FREE-MARKET FORCES will prevail following recent changes to domain name trading regulations, legal experts predict.
The Australian domain name administrator, auDA, has announced plans to implement a new policy on the transfer of .au domain name licences. The policy will prevent the registration of domain names for the sole purpose of resale. On the surface, this would appear to be a tightening of the existing rules, but according to experts at Deacons Lawyers, the overall effect of the changes is to liberalise the domain name market.
Nick Abrahams, national leader of Deacons’ technology, media and telecommunications group, explained what he sees as the benefits of the changes to his clients,
“In terms of the benefits … what we’ll have now is a more informed market place. Right at the moment, the transfer of domain names really is kind of a grey area, and it does happen but it’s only allowed to happen in very restricted circumstances such as sale of business.”
Under the new policy, it will be possible, after the six-month holding period, to advertise a domain name listedfor sale. This will result in a more active and informed market, Abrahams said, one which will allow people to effectively bid for their chosen domain name.
The introduction of a standard transfer form will streamline the process for clients and lessen the workload for lawyers, Abrahams added. Deacons’ Michael Pak and Ka-Chi Cheung also predicted that the streamlined transfer process is “likely to reduce the cost of transferring domain names”.
In America, a key concern for domain name regulators is the rise in cybersquatting. Cybersquatters are essentially opportunistic individuals who register domain names in the hope of selling them at a substantial margin to legitimate businesses.
The Australian market is less susceptible to such activity because of the requirement that domain name owners have a “close and substantial connection to the domain”. auDA is proactive about stamping outsuch activity, deregistering any domain name thatappears to be held for speculative purposes.
Abrahams believes concerns about a rise in cybersquatting arsing from the auDA rule changes are unwarranted. “In Australia our policy has been effective in terms of stopping those sorts of speculators from being too active in the market, they are still certainly around, but they are somewhat hamstrung by this requirement of a close and substantial connection,” he said.