CADNA published the following press release today:
WASHINGTON, September 24 – ICANN’s Domain Tasting Ad Hoc group, who is tasked with examining the impact of domain tasting, recently conducted a survey intended to gather industry opinions and experiences with the Add Grace Period (AGP). The AGP is a five-day period during which registrants are able to cancel their domain and recuperate registration fees paid to the registry.
In line with our commitment to significantly reduce cybersquatting, CADNA’s submission details the experiences of our members with the AGP and highlights CADNA’s desire to eliminate this unnecessary loophole in the domain name system.
The AGP was originally intended to provide registrants and registrars with an avenue to correct registration mistakes and to refund losses from fraudulent charges when detected within the first five days after domain name creation. Unfortunately, the AGP’s sole original intent is no longer respected and today it is more often used to enhance the profitability of a small number of registrars and registrants.
Abuse of the AGP has led to the practices of domain name tasting and domain name kiting since it allows speculators to pre-validate domain names of interest without any financial commitment. This ability to test a domain name for value emboldens AGP-exploiters to cast an extremely wide net in order to identify the domains that will yield the most profit.
Parties that benefit from the abuse of this policy include registrants, registrars (in many cases – the registrar is also the registrant), registries and even ICANN, since ICANN is paid for every new domain name that is registered.
Ultimately, CADNA’s greatest concern regarding the AGP is that it enables the practices of domain tasting and kiting, which often result in various kinds of online consumer harms. From phishing and the marketing of unwanted counterfeit goods to traditional cybersquatting and other criminal activity, domain tasting enables cyber-criminals to conduct their illegal businesses on a grand scale.
When the AGP is terminated, Internet users across the globe will benefit from improved safety and less confusion online. Additionally, trademarks holders will be able to protect their brands as well as their customers and partners with greater ease. CADNA strongly believes that the benefits of removing the AGP far outweigh any of the arguments to keep it in place that have been proposed by the parties profiting from this policy.
CADNA’s submission to ICANN regarding the AGP is available online at http://www.cadna.org/pdf/cadna-response-to-icann.pdf
I don't think terminating the Add Grace Period would be the right way to go. It might be the easiest way to deal with the domain kiting problem, but I strongly disagree with CADNA saying that "the benefits of removing the AGP far outweight any of the arguments to keep it in place". The most important argument against terminating the AGP, is that many people accidentally register domains they did not intend to buy. For example, it can happen that they register a typo domain (e.g. MyFavvoriteBooks.com instead of MyFavoriteBooks.com). In such a case the AGP is very useful, because it allows registrants to delete the typo domain and to register the correct domain name instead. Therefore, eliminating the grace period would be to the disadvantage of every honest person registering domain names.
Still, it is right that something must be done about domain kiting. A better approach to deal with this issue would be to look at the number of domains a registrant deletes during the AGP, in my opinion. This way people only dropping one or two domains would be refunded the domain registration fee, but registrants dropping more than X domains during one five-day period would have to pay a deletion fee. This approach is similar to what the .ORG registry announced in February: It charges an excess deletion fee if the total number of domains deleted within the grace period is greater than 90%.