NSI Faces Domain Name "Hoarding" Suit

A class action lawsuit launched against Network Solutions (NSI) claims the domain name registrar has illegally hoarded expired domain names.

Filed by an Alabama businessperson, the suit alleges that NSI has illegally restrained trade and willfully maintained monopoly power over expired domain names.

NSI has a stranglehold over the previously registered and expired domain names and competition in the domain marketplace has been "injured" by the company's actions, according to the suit, filed September 29 in the U.S. District Court, Northern District of Alabama, in Birmingham. Greater competition would occur if NSI, now a division of VeriSign, was required to release the names and the accredited registrars could let companies and users register them. The suit seeks unspecified monetary damages and an injunction requiring NSI to release the expired domain names.

According to NSI spokesperson Christina Binko, the company declines to comment on the ongoing litigation.

In June, Stan Smith, the plaintiff in the case, tried to register 28 expired domain names held by NSI. But Smith, who buys and sells computer equipment from his home, alleges that NSI refused to delete the specific domain names he requested from the Whois database, so he could be the first person to register them. The Whois database is an information repository for all the domain names on the Internet.

"They are hoarding property interests for which they have no claim," says Smith's attorney, Scott Powell. "They are not theirs to auction. They don't belong to Network Solutions. They do not have a property right to them. They have no property interest in them. Once they expire, they belong to the public."

Powell says his client tried to register several domain names including kam.com and swa.com--that's Stan's Web Affiliate. The Whois database showed they were expired, but he could not gain access to them, Powell says. Smith called NSI several times and company officials said they were not releasing them and did not provide a reason, Powell says.

"The speculation and public press announcements have said they were going to auction these names."