No they pay now. At the time the fees were billed as a way of expiring unused domains, if you didn't pay, after a while they'd delete the domain.
It didn't work out that way exactly once the company realized how much money they could make.
I'm still kicking myself for not registering some names. But at the time it was all ethical and you were not supposed to register something unless you actually needed it.
Similar to that is the impression between people who know each other that is not ethical to do a similar software business. I assume this is more valid between programmers than in any other industry because people involved are more often more nice. But I suppose someone will live to understand that this is wrong to assume.
