GoDaddy’s Bob Parson even invents a new term for traffic testing: Domain Kiting. Here’s a brief summary of the coverage:

• Bob Parsons: 35 million names registered in April. 32 million were part of a kiting scheme. A serious problem gets worse.
• In Bad Taste by John Levine
• How Kiters and Snappers Suck the Air Out of ICANN (email battles)

The main focus of the public concern is linking traffic testing to the price increase proposed in the settlement agreement between ICANN and Verisign.

Bob Parsons: 

Here’s why I chose to call it domain kiting. All of us are familiar with the illegal practice of check kiting. Quite simply check kiting involves taking advantage of timing and the banking system to generate cash that simply isn’t there. In many ways that is what domain kiting does. Domain kiting takes advantage of timing and the domain name system in an abusive and improper way to generate cash. 

There is one difference. The registrars that participate in this testing do have to float the amount of money needed to cover the registrations at the registry. While they do receive a refund for the names that are deleted within the 5 day grace period, the money is under the registry’s control. (He does mention this in this article, but I would like to underline the point that the money is under the registry’s control at this point.)
Bob Parsons

After a domain name is registered, a registrar has five days to cancel a domain name registration – i.e. drop the name – and get their money back. Domain kiting registrars abuse this rule and cancel the lion’s share of the names they register just before the five day period expires – so they get their money back. But then something unexpected happens. After names are cancelled or dropped, the domain kiting registrar goes out and immediately registers the same names again. The domain kiting registrar will then put the same simple Web site back up for each domain name, wait another five days and then cancel all the names again — just in time to get a full refund.

By doing this, the registrars do in a way put the money on the line, since it is held by the registry. Obviously this is more than the usual everyday traffic testing.

I imagine that this debate has not yet ended.

Let’s end this with a quote from Karl Auerbach:

As we see from the numbers, the actual cost (ed. per domain name registration) to Verisign is about $0.02 or less.  That does not seem to warrant the $7, or 35000% profit, that ICANN is allowing Verisign to charge.