For me as a web developer, this is pretty disturbing news. There is really nothing stopping them from doing this to any and all of the domains they hold, extorting the owners as described below. Scum, scum, scum.
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There were previous reports of [a href="vny!://godaddy.com/"]GoDaddy[/a], one of the biggest domain name registrars, [a href="vny!://m-ook.com/post/1/411"]attacking Bittorrent sites[/a] with frivolous interpretation of their own Terms of Service (that story was resolved), and now similar events unfold with clients of one of Russian domain registrars [a href="vny!://majordomo.ru/"]Majordomo.ru[/a] .
GoDaddy has informed them that all 1399 client domains [a href="vny!://www.cnews.ru/news/line/index.shtml?2006/06/15/203651"]are now blocked[/a] (story in Russian) due to 'many of your domain names were [a href="vny!://majordomo.ru/about/letter.htm"]listed in the Spamhaus.org blacklist or were resolving to a name server or IP address listed in the Spamhaus.org blacklist[/a]' with a demand of a neat '$199 non-refundable administration fee to the credit card on file for your account for each domain name you wish to reactivate' or $50 for each domain to be transferred out into another registrar.
I'm all for fighting spam, but given how unreliable spam black-lists are such actions simply damage the internet. Instead of affecting people that use spam lists to control the inflow of mail to some degree, all users are effectively forced to be black-list clients. Now all one needs to shut down a site is a few reports of spamming, and the domain (or even better, all domains of a given small registrar) will be suspended.
Once we allow domain registrars to become the Spam Police, very soon there will be political pressure for them to become the Content Police. It starts with spam and kiddie pron -- content that 99.999% of the world agrees is wrong. I guarantee it won't stop there.
The most scewed-up thing about this story is not the blocking of 1399 (!) domains, but the fact that fact they CAN be reactivated, if only you pay 199$ (!!) for "administration fees". This is not about policing the internet, it's about squeezing more money out of their customers. If this guy pays up, what prevents them from doing the same shit all over again 2 years from now?