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BobbyDouglas -> RE: Free Domains with hosting accounts (11/8/2006 19:20:45)
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I sent this question over to a friend who runs a domain reselling service (somewhere around 2,000 resellers),
It sounds like it comes down to whatever is stated in the contract... Here's his response:
quote:
It's a gray area for the domain registration question. A domain is legally
considered a piece of property, according to the case law history and
various court decisions. Thus, a domain can be treated just like a piece of
land or a car, etc.
For example, a business might offer you a free cell phone with your
contract. But if you cancel your contract, they take the phone back or
charge you "extra" for it, or whatever.
With regard to the law, the same thing can happen with a domain.. Although
in reality it's much more difficult to enforce.
It all boils down to whatever contact the customer has "signed" with the
host. If the contract stipulates the domain is "free" with a 12 month
contract, then after 12 months, the domain might still belong to the host,
but be allowed to be used by the customer. Terms of the contract should be
clear to show who will own the domain after the contract is ended, just like
who owns a car after the lease is finished or a house after the mortgage is
done, or the cell phone after your 24-months are paid. :)
If the customer decides they don't like their contract and prefers not to
pay, then the host would be entitled to "keep" the domain name, assuming
that's specified in the contract.
I hope that makes sense.
The reality is that it's extremely difficult for a hosting company to "keep"
a free domain away from the customer, unless they are a small business and
have time to manage things like that in detail.
My understanding is that most large companies that give out a free domain,
put the domain into the name of the customer. If the customer doesn't stick
around or pay their bill or fulfill the contract, then they are sent off to
collections for the cost of the domain, plus extra to pay for the collection
process. That's big business for you.
Most small companies that give out a free domain, do it as a "loss leader".
They basically hope the customer keeps paying and staying as a customer,
since these smaller companies don't have relationships with the collection
companies, nor have the ability to risk their reputation by sending a
disgruntled customer to collection, etc.
and some more:
quote:
With a cell phone, the company has a one-time fixed cost, so it's pretty
straight-forward.
For a domain, the company must renew it every year. Usually what will
happen is the company will stipulate that they'll continue to pay for the
registration every year as long as the client is a customer. In this case,
the company typically "ownes" the domain and the contract is effectively an
agreement to allow the customer use of the domain. The legal precident for
this is clear -- whomever pays for the domain owns it. If the customer isn't
paying for it, then they don't have a legal claim to it.
Keep in mind that ICANN policy is not necessary legal. A policy is a
policy, but the law can be a separate thing altogether. Although usually
the law will uphold a policy and use it to judge who is right/wrong.
At the end of the day, the contract should be clear as to whom retains
ownership of the domain when the contract term is over. Most companies
don't include anything about this, because doing so would lock them into
whatever they wrote. It's easier for a company to cry ignorance later, once
some customer challenges them.
But generally, whomever pays for it owns it. I would never never never
never recommend anyone use a domain for their business if it's "free" with a
hosting account. :)
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