ICANN (the Internet Corporation for Assigned Names and Numbers, the non-profit organization that oversees the management of domain names and IP address assignments) recently made an announcement that they were initiating steps to eliminate “domain tasting”.

What is “domain tasting”? According to ICANN, it’s “the use of the Add Grace Period to test the profitability of a domain name registration. The AGP is a five-day period following the initial registration of a domain name when the registration may be deleted and a credit can be issued to a registrar.”

So, someone can buy a domain name, test it out online, and if it proves not to be a very effective domain name, nullify the purchase and receive his or her money back. Apparently a widespread problem in the Internet business world, ICANN feels that the practice must be stopped in order to keep the online business playing field level for everyone.

“Domain tasting has been an issue for the Internet community and ICANN is offering this proposal as a way to stop tasting,” said Dr Paul Twomey, ICANN’s President and CEO. “Charging the ICANN fee as soon as a domain name is registered would close the loophole used by tasters to test a domain name’s profitability for free.”

AGP was originally introduced by registries so registrars could avoid costs if a domain name was mistyped or misspelled during the registration process. It is part of the .com, .net, .org, .info, .name, .pro, and .biz registry contracts.

Tasting has been a serious challenge for the Internet community and has grown exponentially since 2004. In January 2007 the top 10 domain tasters accounted for 95% of all deleted .com and .net domain names — or 45,450,897 domain names out of 47,824,131 total deletes.

The proposal will be part of the ICANN budget process for the fiscal year starting 1 July 2008. The early draft version of that budget will be released for and discussed at ICANN’s New Delhi meeting later this month. After public discussions of this proposal and other budget issues, the proposed budget will be released for addition discussions by 17 May 2008 and be voted on at the board meeting to be held during the ICANN meeting in Paris in June. ICANN accredited registrars representing two-thirds of fees collected will be asked to approve the proposal.

This is all from ICANN’s recent press release on the subject. The question that some industry observers are asking: Is “domain tasting” really that serious a threat? Does it cost ICANN that much money? Is it possible that this is a way to eliminate a consumer safety net and thereby maximize cash flow into ICANN? Is it really hurting the online business world to allow people to test out domain names before purchasing them? Or do the problems perhaps go deeper than that? We can’t offer judgment on that here, but anytime regulations such as this are altered, it’s worth taking note of, at the very least.

To read ICANN’s official press release on the topic, please click here.