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Network Solutions LLC Criticized for Practice

January 11, 2008

Under current regulations, what Network Solutions LLC is doing with domain names isn’t prohibited. They are, however getting strongly criticized.

Network Solutions LLC has been holding domain names in reserve, supposedly as a measure to protect consumers. Instead this practice prevents those interested in the domain name from price-shopping. They do this by locking up a domain name for four days ““ during this time the person who searched that domain name can purchase it from the company for $35 a year, several times more than similar companies charge. If it is not purchased, the name returns to the pool and anyone can register it though any domain name registration company.

Network Solutions’ spokeswoman Susan Wade says that they are doing this with good intentions: to try to combat domain name front running. She states that they are helping to prevent the use of insider information to grab domain names before a business or individual can register them.

Network Solutions is currently being criticized and investigated because what they are doing sounds exactly like what they are trying to prevent. Wade claims that this strategy is being adjusted in response to customer feedback. She plainly stated, “We are not front running. We are not monetizing the page. We have no intent in keeping it. We have no intent in selling it in secondary markets at inflated prices – that is front running.”

An article from the associated press reveals, “In October, the Security and Stability Advisory Committee of the Internet Corporation for Assigned Names and Numbers launched a probe into domain name front running and likened it to a stock broker buying or selling shares ahead of a client’s trade, in anticipation of a movement in price.”

The image of the domain name industry may be at stake because of this, some think.

On the Net:

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