Domain Names and the Law

Questionable business practices taint the industry

Domain name registrars use a variety of questionable business practices, according to reviews and news articles. The one that is most likely to affect you is entrapment. Many registrars have policies that make dropping or transferring your domain name difficult or expensive -- that's a big problem if you ever want to switch registrars. If you want to re-register an expired domain name, prices can also be a lot higher. A June 12, 2006 BusinessWeek Online article reports, "Some registrars, like GoDaddy.com, charge almost 10 times the signup fee of $8.95 for failing to reregister."

One way to circumvent that problem is to register for multiple years. Registrars commonly allow you to register a domain name for up to ten years, and some offer discounts for long-term registrations. Expect to pay $80 to $150 for discount domain registration from Namecheap.com or GoDaddy.com. VeriSign and ICANN are currently lobbying the government for price increases. A long-term domain registration will protect you against price increases, as well as prevent your registrar from turning your domain name into a hostage.

The entrapment issue is an argument both for and against using your web host as your domain name registrar. Using a third-party registrar makes it easier to switch web hosts in the future. Using separate service providers halves the hassle of switching hosts. On the other hand, getting web hosting and domain registration from the same company is less expensive and easier to set up initially. We found many unsubstantiated claims that some web hosting services that bundle free domain names with hosting actually register themselves as the registrant and administrative contact rather than you. If those allegations are true, that creates another entrapment opportunity for an unethical business.

Both VeriSign and domain resellers have been accused of using tricks to entice or force renewals. According to a CNet.com news article, VeriSign was sending false notices to domain-name owners telling them that their domain names were about to expire. A GoDaddy lawsuit resulted in a court order that stopped that practice.