The rapid expansion of the Internet has given birth to a lucrative
new business -- registration of internet domain names, such as
"books-dot-com." A new squad of entrepreneurs known as cybersquatters have
rushed to register names of everything from products to cities, so they can
sell the right to use those names to the companies that need them for their
websites. RFE/RL correspondent Nikola Krastev looks at how the lack of
regulation and awareness in Eastern Europe makes the region a prime target
Prague, 11 July 2000 (RFE/RL) -- U.S. authorities have
been cracking down on cybersquatting. But the practice of registering many
Internet domain names and then selling them is poorly regulated in Eastern
Europe and the former Soviet Union.
Desirable domain names, particularly those that end in "dot-com," can
sometimes command astronomical sums. One bogus attempt to auction the
address "year2000.com" fetched a bid for 10 million dollars before it was
called off. One sale that was not bogus was "if.com" -- the seller of that
name eventually pocketed a check for over 1 million dollars.
Internet domain names in the countries of the former Eastern bloc
cannot perhaps command such large amounts of money, but some of them
certainly whet the appetites of the individuals and companies known as
What's in a name? Potentially a lot of money.
Cybersquatting is the practice of registering desirable or thought to
be desirable domain names with the intention of selling them later for a
According to one estimate by Jupiter Communications, at the end of
1999, approximately 98 percent of the words in the English language had
been registered as domain names.
In most countries of the former East bloc, the Internet is still a
young medium. Laws governing Internet use and registration of domain names
are also in their infancy, so the line between legality and illegality is
In some countries, Internet laws have been devised with clearly
political intentions, as appears to be the case in Tajikistan. In other
countries, the rules are liberal but the costs are prohibitive -- as in
Moldova, where the annual fee for a domain name is close to 300 dollars.
Guntis Barzdins from the internet registrar office in Riga said that
in Latvia, there have been no major incidents of cybersquatting so far. He
said his office will not allow a well-known name, such as Microsoft, to be
registered in Latvia as microsoft.lv by someone who has no connection with
the Microsoft company.
Dragomir Slavov is the manager of Digital Systems, the internet
registrar in Bulgaria. He said cybersquatting has the potential to be a
real problem in Bulgaria.
"There is a serious pressure for speculation with internet names,"
Slavov said. "This is normal in the beginning of the internet development
in the country. Some people want to speculate with internet names, to
register names of world famous brands with the intention of later
blackmailing the legitimate owners. Our rules hamper such attempts."
The most desirable domain names for cybersquatters to buy up are the
widely recognized brand names, such as Coca-Cola, Ford, Adidas, or
geographical names like Moravia, Kyiv, or Sofia. Most such names have
already been registered -- but not all of them have been registered by the
companies or cities themselves.
For instance, the domain names sofia.net, krakow.org, brno.com or
zagreb.net all feature a small picture of a sea beach along with the
greeting "Welcome to our future website." These addresses are just a small
chunk of a bigger collection of domain names reserved by Marcel Stencel, a
self-described entrepreneur from California.
At least 37 domain names of large cities in Eastern Europe and the
former the Soviet Union are registered to Stencel, but none has a
functioning website. Stencel said he has reserved these addresses for
"future use." He said the addresses will be developed as free email
providers or, in his words, "something like that."
He said he is undeterred by the competition such sites would face from
well-established free email sites such as Hotmail. He said, "Competition is
good, and then, you know, it's then for the users to choose whether they
want an email address like x-y-z at hotmail.com or x-y-z at yahoo.com or
x-y-z at, whatever, other names we could provide for them possibly. Some
people will want to have hotmail and some will have yahoo and some will
want to have a city name."
Stencel said he has not yet begun to develop any websites on the
names he has registered. "Well, we are just so far we have only started out
by getting ready, by first having the possibility to later on apply our,
our, you know, plan. But it has not yet, of course, been implemented in any
If Stencel does not develop websites on the domain names he has
registered, he could certainly find a market to sell them. In Kyiv, for
example, if a new internet service provider company were to start up there,
a logical name for it to choose would be www.kiev.net. Such a company would
have to buy that name from Stencel.
Slavov of Bulgaria's Digital Systems, which screens people who try to
register names, said that approximately 1 in 10 requests for registration
in Bulgaria are speculative. In one recent case, he said, a
well-established Western company expanding its business in Bulgaria
complained that its trademark had been registered and that the registrant
was asking for a 20,000 dollar fee.