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The domain hustle

(in Italy and elsewhere)

April 2000

disponibile anche in italiano

  Giancarlo Livraghi
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There is a peculiar mess in Italy over ownership and registration of internet domains. These circumstances are specific to one market, but I hope some of the considerations may have some relevance also for international readers.

Between the end of 1999 and the first months of 2000 there was a lot of concern and debate, including come clumsy intervention by the government and attempts to solve by law problems that the legislators (and most of the business lobbies) don’t even remotely understand.

Is there a need for new laws and new rules? Not really. There is already more regulation on name ownership and brands than we really need, and some of it is already too complicated. It would need to be simplified, with maybe a bit of proper interpretation so that the principles can be fairly applied in the case of internet domains. Adding more laws and rules to the existing mess can only make things worse.

The fact it that the domain system is cluttered. Almost everything that can be imagined is already registered as .com and the same is happening for .it (as, of course, many other countries). There are plans to extend the international system with new "first level domains" such as .shop .firm .web .info .arts etcetera. In individual countries there are ways of creating new extensions. But in the meantime almost everything that can be registered is owned by somebody and of course there are people deliberately exploiting the system by registering names for the sole purpose of re-selling them. There is no need for new laws to solve this problem. Under existing Italian law, as in the United States and in most other countries, a company or a person can claim ownership if and when it can be proved that whoever registered the domain did so for the purpose of re-selling it – or has no legitimate claim on a name or brand that was established before the fact. Just as squatters can be removed from properties that they don’t own or rent. The problem is that fighting these issues legally takes time; but that, unfortunately, is the fact also in several other matters.

But of course the same name can be owned by several people or companies. If the John Doe company registers "" that’s an obvious infringement. But in the case of "" who has precedence? A famous car maker, a well-established wine maker, or any Mr. Ferrari who owns a bookstore or is a business consultant? There can be no possible solution other than the existing one: "first come, first served". A legal principle, established two thousand years ago and still applied, says that when rights are equal time priority prevails. Whoever wasn’t wise enough to act first will have to look for another solution (of which there are many). By the way, in the specific case of Ferrari the sportscar maker (now a division of the Fiat group) owns the domain. I don’t know if they got there first or they bought it – but I guess they were smart enough to understand the potential of the net quite early in the game.

Any attempt to set a different ruling or system could only result in abuse and corruption. The stronger companies, or those with the stronger connection, would win over the less powerful or less favored by power. And that’s why some of the "powers" may be tempted to seek control.

Are there ways to solve the problem? Of course. A company in Naples could register in Namibia; someone in Toronto could own a domain in Tonga. Ore, more simply, they could use a domain that is not their name but suits their purpose. I am not joking. While structural solutions are sought to expand the domain system, each person or company can find a solution with a bit of ingenuity and imagination.

But on this subject there is a great deal of useless debate, with little real understanding of the issue. There is a widespread alarm in Germany about what they call Abmahnwelle – a flood of legal cases leading often to poor and unfair decisions. The same sort of thing is happening in several other places.

In Italy there are several problems cased by the inefficiency and clumsiness of our "naming authority". There were ridiculous rule that allowed only one domain name for each company and de facto prevented individual people from registering a domain name. When these rules were removed (at the end of 1999) there was an obvious rush that found the authority totally unprepared. The result was a grotesque clutter (it took months so tort it out) and of course several people in the rush got in each others’ way. Of course some squatters got in there before the legitimate owners of names, who often don’t understand how they can get back what they own (there aren’t many lawyers in Italy who are really competent in these matters).

In spite of all that, there is no big Abmahnwelle in Italy and the problem would have sorted itself out, over time, if one person hadn’t decided to deliberately mess it up. Nichi Grauso is a businessman in Sardinia who has made several attempts to gain leadership in the internet – and failed. He enjoys the limelight, and often does peculiar things to make himself visible. He decided to stir up some argument by registering a very large number of domain names – and announcing it publicly. He deliberately included the names of some famous people, including politicians, of course saying that he was ready to return them to their legitimate owners as long as they paid a bit of attention to him. It was more of a lark than blackmail and it doesn’t seem to have brought any advantage to its author; but it caused a great deal of alarm and flutter in political circles, spurring one more hysterical drive to "regulate" the internet.

This short article is not the place to recommend solutions. But they exist and they are relatively simple. To begin with, I think everyone (the government, the authorities, business and the media) should stop and think. They’ve ignored the issue for years, there is no need to act in a hurry. The domain clutter can be confusing, but it doesn’t prevent anyone from operating effectively online. It’s much more important to provide good service, to establish long-lasting relationships and customer care, than to fuss and argue about who owns which domain name.

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