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Advisory: Registrar Expired Name Market Developments

ICANN has issued this advisory to make the community aware of certain changes in the marketplace concerning the rights to expired gTLD domain registrations. In the past two weeks, two registrars have announced plans to begin directly selling or auctioning expired domain registrations.

On 20 September 2004, Network Solutions announced the introduction of a "New, Enhanced Backorder Service that Provides Preferred Access to Expired Domain Names," < http://www.networksolutions-customerfeedback.com/pressreleases.html#20040920>.

This followed Tucows' announcement on 7 September 2004 of a similar, new "Auction Service for Expiring Domain Names," <http://resellers.tucows.com/about/press/abc_viewPressReleasesPy?ID=press74&year=2004&ACTION=View>.

In broad outline, 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.

These registrars have modified their agreements with registrants to secure the registrants' consent to auction the names. Under both the Tucows and Network Solutions 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.


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Domain Name System
Internationalized Domain Name ,IDN,"IDNs are domain names that include characters used in the local representation of languages that are not written with the twenty-six letters of the basic Latin alphabet ""a-z"". An IDN can contain Latin letters with diacritical marks, as required by many European languages, or may consist of characters from non-Latin scripts such as Arabic or Chinese. Many languages also use other types of digits than the European ""0-9"". The basic Latin alphabet together with the European-Arabic digits are, for the purpose of domain names, termed ""ASCII characters"" (ASCII = American Standard Code for Information Interchange). These are also included in the broader range of ""Unicode characters"" that provides the basis for IDNs. The ""hostname rule"" requires that all domain names of the type under consideration here are stored in the DNS using only the ASCII characters listed above, with the one further addition of the hyphen ""-"". The Unicode form of an IDN therefore requires special encoding before it is entered into the DNS. The following terminology is used when distinguishing between these forms: A domain name consists of a series of ""labels"" (separated by ""dots""). The ASCII form of an IDN label is termed an ""A-label"". All operations defined in the DNS protocol use A-labels exclusively. The Unicode form, which a user expects to be displayed, is termed a ""U-label"". The difference may be illustrated with the Hindi word for ""test"" — परीका — appearing here as a U-label would (in the Devanagari script). A special form of ""ASCII compatible encoding"" (abbreviated ACE) is applied to this to produce the corresponding A-label: xn--11b5bs1di. A domain name that only includes ASCII letters, digits, and hyphens is termed an ""LDH label"". Although the definitions of A-labels and LDH-labels overlap, a name consisting exclusively of LDH labels, such as""icann.org"" is not an IDN."