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v. March 20, 2017
Domain Capital: Risks - sample case Registerfly (and Featureprice)
Domain capital, domain registration and registrar, site administration, risk to loose domains, precaution, hijacking domains etc.
Domains are vulnerable
The Registerfly case is the major case in the Internet history to demonstrate the risks for your domain property.
(Whereas the Featureprice case is the major case to demonstrate the risk of hosting services for sites, which also includes some risk for domain ownership.)
These were the realisations of the Worst Case Scenarios (West German "Super-Gau", East German "Havarie"). Read more on this on http://wikipedia.org / search expression: Registerfly.
The Featureprice case can not be found on Wikipedia. It happened some years earlier. You can find information on it via Google.
Some additional information is supplied within the text here below.
.be domains and Registerfly
In 2005...2006, Registerfly was the main registrar of .be domains (Belgium). This is due to various promotional zero-dollar offers for .be domains by Registerfly during 2005 and probably until late 2006.
A significant part of the Registerfly domain data base included .be domains. While the exact number can not be specified at this time, the number is supposed to be between 100 000 and 300 000 or more .be domains. When customers tried to renew such domains, the money was drawn from their credit card but domain renewal did not take place.
So in their Registerfly customer account, their domain was marked as renewed, while the Belgium organization for these domains - for this function the equivalent to ICANN - had already made them available for new domain registrants. In fact, the domains where shown as available in case of WHOIS searches.
The official Belgian organization for the .be registry refused to apply to these domains the status “Server-Delete-Prohibited” or any other kind of temporary protection. This refusal was the answer for the corresponding request for various .be domains, for example for the domain notenverga.be (a word joke, "notenvergabe" = "rating...", pointing to the German site http://vox7.com = rating of election candidates.)
So while ICANN coordinated some kind of protection, the registrants of .be domains had the risk to definitely loose their domains in case of some marketing value (high visitor frequence) to domain hunters.
The Registerfly case also demonstrates the need to regulate a generalized better protection of ownership for all national domains.
Tucows was somehow involved in the registration process.
Tucows reacted in full acceptance of co-responsibility while not being involved in any faulty action. Tucows coordinated some kind of instant intervention in an attempt to reduce the problems.
But as the software of Registerfly was unable to deal with problems properly, there was no chance to settle problems instantly in a coordinated manner. It is impossible to administer several 100 000 problem cases by hand and by human labour, for single item values of only approximately 10 USD. - In this case: even 0 USD for some hundred thousand promotional domains.
If the software does not master the job, the case is hopeless. It is just possible to reduce for major case groups the problem level. This has in fact been done with success. This could not help for .be domains, as far as they already had been freed several weeks before this intervention.
The cases Registerfly and Featureprice have something in common:
In both cases, the 2 owners, male persons, had not only a business relationship but also an emotional relationship. As a consequence, a clear definition of ownership was lacking, also a clear regulation how to use the company funds. In the domain and hosting business, service is typically prepaid.
This overall constellation has a high risk to result in problems. These problems can not have instant solutions, due to typical delays before courts can find out and define the ownership, the responsibilities and some forced dispute settlement.
This takes typically approximately 2 years or more, while customer accounts are typically renewed within 0 and 12 months. The generated problems differ from customer to customer and can not any more be generalized by software which anyway also is suffering from the disorder. The low-priced services in this field do not cover manual problem solving. Everything is breaking down for the customers.
The result: Be aware of these risks for your sites.
Various precautions are required for professional sites to reduce such risks. If you want assistance for such risk reduction, please send a remuneration suggestion for this service to the mail address specified at the end of this text.
The author of these lines was in contact with TUCOWS and ICANN in the ciritical period. The aspect of involvement in penal code violations had been introduced in this discussion. Contact with the Belgium registry administration was also based on their annual reports with statistics showing the significant impact of domains being part of the promotional offers of Registerfly. The reports showed the resulting statistical effect when most of these domains had already been freed in the registry, while still being on the Registerfly database as owned by registrants (generating there renewal payments, cashed in by Registerfly).
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