auDA introduces new rules to block domain hogs

In a series of reforms announced this week, the Australian Domain Name Administrator (auDA) has regulated against domain traders by outlawing the practice of registering a domain name for the sole purpose of reselling it.

The auDA board approved the reforms this week after policy submissions were drafted on the basis of recommendations made at a names policy panel meeting late last year, with the authority now allowing the transfer of domain name licences between relevant entities under a separate condition requiring parties to disclose the sale method and price of any domain transaction.

Larry Bloch, CEO of domain name registering service NetRegistry, welcomed the move to relax guidelines surrounding the transfer of domain names between businesses, saying "these are policy changes the industry has been waiting for".

"We've been saying since 2002 that an outright prohibition on the sale and transfer of domain names is draconian and unnecessary," he said, adding that he was also in favour of the measure introduced requiring parties to disclose the sum and method of their transactions.

"What we're after is transparency, so I'd say it's a good thing," said Bloch. "It's a lot like house prices, people are able to see them and get an idea of the market. Having said that there's so many different ways that things can change hands in the domain space that it can be difficult to get an accurate picture."

While the reforms have been spearheaded by a loosening of restrictions on the transfer of domain names from one registrant to another, a separate feature of the policy has stated that "it will not be allowable to register a domain name for the sole purpose of resale or transfer to a third party".

Bloch was critical, however, of auDA's move to regulate against speculative trading in the domain name space, claiming this to be a case of bureaucratic mishandling and an example of the authority "yet again trying to influence the market forces that govern this space".

"This is classic anti-business behaviour from auDA, not everyone buying something wants to use it, there's always a section in any market that simply trades," he said.

Bloch went on to describe this particular change as "unworkable", saying that it had proven to be a difficult area to enforce already.

According to Bloch, although the policy has "never been explicitly stated" it has always been the case that speculative trading in domain names is illegal.

"Overall, I think trying to stop this does more to hinder legitimate business than it does to thwart speculators," he said.

The domain name authority has also introduced a six-month cooling off period for businesses wishing to sell on a domain name, with the policy announcement stating "after six months, registrants will be able to offer their domain name for sale/transfer by any means".

The announcement comes after it was revealed last week that a Sydney business was plunged into substantial difficulty after auDA revoked its domain licence with only 24 hours' notice.

auDA CEO Chris Disspain was unavailable for comment when contacted by ZDNet.com.au.