On 10 November, 2011 the .au Domain Administration Limited (auDA) implemented the recommendations of the Secondary Market Working Group, including removal of the prohibition on transfers within six months of registration and a more streamlined process for domain name transfers.1

The impact of auDA's policies on the domain aftermarket

The "secondary market" or "domain aftermarket" enables registered domain names to be bought and sold. Often, domain names in the secondary market are sold for large amounts – in some cases up to millions of dollars. However the .au secondary domain name market is relatively limited because auDA prohibits registration of a domain for the sole purpose of resale. To enforce this policy, auDA prohibits transfers of domains within six months of registration, unless the registrant has been granted special permission by auDA.

auDA's policies and procedures do not deal with the secondary market in detail, and as a result many parts of the market have developed their own procedures. For example, each registrar has different requirements regarding the documentation that a registrant must provide in order to transfer their domain name. Similarly, many registrars offer the service of drop-catching domains (registering a domain name as soon as it expires using software which polices the expiry and deletion date) but this service is generally not covered under auDA's policies.

The Secondary Market Working Group's recommendations

The Secondary Market Working Group was formed to look at the operation of the secondary market for .au domains from both a consumer and industry perspective. In particular it reviewed:

  • the six-month transfer prohibition,
  • the processes in place for transfer of domain names between registrants, and
  • the role played by drop-catching services.

The six-month transfer restriction

The Working Group noted that there was little evidence supporting the view that the six-month transfer restriction deterred illegitimate domain name registrations. The public submissions made to the Working Group agreed, noting the administrative burden imposed by the policy. As a result, the Working Group recommended the policy be removed.2

A mandated registrant transfer process

The Working Group also suggested that auDA mandate and publicise a "registrant transfer process" to ensure consistency and streamline the transfer process within the industry. This would also ensure that all registrars have similar processes for transferring a domain name, as well as performance benchmarks that they are required to meet.

Drop-catching policies

The Working Group recommended that auDA publish policies in relation to drop catching and work to ensure that the services can be used by the general public as well as domain name professionals.

auDA accepted all of the above recommendations, which have now been implemented.

Good news for consumers

The reforms are generally good news for consumers. The abolition of the six-month transfer prohibition will serve to reduce the administrative work required to transfer domain names in this period. Further, the creation of a "registrant transfer process" will standardise the registrar processes which relate to changing the registrant of a domain and reduce any confusion that currently exists.