This statement is in response to the VeriSign request for approval of a Domain Name Exchange Service for the .NET Registry. At this point, it is being submitted on my own behalf, but with the explicit support of a number of other At-Large Advisory Committee (ALAC) members. The comment is currently under discussion by ALAC and will be undergoing a formal vote starting within a few days. Once the five-day vote is completed, I expect that it will be a formal ALAC position. Please acknowledge receipt of this comment. Alan Greenberg ----------------------------- We caution against approval of this request. Although there may be some benefit to registrars and even to selected registrants for such a service, the potential for negative impact is simply too great. We note the following: - In the absence of knowing what the exchange fee will be, or any ability for ICANN to control it, this service could be new form of Domain Tasting. - This is exacerbated because the RSTEP provision "The registrar's account balance will be debited the exchange fee at the time of the initial exchange occurring within a one year term based upon initial registration date" could be read to imply that if more than one exchange is done in a year, only a single fee for the initial exchange will be charged. - The service effectively introduces the concept of monthly gTLD domain registrations, a practice which does not seem to be forbidden by the various ICANN contracts, but regardless has not been the subject of any policy discussion in recent years. - In the absence of explicit details on how and when reporting will be performed, there is the potential for abuse. - The transient nature of domain names (with a potential life as short as one month) will render UDRP and for new gTLDs, URS proceeding virtually ineffective. At the very least, the UDRP and URS would need to be adjusted to address the concept of a Domain Name Exchange Service. - Although the background of the service cites "Today when a registrant terminates a package of services from a registrar after, for example, an introductory 1 or 3 month period, the registrar is forced to recoup the investment in the associated domain via monetization or the secondary market.", these is no restriction that the service, if approved, be used to address that situation. In fact, further statements in the request imply that Registrars may in fact market it in ways unrelated to the initial scenario. - The used of the term "forced" in the preceding point implies that monetization and the secondary market are only reluctantly used by registrars or those in the domain name industry. In reality, current wisdom seems to imply that monetization and the secondary market generate more revenue that traditional domain registrations and there is no apparent reluctance involved. - Although we have no doubt that the introduction of such a service would result in innovative products and marketing, there is little evidence that the service will be in the public interest, and there is some evidence that it could do harm.