RegisterFly Meltdown Continues
The meltdown of troubled domain registrar RegisterFly continues. Here's a quick review of what happened in the past two weeks.
On 21 February 2007, ICANN issued a letter to RegisterFly (PDF file), indicating a Notice of Breach of its Registrar Accreditation Agreement (RAA) and demanding that RegisterFly act within 15 working days to cure the breaches outlined in the letter. The same day, ICANN sent a Notice of Audit (PDF file) that required RegisterFly to allow ICANN to inspect and copy records as well as a notice to submit data to ICANN or a reputable escrow agent regarding registration applications and Registered name holders.
On 27 February 2007, ICANN sent two employees to RegisterFly offices in New Jersey to audit them and obtain the registrant information. RegisterFly did not comply. On 1 March 2007 RegisterFly's lawyers forwarded a letter (PDF file) to ICANN advising that refusal to comply with ICANN's request "should not be construed as my client's unwillingness to cooperate with ICANN but as evidence of their continuing efforts to service their customers." (You bet!)
In response ICANN issued a second letter (PDF file) dated 2 March 2007 setting out additional breaches of the Registrar Agreement. In that letter ICANN describes RegisterFly's statement that refusal to comply is evidence of customer service as "preposterous", which is an unusually strong term by ICANN standards.
ICANN futher indicated that it will file a suit against RegisterFly in the United States District Court for the Central District of California seeking a temporary restraining order (TRO) requiring RegisterFly to turn over the data requested and to compel an emergency audit of its books and records.
Additionally, ICANN convened a telephone conference among Afilias (.info), NeuStar (.biz), VeriSign (.com, .net), RegisterFly backend services provider Tucows and eNom (for which RegisterFly was a reseller) as well as representatives of RegisterFly.
To protect RegisterFly clients, the domain registries involved have agreed to move any expired RegisterFly that are about to be deleted from the Redemption Grace Period into the Server-Delete-Prohibited status. This will prevent these domains from being deleted from the registry.
ICANN defends its previous lack of action on its blog:
ICANN is not a regulator. We rely mainly on contract law. We do not condone in any way whatsoever RegisterFly’s business practice and behaviour.
What will happen to the other domains held hostage by RegisterFly is anyone's guess:
The options for customers to transfer their names to another registrar at this stage are limited. We will advise if we have more information on this point.
RegisterFly's only hope to get out of this hell of its own making may be to sell its client list and domains to an existing, more reputable registrar and cease operations. But at this stage there are no potential buyers in sight.
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