Expiring Domain Names to be Auctioned

has issued an advisory that two registrars have announced plans to begin directly selling or auctioning expired domain registrations. On September 20, 2004, Network Solutions announced the introduction of a "New, Enhanced Backorder Service that Provides Preferred Access to Expired Domain Names," while Tucows' announced on 7 September 2004 a similar, new "Auction Service for Expiring Domain Names," on September 7, 2004.

According to ICANN, both registrars have announced that they intend to auction the rights to domain names in the event that registrants fail to renew them at the conclusion of a grace period following expiration. Instead of names "dropping" back into a "pool" of names available for re-registration on a first-come, first-served basis, names would instead remain at the current registrar and would be re-assigned to the control of the highest bidder.

Under both proposals, the prior registrant would receive a share of the proceeds of the auction. In Tucows' case, approximately 80% of the auction price is returned to the prior registrant. NSI proposes to distribute 20% or less to the prior registrant. Tucows has also proposed a variation of this auction model that would operate at the registry level and would allow all registrars to participate as auction "brokers" for their customers.