> However, we can now only assume Ubuntu 12.04 (Precise) installs with
the default proxy setting of 'auto', thus creating this bug.

no, the default config for that key is 'none' ... you maybe changed it
in the proxy config of system settings? it says that "web proxy
autodiscovery" is used if the field is let empty

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https://bugs.launchpad.net/bugs/1018806

Title:
  GVFS does not resolve to FQDN or IP address

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