Registerfly, a Domain Name Disaster - Where’s the Money…and Where’s ICANN?
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So what did Medina spend that money on? This really deserves to be quoted in full from the civil complaint. “Defendant has wasted UNI’s assets by, among others: (a) wiring $9,000 in UNI funds on three separate occasions to pay for the company of Defendant’s personal escort, (b) using UNI funds to pay the $10,000 monthly rent on Defendant’s personal penthouse residence in Miami Beach, Florida; (c) spending tens of thousands of dollars from UNI’s accounts to pay for Defendant’s personal credit card bills; (d) spending approximately $6,000 of UNI’s money for liposuction; and (e) unaccountably withdrawing tens of thousands of dollars in cash from UNI’s accounts for Defendants personal spending.”
To make things more confusing, at least one person claiming to be a recent former employee of Registerfly in the customer support office in Miami posted on Registerflies that “Kevin seems to think HE is doing no wrong, with an office full of people ‘doing things’ – supposedly answering support tickets – and really thinks the bad guys are Glenn and John.”
One has to ask: where is ICANN in this mess? ICANN’s mission as stated on its web site “is ensuring the stability of the Internet’s system of assigned names and numbers.” This would seem to fall under its purview. A number of unhappy Registerfly customers have stated that ICANN needs to step in, remove Registerfly’s accreditation, and start getting domain names transferred out of Registerfly’s clutches and moved to other registrars.
Until recently, however, ICANN has been saying that it does not have jurisdiction. So far it insists that this is a matter that belongs between the registrar and its customers. Frank Fowlie, ICANN Ombudsman, specifically stated in his blog that his office does not have any jurisdiction. He made an analogy of the fact that “General Motors can’t help you if you received poor service at the local gas station.”
On February 21, ICANN finally issued a Notice of Breach to Registerfly. The ten page PDF details exactly what Registerfly has done (or failed to do) to put it in violation of its accreditation agreement, and gives the company 15 working days to clean up its act "or termination of Registerfly's accreditation agreement may be given..." It's interesting to note that Registerfly even burned ICANN out of its fees; in October 2006, it owed more than $100,000 to ICANN, with more than $40,000 of it more than 90 days past due. While Registerfly has made good on a substantial portion of the fees, more than $5,000 remains outstanding and is overdue by more than 60 days.
The history of complaints and the back and forth between Registerfly and ICANN goes back at least two years if not more. It seems strange that ICANN should wait so long. Some of the stories on the Registerflies web site about businesses destroyed because of Registerfly's internal issues are downright heartbreaking. No one will come out of this smelling like a rose; Registerfly will almost certainly go bankrupt. Even if the registrars that are stepping into the breach to offer Registerfly customers cheap transfers of domain names (MyDomain and Go Daddy to name just two), the damage in many cases has already been done.
Many think that ICANN should have acted much sooner. While there are no easy solutions, perhaps a rethinking of who is responsible when there are domain name issues, and how quickly action should be taken, is in order. Be that as it may, the total meltdown of Registerfly and the attendant chaos in its wake stands as an indictment to the industry and a challenge to make sure, for the sake of those of us who make our livelihoods from online businesses, that something like this never happens again.
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