
The Network Solutions front-running scandal
By Jerome Saiz, Tue, January 15th, 2008
This is quite a PR nightmare for Network Solutions, after having been caught indulging in a practice dangerously close from Front Running. It registers and freezes domain names that are looked up for availability on its website.
The rage has been going for a week now amongst web professionals and aficionados alike, and there is no sign of a lull yet. What got them started is a small, unannounced, change made by major registrar Network Solutions (part of Verisign).
Network Solutions decided that it would preventively register most of the domain names that were checked through his website for availability. When word of this hit the domainers and webmasters boards, countless of tests were conducted : totally improbable domain names would be checked on NSI's website and would appear to be free to register. Immediately, the same names would be checked through another registrar and would then appear to just have been registred by Network Solutions.
At first it seemed to the communauty that Network Solutions had been caught red handed indulging in Front Running. The uproar was fierce as Front Running is a vicious scam suspected by many in the domains industry. It consists for a WHOIS operator (generally web-based) to register names being checked through him and then to offer the interested party to buy it from him on the second-hand market, where prices are much, much higher. ICANN, the regulating body for domain names, even published a warning about it last October, and said it was investigating two cases of potential Front Running.
Then NSI's PR machine kicked in and it turned out it's not quite like Front Running : Network Solutions explains they do this as a protective measure in order to stop said Front Running. The names are only registred to them for four days, and can still be bought on their website.
Of course, the explanation was deemed far from satisfactory by the crowd. And the fact is, the move from NSI does not protect from anything, except from the competition. The domain names registred are still available to anybody, and not just the original user who made the search, but only through Network Solutions, and thus for more than three times the market price ($35 against $7 to $10).
Besides, the way Network Solutions handles that new feature opens the recently-checked domains for everybody to see, through monitoring of a specific DNS (ns1.reserveddomainname.com). And of course, professionals in the domains business will probably be faster to buy them when they get freed back to the Registry than individuals who looked for them in the first place.
Network Solutions has yet to suspend its move. Its only defense at that time has been to tell that it does not monetize the "parked" domains registered that way, which seems to be proved false by billboards for its own service appearing on some of those domains.
The PR stunt to get out of this situation might be an interesting one to watch...
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