Domain Slamming from The Globe and Mail November 6, 2002

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KEVIN MARRON
From Thursday's Globe and Mail

An aggressive marketing tactic known as "domain slamming" is confusing many e-business owners, causing some to unwittingly switch Internet service providers and risk bringing their on-line operations to a halt, according to Mark Jeftovic, co-founder and president of Toronto-based easyDNS Technologies Inc.

The term is borrowed from an aggressive tactic used by upstart phone carriers that persuade subscribers to transfer their service without realizing they are doing so.

It's a trend that is prompting ISPs to warn clients to read invoices carefully before paying the annual fees for registering their Web sites.

Mr. Jeftovic's company is in the business of registering domain names — the names used to identify Web sites — and the company also provides services that direct traffic to client Web sites by interpreting the numerical codes that identify each site.

It is a confusing and complicated business for anyone who is not steeped in the technology that underlies the Internet and the complicated procedures involved in registering the ownership of domain names. And it is because it is so complicated and confusing that some Web site owners are being led astray, Mr. Jefovic says.

He says many of his customers have received letters in the mail that they thought were invoices. The letters advised them to pay their annual fees or risk having access to their domain name frozen. Some customers assumed that this was an official notice and paid the fees, not realizing that they were sending their payment to a different registrar than the one they originally signed up with and were, in effect, transferring to a new service provider.

Having transferred their registration to a new company without realizing it, some customers discovered that their Web sites were no longer accessible, because they were not getting the additional technological assistance that easyDNS had been providing, Mr. Jefovic says.

"You wake up one morning and your Web site is down, your e-mail is not going anywhere, none of your employees can receive e-mail and your customers can't find your Web site. That has happened to our customers and it's not pretty," he says.

Tim Kutt, president of Golden Triangle Online Inc., a Kitchener, Ont.,-based Internet Services Provider, says some of his customers have had a similar experience. "They get a letter that looks like an official government document and then they find that they have moved [their registration] without even knowing they are moving. They think it's a government organization or us that is doing it."

Elliott Noss, chief executive officer of Toronto-based Tucows Inc., the world's second-largest registrar of Internet domain names, has also warned clients about domain slamming.

"In the early part of this year, there was a real uptick in the level of confusing marketing — either confusing or deceptive marketing — that went out to end users," Mr. Noss says.

In July of last year, the federal Competition Bureau issued a warning about documents that appeared to be invoices sent out by a business called the "Internet Registry of Canada." Under a letterhead that resembled the Maple Leaf flag, the document informed Web-site owners that their domain name registration was about to expire, urged them to renew and provided a form for making a credit-card payment.

"Complaints received by the Competition Bureau indicate that the mailings from the 'Internet Registry of Canada' give the impression that it is affiliated with the Government of Canada or that it is an officially sanctioned agency registering domain names in Canada. The 'Internet Registry of Canada' is not associated with any government agency," the Competition Bureau advisory stated.

Some of the concerns raised by Internet service providers this year relate to promotional material sent out by 1446513 Ontario Ltd., which operates as the Domain Registry of Canada and the Domain Registry of America Inc. Company representatives declined to be interviewed, but referred a reporter to legal documents filed in connection with a defamation suit launched by 1446513 Ontario Ltd. against Tucows and related companies.

The document filed by Joseph D'Angelo of the Toronto law firm Lang Michener states that there is no affiliation between the Domain Registry of Canada and the Internet Registry of Canada, though it admits there is one common director between the Internet Registry of Canada and the Domain Registry of America.

Letters that the Domain Registry of Canada sent out carried the symbol of a maple leaf and not the Canadian flag, states the document, which notes that the letter informed readers: "This notice is not an invoice rather an easy means of payment should you decide to register or renew your existing domain names with the Domain Registry of Canada."

"The plaintiffs' notices are not in any way misleading, deceptive or likely to cause confusion," Mr. D'Angelo's document states.

Gabriel Ahad, director of communications for the Canadian Internet Registration Authority, the not-for-profit body mandated by the federal government to operate and manage the .ca domain, says domain name holders need to educate themselves more about the process involved in registering names.

"It is unfortunate, but in any highly competitive and newly emerging industry we are unfortunately going to see some parties take advantage of people," he says.

Mr. Noss says it is only the careless who fall prey to domain slamming and there are several steps that organizations should take to avoid this happening. They should make sure that there is one person responsible for maintaining the domain registration, that the contact information for that person is filed properly and kept up to date, and they should keep track of all the domains they own, paying attention to the expiry dates.

"Then you are almost become immune to slamming, because it occurs typically when somebody is in receipt of something that they don't understand," says Mr. Noss, noting that people who don't understand the process are likely to pay what they think is an invoice, particularly if it is accompanied with a warning that they should act quickly or lose their domain name.

"There were folks in the industry who kept sending out invoices, even after customers transferred away from them, simply because people kept paying them," Mr. Noss says.

Such situations are unfortunate, Mr. Jeftovic says, "because a lot of this Internet stuff is hard enough for the man on the street to understand in the fist place. There are major emotional barriers to e-commerce on the Internet and this just adds fuel to the fire. It doesn't inspire confidence in e-commerce structures."

Special to The Globe and Mail