Published January 8, 2011
Choosing the right domain name registrar doesn't just involve price, features and security - ethics issues may also be a consideration. For example, the reported practice of domain name warehousing in relation to some name extensions.
Usually when a domain name expires and after the relevant grace period, it is deleted and released back into the pool - a process also known as "dropping". It can then be registered by another party. However, for a registrant trying to regain control of a name at this point, it can be a difficult task due to the increasing numbers of "drop registrars" - companies that register expired names immediately after they drop.
But even before that, another potential roadblock for registrants who have failed to renew an expired domain name in time but wish to regain control is where registrars reportedly hold onto some expired names instead of releasing them at all.
This is done for the purposes of either auctioning them off to the highest bidder, other forms of monetisation or to resell the domain name back to the registrant at a greatly inflated price. Usually in the latter case, further monetisation is implemented in the interim by the displaying of advertising under the "expired" domain name. While this is domain name warehousing in its most common form, other variations exist such as pre-emptive registrations of names that could become popular or requested; for the purposes of resale at a later date.
Registrars are in a powerful position when it comes to determining a profitable name to warehouse. They know what domain names are currently in the grace period and can quite easily determine the popularity of those names - particularly if the registrar also provides web hosting services for the name in question. While in the grace period, only the registrar, the registrant or someone acting on behalf of the registrant can renew the domain name - and the registrar also gets first stab at grabbing the domain once the grace period is over if they do not delete it.
Registrars involved in domain name warehousing will sometimes cite recouping of expenses being a motivation for engaging in the practice and that they are performing a valuable service for the customer. Domain name warehousing has reportedly been occurring not just with smaller registrars, but some very big names in the industry have also been accused of the practice in the past.
The good news for registrants of Australian domain names is warehousing is considered unacceptable conduct by the auDA - the body that oversees the .au registry. auDA policies expressly forbid .au registrars from practices such as pre-registering domain names that may be popular in the future, registering names in anticipation of a customer's choice and can only renew an expired domain name at the request of a registrant.
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