This is subject to ICANN approval, and has not yet been approved.
It is still in discussion - and many registrars have problems with this.
Here is the conflict of interest that seems to concern most registrars who are showing concern:
o) Customer A owns the domain sex.com
o) Customer B want it, so he takes out a reservation on it
o) If Customer A renews the domain, the Registry gets $5. The Registrar gets $5. The Reseller gets $5.
o) If Customer A does not renew the domain, the Registry gets $40, the Registrar gets $15 and the Reseller gets, well probably nothing.
If the customer does not get his renewal email, and fails to renew, did the Registrar work hard enough to see that the customer was notified? What was his motivation to do so.
Today, domains expire and they are dropped. The drop process needs to be formalized, but ICANN can do this with the stroke of a pen.
Today, dropped domains are available on a first come, first served basis and there are many competitive options for grabbing dropped domains - including simply random chance at any domain registrar on the Internet.
The method being proposed by VeriSign in partnership with SnapNames, gives them a further monopoly on dropping domains, and is worth many tens of millions of dollars a year.
One of their arguments for this method is that the current method slams their servers during "drop times" when companies like ExpireFish and SnapNames are trying to get in to get a dropping domain. There are plenty of technical approaches to limiting the server load that can be employed without having to give VeriSign a complete monopoly on the dropped domain market.
If you care to voice your opinion, drop on over to icann.org and poke around some.
-t
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