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BulkRegister Sues VeriSign for Slamming

Last Friday, Champ Mitchell, VeriSign mass markets executive vice president, said the days of competing registrars stealing its customer base was a thing of the past. On Monday morning, the domain name giant was handed a lawsuit for a temporary restraining order and injunction for attempted domain slamming.

"For a long time we just laid there and let everybody take our base away," he said at an analyst day meeting about the company's rapidly dwindling customer base. "Those days are over and they will not return."

It seems VeriSign might have been a little too exuberant getting its customer base back if the lawsuit filed by BulkRegister has any truth to it; the registrar claims VeriSign "engaged in unfair practices" with a recent marketing campaign that attempted to get domain owners to sign on with VeriSign to renew their existing policy.

Competing registrars send notices to domain owners with an upcoming expiration as a standard practice in the industry, since the information is open to the public through the WHOIS database. But BulkRegister claims VeriSign went too far to get owners to switch as a result of deceptive practices, a term called domain slamming.

Domain slamming is similar to the age-old practice of long-distance telephone slamming, where consumers are "tricked" into switching their long-distance carrier. Federal laws prohibit the practice.

BulkRegister officials maintain VeriSign sent out "Expiration Notices" starting April 25 with a deadline of Wednesday for renewal, whether the domain was actually set to expire or not. What's more, they say, the re-registration fee of $29 is significantly higher than what BulkRegister itself was charging for the service and that the attendant switch could result in the domain owners loss of domain name service (DNS), the service that resolves a customer's domain address with an IP address.

Tom Cunningham, BulkRegister chief executive officer, said the damages caused by VeriSign's false advertising are exacerbated by the industry's slow down in new and renewed domain names and is a violation of the Lanham Act.

"Our actions today are a necessary step towards ensuring the domain name industry is held to higher standards in business practices," he said.

The suit alleges two counts of false advertising, one count of tortious interference with contractual relations and one count of tortious interference with economic opportunity.

Last year, VeriSign took steps to ensure domain slamming was minimized, employing a controversial transfer program that put the onus on re-registering with the domain owner, not the registrar. The five-calendar-day deadline resulted in scores of expired domains and many outraged customers

VeriSign officials were unavailable for comment at press time.