ICANN Reviews Domain Name Sellers

The key oversight agency for Internet addresses is reviewing the way it oversees businesses that sell domain names in the wake of financial and operational problems that left customers of one company nameless.

The Internet Corporation for Assigned Names and Numbers already has taken steps to decertify, whose troubles it said resulted in many customers unable to renew names before they expired or to transfer them to rival registration companies, known as registrars, as required under ICANN rules.

ICANN said broader changes may be needed to prevent similar troubles in the future. Paul Levins, the agency's vice president for corporate affairs, said Monday that the existing rules were written when there was little competition among registrars, while there are about 860 today.

Paul Twomey, ICANN's chief executive, said the agency wasn't looking to increase regulation at the expense of competition.

But the agency, he said, wants to explore whether registrar operators must prove a basic level of skills, whether ICANN must approve any ownership changes and whether ICANN could create enforcement tools short of yanking a company's accreditation entirely.

Other questions include whether the agency should develop an escrow system as a backup repository for data on domain name registrations -- key should a registrar go out of business or be deemed incompetent. A related issue involves whether anonymous registrations through proxy services could hinder data recovery.

ICANN plans to start discussions as it meets in Lisbon, Portugal, this week, although any decisions are likely months away. Other items on the agenda include a decision on the proposed ".xxx" domain name for pornography sites and a separate review of whether registration data for domain names should remain fully public.

Justin Kulhawick, who runs the site critical of RegisterFly, praised ICANN for the broader review but said the agency should have acted on complaints about the company long ago.

He added that he was building a system through which customers could rate registrars on service and price -- one of the items ICANN is discussing.

According to ICANN, RegisterFly has been having trouble registering and managing domain names on behalf of their customers, and an ownership dispute that resulted in a federal lawsuit compounded those problems.

In that dispute, John Naruszewicz accused Kevin Medina of draining RegisterFly coffers to pay for personal expenses like liposuction, leaving the company unable to pay bills required to properly register or renew names for their customers. In a response court filing, Medina disputed Naruszewicz's claims of co-ownership and accused him of fraud.

A judge ruled March 8 in Medina's favor, giving him full ownership and control of the company.

The following week, after months of meetings and letter exchanges, ICANN told Medina it would terminate RegisterFly's accreditation as of this coming Saturday. ICANN said the company violated ICANN rules in failing to let customers transfer names and failing to comply with audit requirements.

Phone numbers listed with RegisterFly's registration records were either disconnected or produced continual busy signals Monday. E-mail inquiries were not immediately answered.

What will happen after Saturday is not clear. RegisterFly can still seek arbitration or file a lawsuit, ICANN officials say.

ICANN said it may automatically transfer customers to a competing registrar, but it said it doesn't have all the necessary data, largely because of the use of anonymous proxy services. Levins said a lawsuit against RegisterFly was possible.


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