Network Solutions' (NSI) registry accepted about 800 domain names containing a hyphen at the end or the beginning of an address. But such names have long been prohibited and therefore should be recaptured, said Michael Roberts, president of the Internet Corp. for Assigned Names and Numbers (ICANN).
"It was a mistake," Roberts said today. "The software was not rejecting the names, but that was fixed earlier this week."
The first such name was registered Nov. 4, leaving some consumers wondering why it took so long to discover the problem.
Roberts explained that the system is automated and does not involve people who would have been able to detect the problem sooner.
In an agreement with ICANN, NSI, which operates the single registry system, and about 23 other approved registrars that feed into that system prohibit the trailing hyphens. The agreement also gives power to the companies to revoke domains that have been mistakenly sold, Roberts said.
Only a few of the approved registrars failed to put a filtering device in their systems, which allowed the unauthorized domains to sneak through, said Don Telage, NSI's registry policy spokesman.
San Francisco-based Internet Domain Registrars was one of the companies that failed to implement the filter, and as a result, it unknowingly registered about 400 bad addresses, said Paul Lum, the company's general manager.
Lum said he was relying on NSI's security system to catch any characters not allowed in a domain, such as an exclamation point, dollar sign and a trailing or leading hyphen.
Early Monday, he learned it was Internet Domain's responsibility to program its own filter. Now the company is left with the unpleasant task of reimbursing a total of $25,000 to those who registered the new domains.
The fiasco will not likely cause a customer-relations problem for Internet Domain, Lum said. Instead he views the situation as evidence that clever Net addresses are highly sought after.
"There is too much pent-up demand for good domain names," he said. "Even though the hyphen isn't very attractive, short names are still preferred."
A lawyer for one unhappy consumer who registered more than 100 of these new domains said the governing bodies could have a difficult time proving the recent glitch was a mistake, as it took them three months to discover the error.
"This could legally test the power of ICANN to revoke registrations," said Robert D. Owen, a New York attorney with the firm Owen & Davis, who represents Andrew Krenicki of Connecticut. "On the one hand they want immunization from litigation, but on the other hand they're asserting power to revoke registrations. That's inconsistent."
Intellectual property lawyer Sally Abel of Fenwick & West in Palo Alto, Calif., agrees that policies may seem inconsistent, but she said it has always been a system in which the administrator sets the rules.
"The way the system is set up, [ICANN and NSI] have the authority to set their own rules and can do whatever they want," she said.
She acknowledged, however, that the incident could create change to the system.
"What will ultimately force some changes are things like Business.com selling for $7.5 million. The world, particularly the commercial world, is realizing the property value of domain names," Abel said. "That alone will put pressure on the system to be more accountable. But we're not there yet."
This is not the first time the universal software being used to reserve Net names has gone on the blink.
Occasionally NSI's registry goes down, according to several registrars, preventing consumers from knowing whether a particular name is available. For the customers, that could mean losing out on a long-sought-after name or paying for a domain only to find out later that it belongs to someone else.
ICANN's Roberts said he is not surprised that there have been some glitches in the system, considering the number of Internet addresses that have been registered in a short amount of time.
Abel agreed, saying: "There has been tremendous pressure on a system that was never designed to deal with this kind of traffic, and there has to be a certain amount of catch-up."
It's been only eight months since the new shared registration system was put in place as part of an ongoing plan to phase out NSI's exclusive government contract for registering names ending in ".com," ".org" and ".net."
In that time, people have become more aware of the cash that catchy domain names can bring in.
Several new registrars recently began accepting domains with 63 characters instead of the usual 22.
Some people quickly snapped up hundreds of addresses soon as they caught wind that longer domains were being accepted. A few admitted they would sell the addresses for a "good" price.
That is exactly what Owen's client Krenicki had in mind when he bought the domain with trailing dashes. He figured that because the longer names were being accepted, then perhaps so were addresses with hyphens, Owen said.
"He didn't register any trademarked names; this is just something he does," Owen explained.