Dear Working Group members, Please see below the notes from the meeting on 17 August at 15:00 UTC. These high-level notes are designed to help WG members navigate through the content of the call and are not a substitute for the recording, transcript, or the chat, which will be posted at: https://community.icann.org/display/NGSPP/2020-08-17+New+gTLD+Subsequent+Pro.... Kind regards, Julie Notes and Action Items: Actions: 1. “Can’t Live With” Comments on the new draft report section on Auctions: Mechanisms of Last Resort & Private Resolution of Contention Sets (Including Private Auction): Re: “Applicants may mark portions of any such responses as “confidential” if the responses include proprietary business information and such portions will not be shared or communicated by the Evaluator [or ICANN as appropriate].” ACTION ITEM: Delete text (shown via strikethrough) in “Applicants may mark portions of any such responses as “confidential” if the responses include proprietary business information and such portions will not be shared or communicated by the Evaluator.” Add to the AGB terms and conditions section that confidentiality provisions that apply to ICANN should apply to only those who have a need to know including any third party contractors providing dispute or appeals services.” Re: “The potential non-exhaustive list of “Factors”...” ACTION ITEM: Change to “ [that ICANN may consider whether an application was submitted with a bona fide intention to operate the gTLD]” and add in “[The WG discussed the following] potential non-exhaustive list of “Factors”. Put all factors out for public comment. Re: “If an Applicant applies for [four] [five] [four] or more strings...” ACTION ITEM: Put “five” and “four” in brackets. Re: “If an applicant is awarded a top-level domain and sells [attempts to sell] [assigns] the TLD (separate and apart from a sale of all or substantially all of its non-TLD related assets) within (1) year, this may be a factor considered by ICANN in determining non-good faith intent for that applicant.” ACTION ITEM: Figure out a way to put all of the suggestions in brackets for public comment. Also include a question “on applicable penalty in the event of absence of bona fide intent i.e. where there are no other credible explanations for the existence of listed factors, and if not, why not?"” Re: [Additional text proposed by Elaine Pruis: If an applicant with multiple applications resolves contention sets by means other than private auctions and does not win any TLDs.] ACTION ITEM: Include in the list of factors for public comment. Re: “At the end of the String [Similarity] Evaluation period, Applicants in contention sets will be informed of the number of other applications in their contention set, but no other information regarding the other applications will be shared.” ACTION ITEM: Change to “At the end of the String Similarity Evaluation period, Applicants in contention sets will be informed of the number of other applications in their contention set, but no other information regarding the other applications will be shared. All applicants that wish to compete for their applied-for string in an ICANN Auction of Last Resort must submit a sealed bid for each relevant application (“Last Resort Sealed Bids”). Any applicant that does not submit a sealed bid [or withdraw a sealed bid] at this time will be deemed to submit a bid of zero.” Add “Failure to timely submit a sealed bid will result in disqualification to participate in the Auction of Last Resort if held." Re: “[Justine Chew suggested making the following edits (in bold) to the previous bullet point: To the extent any contention sets are shrunk, by having other applications removed from the process (e.g., withdrawal, losing objections, failing evaluation, Community Priority Evaluation identifying only Community-based Applications which prevailed, etc.), applicants will NOT be allowed to adjust their sealed bids. However, in the event of a partial resolution of a contention set through the formation of a business combination or joint venture and the corresponding withdrawal of one or more Applications, the remaining Application AND each of the other existing applications in the contention set will be allowed, but are not required, to submit a new Last Resort Sealed Bid]” ACTION ITEM: Accept the edits suggested by Justine Chew. Re: “auction of last resort” ACTION ITEM: Change to “ICANN Auction of Last Resort”. Make consistent throughout. Re: “Once payment is received [within the specified time period], the applicant may proceed to the Transition to Delegation.” ACTION ITEM: Accept the text in brackets. Re: “ [five (5) business days] of resolution and ICANN must, in turn, publish the same within 72 hours [three (3) business days] of receipt. This includes:” ACTION ITEM: Keep “72 hours” and see what comments come in. Re: “Protections for Disclosing Applicants: Except as otherwise set forth in the transparency requirements above, no participant in any private resolution process shall be required to disclose any proprietary information such as trade secrets, business plans, financial records, or personal information of officers and directors unless such information is otherwise required as part of a standard [normal] TLD application.” ACTION ITEM: Change “standard” to “normal”. Re: “The information obtained from the contention resolution process may not be used by ICANN for any purpose other than as necessary to evaluate the application, evaluate the New gTLD Program, or to otherwise comply with [applicable] law.” ACTION ITEM: Add text in brackets “applicable”. Re: “The Working Group discussed a number of possible alternatives to auctions of last resort for resolving contention [sets],” and “Therefore, the Working Group affirms the use of auctions as a method of last resort to resolve contention [sets],” ACTION ITEM: Adopt the change. Re: “By requiring all applicants to agree to the bona fide use clause, [some in] the Working Group believe...” ACTION ITEM: Adopt the change. Re: “Finally, some in the Working Group remain concerned that the practice of leveraging financial gains in one private auction to resolve other contention sets has not been addressed adequately. [A proposal that would have required sealed bids for private auctions submitted at the same time, which would have prevented the rolling of funds from one auction to another, was discussed but agreement was not possible.]” ACTION ITEM: Adopt concept, making clear that the proposal came from those that were concerned. Re: “Rationale for Implementation Guidance xx (Rationale 3): The Working Group believes that second-price, sealed bid auctions are preferable to the ascending bid auctions used in the 2012 round [ICANN Auctions of Last Resort],” ACTION ITEM: Adopt the change – including the bracketed text. Re: “[Susan Payne proposed adding the following paragraph: Some in the Working Group have argued that requiring submission of sealed bids for auctions of last resort before the identity of the identity of other Applicants is known fails to recognize that the value of a TLD to an Applicant may be different depending on who the other potential owners of the TLD are and that applicants should know all the facts available when determining what is an appropriate level to bid.]” ACTION ITEM: Include additional text from Susan Payne – and in following sections. Re: “Rationale for Implementation Guidance xx (Rationale 4):” ACTION ITEM: Adopt the suggested text in brackets. 2. Draft Final Report Change Analysis – Questions Highlighted in Yellow ACTION ITEM: Add the questions from the WG discussions on 17 August with respect to private resolutions – implications of not having a bona fide intent (Justine Chew’s comments). 4. Public Comment Survey Tool – Draft PDF ACTION ITEM: Staff will send the PDF of the survey form and the WG will have 24 hours to ask questions on the format (not the content). See the attached PDF. NOTE: This is only a draft; the final survey tool will be updated with the questions resulting from the meeting on 17 August, as well as to correct any possible typos. Note also that the format of the actual survey will differ slightly from the format of the PDF. Notes: 1. Updates to Statements of Interest: No updates provided. 2. “Can’t Live With” Comments on the new draft report section on Auctions: Mechanisms of Last Resort & Private Resolution of Contention Sets (Including Private Auction): https://docs.google.com/document/d/1ShY7lL07QrFKIDZybdGceXXvb_hmKGHI3qE9bxgDQOo/edit#<https://docs.google.com/document/d/1ShY7lL07QrFKIDZybdGceXXvb_hmKGHI3qE9bxgDQOo/edit> -- start at page 2 Re: “Applicants may mark portions of any such responses as “confidential” if the responses include proprietary business information and such portions will not be shared or communicated by the Evaluator [or ICANN as appropriate].” JP9.4: Jim Prendergast proposed deleting the highlighted text. Rationale: "Similar to my previous point, evaluators are temporary hires. Once the evaluators are done evaluating, what information does ICANN have in order to be able to enforce bona fide intent long-term? If the “Factors” are a suspicion that the applicant didn’t meet that intent, and the evaluators are gone, who is going to raise that concern if ICANN hasn’t seen those concerns." -- Need to control the scope of sharing or build into terms and conditions. -- Those that do reviews should have access to certain information, but not sure that applies to confidential info. -- Looking at the last AGB, confidentiality clause. -- Might need language for the public comment period. -- Who at ICANN would be on the “need to know” list? -- Then let's limit Evaluator disclosure to ICANN to only those who need to know. Problem fixed. -- Wonder if this should be a general term & condition instead of specific to private settlement outcomes? -- Don’t think we should let the applicant designate anything it wants to be confidential. -- The AGB determines what is or isn’t confidential. -- Responses to public questions are never confidential. Responses to non-public questions are always confidential. The others are specified in their contexts. -- Amount of compensation would be confidential, but a change in the board would not be confidential as it isn’t deemed to be by the AGB. ACTION ITEM: Delete text (shown in strikethrough) in “Applicants may mark portions of any such responses as “confidential” if the responses include proprietary business information and such portions will not be shared or communicated by the Evaluator.” Add to the AGB terms and conditions section that confidentiality provisions that apply to ICANN should apply to only those who have a need to know including any third party contractors providing dispute or appeals services.” Re: “The potential non-exhaustive list of “Factors”...” -- Discussion on email, put out for public comments and include “potential” before Factors. -- Get rid of “non-good faith intent” – we are taking about bona fide intent. -- Make the factors Implementation Guidance that the IRT can consider. -- But still put out for public comment – but structure it that these are a potential list of factors that members of the WG discussed. Put them all in and see what comes back in public comment and decide after reviewing comments to either include as policy or Implementation Guidance. -- But my primary comment is "that ICANN may consider in determining whether or not an Applicant had a bona fide intention to operate a...” -- What about asking what are the consequences if the factors aren’t met? ACTION ITEM: Change to “ [that ICANN may consider whether an application was submitted with a bona fide intention to operate the gTLD]” and add in “[The WG discussed the following] potential non-exhaustive list of “Factors”. Put all factors out for public comment. Re: “If an Applicant applies for [four] [five] [four] or more strings...” EP9.1: Elaine Pruis proposes changing "five" to "four." Rationale: "Half of five is 2.5. Use a number that is divisible by 2 and results in a whole number. ACTION ITEM: Put “five” and “four” in brackets. Re: “If an applicant is awarded a top-level domain and sells [attempts to sell] [assigns] the TLD (separate and apart from a sale of all or substantially all of its non-TLD related assets) within (1) year, this may be a factor considered by ICANN in determining non-good faith intent for that applicant.” JC9.2: Justine Chew suggested changing "sells" to "attempts to sell" and also stated "Please include a request for input on penalty for identified occurrence of “no bona fide intent”." Rationale: "• An attempt to sell just the TLD is a better and more timely identifier of intention since “sells” implies an aftert-the-fact event. We should try to “catch”an intention as early as possible. Are we not asking the community for input on applicable penalty in the event of absence of bona fide intent i.e. where there are no other credible explanations for the existence of listed factors, and if not, why not?" ACTION ITEM: Figure out a way to put all of the suggestions in brackets for public comment. Also include a question “on applicable penalty in the event of absence of bona fide intent i.e. where there are no other credible explanations for the existence of listed factors, and if not, why not?"” Re: [Additional text proposed by Elaine Pruis: If an applicant with multiple applications resolves contention sets by means other than private auctions and does not win any TLDs.] EP9.3: Elaine Pruis proposes adding the bracketed text as a new bullet in this list. Rationale: "If ICANN isn’t privy to the material terms of settlements, some resolutions could purposely lose without any money changing hands or business combinations being made. Captures possible “paid (not necessarily in cash) to go away” settlements." ACTION ITEM: Include in the list of factors for public comment. Re: “At the end of the String [Similarity] Evaluation period, Applicants in contention sets will be informed of the number of other applications in their contention set, but no other information regarding the other applications will be shared.” “[Donna Austin proposed alternative text to the previous sentence: All applicants in a contention set will be required to submit a sealed bid for each application in a contention set at this time. This sealed bid will only become relevant if the contention set is resolved through an ICANN Auction of Last Resort. (“Last Resort Sealed Bids”).]” DA9.1: Donna Austin proposed replacing previous bullet with bracketed text. Rationale: "If it’s only applicants that wish to compete for their applied-for string in an ICANN Auction of Last Resort that submit a sealed bid at this point in the process, at what point would applicants who intend to resolve the contention set through private resolution, but end up in a contention set resolution via an ICANN Auction of Last Resort submit their sealed bid? It was my understanding that if one applicant in the contention set opts for the ICANN Auction of Last Resort that negates the preference for private resolution of all the other applicants in the contention set. " -- At what point do the others in the contention set know that it will be resolved by an ICANN auction of last resort and when do they submit their sealed bids? -- Change to: “Any applicant who wishes to contest the contention should submit a sealed bid, which will be held on file in case of an auction of last resort.” -- Any applicant who has not submitted a bid at this point in time will be deemed to have submitted a bid of zero. -- Also make it explicit that at this point an applicant can withdraw from the contention set. -- This is not the AGB. The team that writes the AGB can fill in these details. -- Add "Failure to timely submit a sealed bid will result in disqualification to participate in the Auction of Last Resort if held." ACTION ITEM: Change to “At the end of the String Similarity Evaluation period, Applicants in contention sets will be informed of the number of other applications in their contention set, but no other information regarding the other applications will be shared. All applicants that wish to compete for their applied-for string in an ICANN Auction of Last Resort must submit a sealed bid for each relevant application (“Last Resort Sealed Bids”). Any applicant that does not submit a sealed bid [or withdraw a sealed bid] at this time will be deemed to submit a bid of zero.” Add “Failure to timely submit a sealed bid will result in disqualification to participate in the Auction of Last Resort if held." Re: [Phil Buckingham proposed alternative text to the previous sentence: All applicants on finding themselves in a contention set (on Reveal Day) must submit an additional private ICANN last resort sealed bid for each application ( Last Resort Sealed Bids) within 7 days (in the event that the contention set ends up being resolved by the Final ICANN auction of Last Resort , after all other options have failed). ] PB9.2: Phil Buckingham proposed replacing the previous sentence with bracketed text. Rationale: "Agree with Donna’s comment . We cannot have a situation ( as happened last time) whereby only one applicant refused to go to a private auction and thereby forced an ICANN last resort takes all auction. Have Added a time limit when it needs to be done. " -- Radically different from what the WG has discussed. Could be submitted as a comment in the public comment period. Re: All applications shall be evaluated and are subject to other application procedures (e.g., Initial Evaluation, Extended Evaluation, Objections, GAC Early Warning/Advice, Community Priority Evaluation).” CT9.6: Question from Christa Taylor: "'How are the needs of Applicant Support applicants being considered? i.e. date of the auction, deposit, education, etc.? These references in the process should be included." -- Don’t think any of this changes. It is a good question in terms of communication plans. Re: “all applicants (including both the existing members of the contention set as well as the new members) will be allowed, but are not required, to submit a new Last Resort Sealed Bid.” JP9.5: Jim Prendergast proposed eliminating the opportunity for new bids and forcing parties to rely on previously submitted bids. Rationale: "As I have pointed out, the proposal as written falls short in addressing Board concerns with gaming. The submission of new bids provides more gaming incentives. While waiting for the string confusion objections to come through on this contention set, the applicant could be losing other contention sets in the meantime and building up a bigger bid for this set. Instead of preventing this behavior, allowing new bid submissions actually expands the opportunity for this activity. " -- Good to file a comment on this. Re: “However, in the event of a partial resolution of a contention set through the formation of a business combination or joint venture and the corresponding withdrawal of one or more Applications, the remaining Application AND existing members of the contention set will be allowed, but are not required, to submit a new Last Resort Sealed Bid.” CT9.5: Christa Taylor suggested adding a reference an LOI which can be provided to ICANN as evidence. Rationale: "Confusing. If applicants enter into a JV or business combination before the TLD is acquired, all parties will be able to submit a new bid provided that one applicant has withdrawn their application? This is difficult to do without first acquiring the asset." -- Add “or the intention of forming a business combination”? -- Christa will check for the reference. Re: “[Justine Chew suggested making the following edits (in bold) to the previous bullet point: To the extent any contention sets are shrunk, by having other applications removed from the process (e.g., withdrawal, losing objections, failing evaluation, Community Priority Evaluation identifying only Community-based Applications which prevailed, etc.), applicants will NOT be allowed to adjust their sealed bids. However, in the event of a partial resolution of a contention set through the formation of a business combination or joint venture and the corresponding withdrawal of one or more Applications, the remaining Application AND each of the other existing applications in the contention set will be allowed, but are not required, to submit a new Last Resort Sealed Bid]” JC9.3: Justine Chew suggested making the edits in bold to the paragraph above. Rationale: "• An attempt to account for possibility of CPE limiting only Community-based applications which prevailed which can proceed to an auction. Just avoiding use of the phrase “existing members of the contention set” and making it clear that each of the other existing applications may submit a new bid. (word-smithing)" -- These aren’t substantive changes. Only for clarity. ACTION ITEM: Accept the edits suggested by Justine Chew. Re: “auction of last resort” DA9.2: Comment from Donna Austin: "I believe that where ‘auction of last resort’ is used we mean ICANN Auction of Last Resort. Rather than use the terms interchangeably it would be best if the same term can be used for consistency and remove possibility for confusion." ACTION ITEM: Change to “ICANN Auction of Last Resort”. Make consistent throughout. Re: “Once payment is received [within the specified time period], the applicant may proceed to the Transition to Delegation.” JC9.4: Justine Chew suggested adding the bracketed text, and additional new bullet in brackets. Rationale: "• A time limit for payment needs to be mentioned. Query: Is there a reason why we have not specified what would happen if an applicant which succeeded in an auction does not pay within the specified time period? Consequence suggested." ACTION ITEM: Accept the text in brackets. Re: “ [five (5) business days] of resolution and ICANN must, in turn, publish the same within 72 hours [three (3) business days] of receipt. This includes:” CT9.7: Christa Taylor proposed alternate timeframes (in brackets). Rationale: "72 hours does not provide the applicant with sufficient time to meet all of the settlement terms & conditions, legal agreements, funding requirements, share registrars, etc. No reference to working days. " ACTION ITEM: Keep “72 hours” and see what comments come in. Re: “Protections for Disclosing Applicants: Except as otherwise set forth in the transparency requirements above, no participant in any private resolution process shall be required to disclose any proprietary information such as trade secrets, business plans, financial records, or personal information of officers and directors unless such information is otherwise required as part of a standard [normal] TLD application.” JC9.6: Justine Chew suggested changing "standard" to "normal." Rationale: "Use of “a standard TLD application” – in the AGB “standard application” is specifically distinguished from “community-based application”, so we don’t mean to exclude any community-based applications from transparency requirements." ACTION ITEM: Change “standard” to “normal”. Re: “The information obtained from the contention resolution process may not be used by ICANN for any purpose other than as necessary to evaluate the application, evaluate the New gTLD Program, or to otherwise comply with [applicable] law.” JC9.7: Justine Chew suggested adding the word "applicable." Rationale: "Word missing?" ACTION ITEM: Add text in brackets “applicable”. Re: “The Working Group discussed a number of possible alternatives to auctions of last resort for resolving contention [sets],” and “Therefore, the Working Group affirms the use of auctions as a method of last resort to resolve contention [sets],” JC9.8: Justine Chew suggested adding the word "sets" after "contention" ACTION ITEM: Adopt the change. Re: “By requiring all applicants to agree to the bona fide use clause, [some in] the Working Group believe...” JP9.6: Jim Prendergast proposed adding the bracketed text. Rationale: "There wasn’t broad agreement in the WG that this effort fully mitigated concerns." ACTION ITEM: Adopt the change. Re: “Finally, some in the Working Group remain concerned that the practice of leveraging financial gains in one private auction to resolve other contention sets has not been addressed adequately. [A proposal that would have required sealed bids for private auctions submitted at the same time, which would have prevented the rolling of funds from one auction to another, was discussed but agreement was not possible.]” JP9.7: Jim Prendergast proposed adding the bracketed text. Rationale: "I think its important to mention the group considered sealed bid proposal as a viable solution to this practice but could not reach agreement." -- In the dependent clause change "which would have" to :"which may have" or just strike the dependent clause as the commentary on the deliberations that it is. ACTION ITEM: Adopt concept, making clear that the proposal came from those that were concerned. Re: “Rationale for Implementation Guidance xx (Rationale 3): The Working Group believes that second-price, sealed bid auctions are preferable to the ascending bid auctions used in the 2012 round [ICANN Auctions of Last Resort],” DA9.3: Donna Austin proposed adding the bracketed text. Rationale: "It’s unclear whether this refers only to ICANN Auctions of Last Resort or private resolution auctions—I have assumed ICANN Auctions of Last Resort, but it would be helpful if this is explicit." ACTION ITEM: Adopt the change – including the bracketed text. Re: “because [this method eliminates collusion and bid rigging; it is the preferred method used by governments to allocate critical resources; bidders are forced to value the TLD in absolute terms; and] second price auctions reduce the risk of “bidding wars” that can occur in ascending bid auctions.” EP9.5: Elaine Pruis proposes adding the text in brackets if Susan Payne's proposed text against second-price, sealed bid auctions is accepted/included. Rationale: "IF Susan Payne’s language arguing the counterpoints against second-price, sealed bid auctions is accepted/included, THEN the benefits of second-price, sealed bid auctions should be expounded upon in this section." -- Keep the original text. Re: “[Susan Payne proposed adding the following paragraph: Some in the Working Group have argued that requiring submission of sealed bids for auctions of last resort before the identity of the identity of other Applicants is known fails to recognize that the value of a TLD to an Applicant may be different depending on who the other potential owners of the TLD are and that applicants should know all the facts available when determining what is an appropriate level to bid.]” SP9.2: Susan Payne suggested adding a new paragraph. Rationale: "The text for this rationale implies that all in the working group support the whole of the recommendation. This is not the case, particularly with respect to the timing of bid submission. A number of WG members have pointed out that the value of a TLD to a bidding party can vary, depending on who else is in the contention set, and so do not favour bid submission being required before this information is available. Whilst this is not a view supported by everyone, the draft report does not currently reflect that there is this divergence. " ACTION ITEM: Include additional text from Susan Payne – and in following sections. Re: “Rationale for Implementation Guidance xx (Rationale 4):” ACTION ITEM: Adopt the suggested text in brackets. 3. Draft Final Report Change Analysis – Questions Highlighted in Yellow (which will be leveraged for the public comment proceeding): https://docs.google.com/document/d/17oV-BTJGtm2Q6w15qxqtsvRZg6PuW9WHGPOG1Kgs... ACTION ITEM: Add the questions from the WG discussions on 17 August with respect to private resolutions – implications of not having a bona fide intent (Justine Chew’s comments). 4. Public Comment Survey Tool – Draft PDF ACTION ITEM: Staff will send the PDF of the survey form and the WG will have 24 hours to ask questions on the format (not the content). 5. Schedule: -- Post for comment the Draft Final Report by 21 August. -- Begin meetings on 03 September. -- Close comment period at the end of September. -- Leadership will send a list of possible topics to discuss during the public comment period.