The RegisterFly.com saga sheds light on a little-understood but vital corner of the Internet. Domain-name registrars receive fees from individuals and businesses to record Web names that start with "www" and end with ".com," ".net," or the like. The registration industry has grown at a gallop, from 145 players in 2000 to more than 860 last year. Many operate smoothly, charging a few dollars to register new names, renew annual registrations, or transfer them, then pass that information on to a handful of registries that keep master lists of names.
But some unruly outfits have also appeared, while the industry goes virtually unregulated. "We need to tame the wild wild West and bring control and regulation to this business," says Sam Flanders, president of 2wmc.com Consulting Group Inc. and a RegisterFly.com customer.
After months of customer complaints about poor service, RegisterFly's problems came to a boil in February when Naruszewicz and another company director fired Medina as chief executive. They accused him of stealing from customers to pay for luxury cars, a penthouse apartment in Miami's posh South Beach, and a liposuction operation. Medina, who denies the accusations, regained the helm on Mar. 9 after a U.S. District Court judge ruled that he was the sole owner. But in the meantime the company Web site was operating fitfully. Some 75,000 customers had lost control of their domain names, according to a court filing. Many are trying to transfer their accounts to other registrars but haven't been able to get RegisterFly to respond.'TRAIN WRECK'
RegisterFly customers aren't just mad at the company. They fault the International Corporation for Assigned Names & Numbers (ICANN), a private nonprofit organization sanctioned by the U.S. and other nations to accredit registrars, for not moving fast enough to investigate and take action. It was only after a year of eroding service that ICANN on Feb. 21 threatened to revoke RegisterFly's accreditation. "ICANN knew what was going on, yet they waited and let this train wreck happen," says Philip J. Corwin, counsel for the Internet Commerce Assn., which represents companies that own domain names.
ICANN insists it acted as quickly as possible. Until February, the organization lacked evidence that RegisterFly had violated its contract with ICANN by failing to pay fees and by replacing the names of the registrees with Kevin Medina's name, according to ICANN. The group gave RegisterFly a deadline of Mar. 14 to set things right or face de-accreditation. But ICANN, based in Marina del Rey, Calif., has limited powers. The U.S. Commerce Dept. asked it to monitor the operations of registrars, not oversee customer service complaints.
Still, the organization sees the RegisterFly mess as a call to action. Paul Twomey, ICANN's chief executive, plans on proposing reforms at a meeting of ICANN's board and interested parties in Lisbon during the week of Mar. 26. For one thing, he would like ICANN to have more say over the activities of companies downstream from the registrars, known as resellers, who also sell domain names. RegisterFly was a reseller until it became a registrar in its own right last year. Twomey also favors establishing a training-certification regime for registrars. These would be the first significant reforms for ICANN since it was established in 1998. By Steve Hamm and Megan Tucker