New .eu domain name system scammed

An US company's charge that cheating went on during the rush for new .eu domains is flat out wrong, the European registry responsible for handing out the names countered on Tuesday.

"We certainly don't agree with him," said Patrik Lindn, spokesman for EURid, the Belgium-based non-profit chosen by the European Commission to operate the new .eu top level domain.

Lindn was referring to Bob Parsons, the chief executive of US-based domain registrar GoDaddy.com, who on Sunday said that hundreds of fronts for an unnamed American firm had scammed the system of assigning .eu domain names.
"What happens when you match an inept registry with crafty businessmen? The answer is a really large scam," Parsons wrote in his blog. "This is what is taking place with the 'landrush' introduction of the new .EU top level domain name."

Starting Friday, April 7, EURid began assigning .eu domains to the general public on a first-come-first-served basis. This so-called "landrush" registration followed an earlier "sunrise" period during which existing domain holders could register for their .eu counterparts.

Within the first 12 hours Friday, more than a million domains were registered.

Parsons, however, said it was rigged.

"A few sly companies saw a loophole in the process," he wrote. "These companies, instead of only registering their real active registrars, created hundreds of new 'phantom' registrars."

Parsons went on to say that, because of the numerous "shell" registrars, legitimate companies were overwhelmed and had a smaller chance of registering a desirable domain. He explained the EURid process as akin to a queue, with each attempt to register a URL - successful or not - as sending the registrar "to the back of the line."

The result, Parsons alleged, was that domain name speculators were able to grab more than their fair share. Later, he said, those domains will be auctioned off for thousands of dollars. "Companies who have successfully gamed the system should make a fortune on the .EU landrush - all at the expense of the Europeans," Parsons concluded.

Not so, said EURid's Lindn, who defended the registry's procedures.

"We verified that each registrar was an individual legal entity," he said. "Each had to sign an agreement with us, and prepay 10,000 euros ($12,113)."

But he acknowledged that some many have played the system. "It's definitely possible, but then anyone is allowed to have subsidiaries. If they have ten, they have a better chance," he admitted. "But it's not our concern. Our job was to make registering fair, and we did that."

Nor, said Lindn, will EURid take action against companies which may have set up scores of subsidiary registrars. "We don't plan to do anything as long as there has not been a breach of the contract each signed with us."

Lindn did take exception with Parson's description of the sign-up process. "His way of explaining the queuing system was not true," Lindn said.