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Florida resident Chris McElroy has launched a class action lawsuit against Network Solutions LLC and the Internet Corp. for Assigned Names and Numbers (ICANN), alleging Network Solutions “immediately registers for itself any domain name that consumers provide to Network Solutions in order to determine whether the domain name is available.”

ICANN’s status as a defendant is justified due to its “acquiescence, tacit approval and participation” in allowing domain registrars such as Network Solutions to register names without having to pay a fee to ICANN, according to court papers. While ICANN itself does not register domains, it serves as the governing body for several Internet-related functions, including assigning domain names and IP addresses, the complaint continues.

McElroy goes on to claim Network Solutions blocks consumers from registering the domain name through any of its less-expensive competitors, and that the name “is now held exclusively by Network Solutions – who is now offering to sell the domain name to anyone willing to pay its grossly inflated fee.”

Not quite, according to Network Solutions. While spokesperson Susan Wade would not comment on the litigation aside from acknowledging that her company had been served with the complaint, she indicated that the process McElroy described is part of an effort to protect consumers from “front running” and “tasting” – having domain names they search for reserved by unaffiliated parties.

Here’s how it works, according to Wade: A consumer queries Network Solutions (or any accredited domain name registry) regarding a desired domain name. In turn, the registration services queries a variety of other registration services to see if the name is available, whether in the .com, .net. .tv or any other suffixes. At that point, the registration service lets the consumer know which URLs are available.

But outside unscrupulous operators, suspecting that these queried domain names might already be attracting some clicks, puts a claim on them, which it can do for five days without having to pay anything, Wade said. (ICANN established this five-day hold practice to give consumers a chance to decide whether to purchase the domain.)

These outside individuals then throw a bunch of click-through ads on the sites, Wade continued. They note which sites get clicks, and then hop from one domain registration service to the next every four days, claiming these domain names, putting ads on them and earning revenue from them without having to actually pay for the domains.

In a few instances, they may actually ransom the domains back to the original inquirer for substantial sums, Wade said. But more often than not, these operators are harvesting vast numbers of queried URLs and using them to post their ads. This practice, according to Wade, is known as “front-running.”

How do operators know which domain names to harvest? Not through Network Solutions, said Wade, who suspects – but doesn’t have evidence – that it is done through automated processes involving non-accredited registration services.

What Network Solutions is doing is registering the names for a four-day period to avoid having these unscrupulous operators start a series of rolling four-day periods in which they monopolize desirable or high-traffic domain names without having to pay for them. “Likewise, we’re not placing any advertisements on these domains to monetize their traffic while they are in the reservation period,” Wade said.

Separately, ICANN has proposed implementing a 20-cent fee for holding a domain name, a surcharge which, according to Wade, will make automated harvesting of queried names unprofitable.

Network Solutions collects a $34.99 annual fee for domains registered through it. The crux of McElroy’s lawsuit, however, is that other domain registration firms don’t charge as much. In particular, GoDaddy.com offers domains for $9.99 per year – but once a domain has been queried on Network Solutions, GoDaddy lists it as unavailable, with the current owner being Network Solutions.

Based on the court papers, McElroy is unaware of Network Solutions’ policy of eventually releasing the domain name.

McElroy’s case was filed in the U.S. District Court for the Central District of California.