Domain Frontrunning A Ghost In The Machine

Thursday, February 21, 2008 by Mistlee

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Jason Lee Miller
Domain Frontrunning A Ghost In The Machine
Thursday, Feb. 21, 2008

The domain frontrunning issue isn't exactly an open-and-shut case. In fact, it's more like an X-Files case. ICANN can't find evidence the practice really exists, and the one entity who says he has proof won't provide that proof.

Editor's Note: Despite ICANN's lack of evidence, a lot of people are certain the practice of front-running exists. And though Network Solutions says they will delete a held domain if asked, there is still some animosity out there toward them for offering their "protection" without being asked to, and some wonder what the difference between their protection and frontrunning actually is. Is the truth out there? Let us know in the comments section.

It's not like enacting policies against ghosts, exactly. You don't need proof of the existence of frontrunning to enact a policy against it. But in this case, proof might have helped Network Solutions not look so bad.

Last month, NetSol came under fire for automatically registering domains that customers had searched for on their site and then jacking up the price of the domains for a four-day period. NetSol defended the practice as protection against frontrunning, which is the practice of registering a domain someone is searching for and then jacking up the price.

At least NetSol's protection fee was a set price, $34.99 for four days worth of protection, just until they could return the domain within ICANN's grace period.

News of the Network Solutions controversy came to light just as ICANN's Security and Stability Advisory Committee (SSAC) was closing a study on frontrunning. Instead of helping NetSol's case, the findings of the study hurt it a bit. SSAC found no evidence of frontrunning in the 120 complaints submitted.

SSAC explained that in most cases people only thought they were original. But in a world of 6 billion people, originality is officially an illusion. Just because somebody steals your domain name, it doesn't mean you're all that clever.

Steve Crocker, chairman of SSAC Steve Crocker,
chairman of SSAC
"25% we judged to be highly sought-after names," said Steve Crocker, chairman of SSAC, "and so while somebody thought that just because they asked for it, somebody must have jumped in front of them, it was the kind of name that one could predict from regular traffic that it would be caught up very rapidly….And we encountered zero cases that were clear cases of front running."

In fact, three-quarters of the cases they looked at appeared to be "tasting and secondary market activities." "It does not look like there is an active front-running activity."

A fifth of the plaintiffs didn't supply enough information to investigate, and a tenth simply had let their registration lapse. Crocker did acknowledge a lack of trust in the domain marketplace due to the idea of front running and a host of other unsavory practices like domain tasting.

That's not to say frontrunning doesn't happen, only that SSAC could find no evidence that it did. This puts NetSol in a rather awkward position, considering the registrar based its whole frontrunning protection service on the existence of frontrunning.

Network Solutions' Jon Nevett spoke at the meeting, saying that frontrunning certainly did exist, and they had evidence that it did. But when asked to provide that evidence, Nevett refused based on confidentiality agreements with clients.

"We have enough customer information that we researched," said Nevett, "and we have had conversations that were done under confidentiality agreements that I can't specifically talk about. But yes, we were comfortable enough that the front running existed and comfortable enough to take this action."

He also disagreed with the notion that there was no originality in domain searches. "So we did a study of all the names that were reserved and then purchased during that four-day period, and over 90% of the searched names were purchased by the same customer."

Jay Daley, CTO of Nominet Jay Daley,
CTO of Nominet
Jay Daley, CTO of Nominet, remained skeptical and didn't hide it. "But if you don't share the data, nobody's going to believe you. I mean, if you have that data there of provable front-running, if you have a video, CCTV, a man sitting there, that man is front-running, great. We need to see it. Because we have done extensive searches through our registry, through every single complaint, and there is not a single case of front-running we can prove.

"My view on it is that the world is just much smaller than people believe that the world is and that the same stimuli affect all of us, and there are so many people looking for good names, there's just too many coincidences."

At this point it's like listening to a person who believes in ghosts argue with a person who doesn’t. Nevett didn't let up, either, asking Daley to explain how customers would be approached after searching for a domain and offered the domain at an inflated price.

Daley, a good scientist, asked for Nevitt to give him the information necessary for him to find out, which, obviously, wasn't going to happen.

What everybody did seem to agree on without evidence: If frontrunning is going on, information necessary for it to happen is somehow leaking from registrars or ISPs.
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