as 45 days after the expiration date to notify the official domain
registry whether a name is being renewed or deleted. Typically,
registrars have given users a grace period -- sometimes as long as 45
days -- to renew their name.

If a name is deleted, ICANN guidelines then call for a 30-day
"redemption grace period," during which the original owner can still
claim the name. If there is no claim in the redemption period, the name
is dropped from the registry after a five-day holding period, and anyone
is entitled to seek it.

For the .com and .net registries, managed by VeriSign Inc., names drop
starting around 2 p.m. Eastern each day, all year long. What follows is
a process that some in the industry call "pounding." As the names drop,
Internet companies that help users acquire expired names send rapid
computer commands to the registry, seeking to grab the most valuable
names. It is "a mad rush," says Dan Rubin, who runs justdropped.com,
which helps people identify and acquire expired domains. Registries for
other domain suffixes drop names at different times of day.

The drop process underwent a key shift starting in late 2004. That is
when SnapNames started a new service for grabbing domains. The company
has signed exclusive agreements with more than a half-dozen registrars,
including Network Solutions and Moniker.com, under which the registrars
transfer expired domains to SnapNames, and SnapNames auctions them off.
That way, names that people are interested in don't go through the
traditional drop process that is open to anyone.

GoDaddy, the largest domain registrar, has introduced its own auction
service for expired names that were registered with it, as have other
registrars, as they seek a cut of the action for expired names. They
begin auctions for names even before the names have officially expired
but warn auction participants that the original owner could still redeem
the name.

For domain owners, the new system means names can be grabbed from them
even more quickly than they could before. Instead of going through the
full deletion cycle -- which went as long as 75 days -- names are being
transferred to new owners in 30 to 45 days.

Paul Twomey, chief executive of ICANN, says some people in the domain
industry recently have raised concerns that the guidelines governing
expired names are "being utilized in ways that were not originally
intended." But Mr. Twomey says no one has proposed a formal change in
policy to address the issue.

Ms. Orr's name, oak-lawn-real-estate.com, is one of those that was
transferred before going through the full deletion process, says Jay
Westerdal, who runs Name Intelligence Inc., a Bellevue, Wash., company
that tracks the industry.

Tim Ruiz, vice president of domain services for GoDaddy, which
transferred the name, says, "We make every attempt to give ample
opportunity for registrants to renew." He says the company gives
registrants 30 days to claim a name after it has expired.

If a corporation loses a domain name that it believes is copyrighted or
trademarked, it can seek to recover the name by appealing to an
arbitration panel under ICANN's dispute-resolution policy. It also could
take the domain's new owner to court, though that can be more expensive.


Ms. Orr says she lost her site's name, which wasn't copyrighted or
trademarked, because she made the mistake of relying on her Web-hosting
company to keep track of her registration. She says she didn't see
renewal notices from GoDaddy because it had an old email address for
her. Ms. Orr plans to use another site -- oak-lawn-il.com -- to replace
the one she lost.