Last week, in the aftermath of the BrisConnections saga, the Australian Domain Name Administrator (auDA) announced that it had terminated Australia’s latest corporate hero/villain Nick Bolton’s domain registration business, Bottle Domains, due to a “serious” breach of the registrar agreement. That breach was related to a failure to report a network intrusion and the subsequent stealing of tens of thousands of user accounts in 2007.

But not one to go quietly, Bolton and Bottle Domains have sought and won an injunction to stop the termination and, in the process have created a situation which may end up bringing down the regulator as we know it.

Part of the problem is that Bottle’s 20,000 domain name customers have already been told by auDA that they are no longer Bottle customers, only to be told by auDA days later that that decision has been reversed (after the successful injunction application) – and may be reversed yet again pending Wednesday’s court battle.

Even competitors have come out and criticised the auDA’s actions.

Netregistry CEO and co-founder Larry Bloch explained the situation in detail:

The turmoil in domains has caused confusion among domain holders - mostly businesses - as well as those companies reselling Bottle’s services. We have already received many calls from confused customers asking for help and clarification, and many resellers have already transferred their business to us, unable to wait for the outcome of the court proceedings. This leaves auDA exposed to pay significant damages should the de-accreditation be permanently overturned by the courts, as much of the damage to Bottle is irreversible, regardless of the legal outcome. What that means for auDA financially - which runs a tightly balanced budget - and how a bankrupt administrator would impact the entire Australian domain industry, is anyone’s guess.

Bloch also believes that, contrary to the auDA’s statement, there was a link between the timing of the termination announcement and all the news surrounding Bolton and BrisConnections:

auDA would not normally gain mainstream publicity for its activities, but with Nick Bolton already being pilloried in the press, it not only provided an easy media story but automatically cast Bolton as the villain and Disspain and auDA as the white knight providing a come-uppance. This alleged security breach has been under investigation for months now, so the timing of the announcement is extremely curious at best.

When it comes to apportioning blame for the mess, Bloch doesn’t hold back either:

Chris Disspain of auDA has acted as judge, jury and executioner by cancelling Bottle Domains’ accreditation so suddenly, and this action is now proving to be grossly negligent.

When a company comes out and heavily criticises the deregistration of a competitor, you know that the regulatory body has probably made a massive error in judgment - one that has the potential to affect the whole industry.

Some time on or after Wednesday, a decision will be handed down that may have wide-ranging implications for the local domain registration environment.

Love him or hate him, there’s no doubting that Bolton knows how to make an impact. Should be fun to see how this one plays out.