Jeff, This answer is a bit confusing. There are many matters for which Leadership has said that if Consensus is not reached, we fall back to the 2012 AGB. This response introduces the notion that if no Consensus is reached, we give the issues to the IRT. So could you please elaborate as to when the WG will be obliged to (1) fall back to the 2012 AGB or (2) agree on goals alone, but delegate to the IRT? Thank you, Anne From: Jeff Neuman <jeff.neuman@comlaude.com> Sent: Tuesday, January 14, 2020 6:54 AM To: Austin, Donna <Donna.Austin@team.neustar>; Aikman-Scalese, Anne <AAikman@lrrc.com>; Julie Hedlund <julie.hedlund@icann.org>; gnso-newgtld-wg@icann.org Subject: RE: Notes and Action Items - New gTLD Subsequent Procedures PDP WG - 13 January 1500 UTC [EXTERNAL] ________________________________ Donna, Thanks for this. To answer your question, the purpose of spending so much time on the goals is to serve as a tool for us to measure potential mechanisms of last resort to handle string contention. Ultimately, it would be great if this could help us pick one recommended solution. But, at the end of the day, if we are unable to gain consensus on that one recommended mechanism, the goals would then serve to guide a subsequent implementation team to help select a mechanism. We hope that makes sense. Jeff Neuman Senior Vice President Com Laude | Valideus D: +1.703.635.7514 E: jeff.neuman@comlaude.com<mailto:jeff.neuman@comlaude.com> From: Gnso-newgtld-wg <gnso-newgtld-wg-bounces@icann.org<mailto:gnso-newgtld-wg-bounces@icann.org>> On Behalf Of Austin, Donna via Gnso-newgtld-wg Sent: Monday, January 13, 2020 8:20 PM To: Aikman-Scalese, Anne <AAikman@lrrc.com<mailto:AAikman@lrrc.com>>; Julie Hedlund <julie.hedlund@icann.org<mailto:julie.hedlund@icann.org>>; gnso-newgtld-wg@icann.org<mailto:gnso-newgtld-wg@icann.org> Subject: Re: [Gnso-newgtld-wg] Notes and Action Items - New gTLD Subsequent Procedures PDP WG - 13 January 1500 UTC Anne, all I had a few ideas about how to address goals #3 and #4, but I also went back to the Implementation Guidance that states what an applicant may do in order to resolve a contention set, but is silent on what an applicant may not do and I wondered if we could overcome some of our concerns if we addressed this. For example, what if we included something along the following lines: Implementation Guideline F: If there is contention for strings, applicants may: i) resolve contention between them within a pre-established timeframe ii) if there is no mutual agreement, a claim to support a community by one party will be a reason to award priority to that application. If there is no such claim, and no mutual agreement a process will be put in place to enable efficient resolution of contention; iii) Applicants are expected to engage in string contention resolution in good faith and should not engage in practices with other applicants in the contention set, or interested third parties, that manipulate the outcome of the string contention to their exclusive benefit. iv) the ICANN Board may be used to make a final decision, using advice from staff and expert panels. Then replace Goals 3 and 4 with something along the following: v) Reduce the risk/potential of applicants bidding/paying inflated prices for strings. This could be due to other applicants or third parties engaging in unfair practices intended to manipulate the outcome of a contention set resolution; or requiring applicants to decide the market value of the string absent relevant information. I also want seek clarification on the purpose of the goals that we are discussing. Is the intent to inform or assist us in coming up with a recommendation for contention resolution, particularly as it relates to private auctions or is it something different? Donna From: Gnso-newgtld-wg [mailto:gnso-newgtld-wg-bounces@icann.org] On Behalf Of Aikman-Scalese, Anne Sent: Monday, January 13, 2020 8:42 AM To: Julie Hedlund <julie.hedlund@icann.org<mailto:julie.hedlund@icann.org>>; gnso-newgtld-wg@icann.org<mailto:gnso-newgtld-wg@icann.org> Subject: Re: [Gnso-newgtld-wg] Notes and Action Items - New gTLD Subsequent Procedures PDP WG - 13 January 1500 UTC Re Goal # 4, I wanted to propose compromise language: “to reduce the risk of bad faith applications, i.e. applications made for purposes of profiteering and/or speculation, especially as it relates to financial transactions” ….etc etc etc.” Anne From: Gnso-newgtld-wg <gnso-newgtld-wg-bounces@icann.org<mailto:gnso-newgtld-wg-bounces@icann.org>> On Behalf Of Julie Hedlund Sent: Monday, January 13, 2020 9:39 AM To: gnso-newgtld-wg@icann.org<mailto:gnso-newgtld-wg@icann.org> Subject: [Gnso-newgtld-wg] Notes and Action Items - New gTLD Subsequent Procedures PDP WG - 13 January 1500 UTC [EXTERNAL] ________________________________ Dear Working Group members, Please see below the notes from the meeting on 13 January at 1500 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/2020-01-13+New+gTLD+Subsequent+Procedures+PDP<https://urldefense.proofpoint.com/v2/url?u=https-3A__community.icann.org_display_NGSPP_2020-2D01-2D13-2BNew-2BgTLD-2BSubsequent-2BProcedures-2BPDP&d=DwMGaQ&c=MOptNlVtIETeDALC_lULrw&r=CwipU91YB6EkpFXK9ynnT_QUef4yC5p7jpsDm8cU97g&m=aBlrtpZqjldhToX6unNVCTUJxYEZnEJ8Kv0YOOVnhB8&s=1pvNVqQetnFphF4kiiXXuYTPJvBMidRqohBbiqe5FgA&e=> Kind regards, Emily Notes and Action Items: Actions: Goal #3: Reduce the risk of “bidding wars” in which the winner ultimately overpays for the TLD. a. Tentative, related goal for discussion: encourage applicants to bid their true value for a TLD. ACTION ITEM 1: Bracket language change -- delete text up to: “Encourage applicants to bid their true value for a TLD”. Goal #2: if there is no mutual agreement, a claim to support a community by one party will be a reason to award priority to that application. If there is no such claim, and no mutual agreement a process will be put in place to enable efficient resolution of contention ACTION ITEM 2: Proposal to change #2: If there is no such claim, and no mutual agreement a[N AUCTION] process will be put in place to enable efficient resolution of contention” Goal #4: Reduce collusion, profiteering, and/or speculation, especially as it relates to financial transactions external to the program (Note, while this is not an explicit goal for the mechanisms of last resort, it has been discussed as a motivation for altering the auction mechanism). ACTION ITEM 3: Add “reduce the risk” and insert before “collusion…”. ACTION ITEM 4: Add a new goal #11: “applications should not be submitted as a means to engage in private auctions, including for the purpose of using private auctions as a method of financing their other applications.” Notes: 1. Updates to Statements of Interest: -- Susan Payne: I am now a member of the IRP-IOT. officially this happened in November but the re-populated group is now having its first meeting this week. 2. String Contention Mechanisms of Last Resort: https://docs.google.com/document/d/16qDoiK6vydQp6a0v9tMvU2l5fcypJY24hCzTIVTjKwk/edit?usp=sharing<https://urldefense.proofpoint.com/v2/url?u=https-3A__docs.google.com_document_d_16qDoiK6vydQp6a0v9tMvU2l5fcypJY24hCzTIVTjKwk_edit-3Fusp-3Dsharing&d=DwMGaQ&c=MOptNlVtIETeDALC_lULrw&r=CwipU91YB6EkpFXK9ynnT_QUef4yC5p7jpsDm8cU97g&m=aBlrtpZqjldhToX6unNVCTUJxYEZnEJ8Kv0YOOVnhB8&s=a3q3cC3k-LSUHnq-2VO76ITsJ71Xmug0x8nNv3p4o04&e=> Goals: 1. resolve contention between them within a pre-established timeframe* 2. if there is no mutual agreement, a claim to support a community by one party will be a reason to award priority to that application. If there is no such claim, and no mutual agreement a process will be put in place to enable efficient resolution of contention 3. Reduce the risk of “bidding wars” in which the winner ultimately overpays for the TLD. a. Tentative, related goal for discussion: encourage applicants to bid their true value for a TLD. 1. Reduce collusion, profiteering, and/or speculation, especially as it relates to financial transactions external to the program (Note, while this is not an explicit goal for the mechanisms of last resort, it has been discussed as a motivation for altering the auction mechanism). 2. Increase transparency. 3. Resolve contention more quickly. 4. Increase predictability. 5. Encourage new entrants into the field. a. Which could include, making it easier to implement “multipliers” for certain types of applicants, such as those eligible for Applicant Support. 1. Increase efficiencies in application evaluation by way of understanding the contention set? 2. Increase creativity in the resolution of contention sets. [Underlying question - do we want to encourage private resolution of contention sets?] Note that some of the terminology may need to be further defined if the above goals are adopted. In order to ensure that recommendations align with goals, it is important for the Working Group to agree on specific objectives. Discussion: -- Need to think about prioritization. -- Item #1 is still agreed upon, so #2 is up for discussion. -- #4 re: “collusion” -- need to define it and why it isn’t a good thing. What does "collusion" mean? How does it vary from creative problem solving by enlightened companies that don't buy into the "enrich ICANN" orthodoxy? -- Clearly we have goals that are in conflict with each other, but also how we are thinking about this is in conflict. We want to resolve things and we want creativity, but we don’t always like the results (“innovation” versus “gaming”). -- We need to think through what these are, where they come from, and where ICANN gets the legitimacy to sell these. -- We should also talk about whether we deem these as quasi-public assets then does it follow that the only way out of a contention set is to enrich ICANN, or whether we can use creative problem solving. -- Statement of ICANN Board: "Request information on likelihood and types of abuse resulting from new procedures: One of our major concerns in reading the discussions in the Supplementary Final report relates to new procedures that may be open to abuse in ways that have not yet been understood. We would like to better understand the analysis that has gone into determining the likelihood, and types, of abuse that may open up with any new procedures. We believe that any new recommendations should guard against bad faith applications to the extent possible. These concerns mostly center on the issues of auctions of last resort and on private auctions. . . We also take note of the abuse that becomes possible in alterations to the change request mechanisms.”(https://mm.icann.org/pipermail/comments-new-gtld-subsequent-procedures-supp-initial-30oct18/2018q4/000002.html<https://urldefense.proofpoint.com/v2/url?u=https-3A__mm.icann.org_pipermail_comments-2Dnew-2Dgtld-2Dsubsequent-2Dprocedures-2Dsupp-2Dinitial-2D30oct18_2018q4_000002.html&d=DwMGaQ&c=MOptNlVtIETeDALC_lULrw&r=CwipU91YB6EkpFXK9ynnT_QUef4yC5p7jpsDm8cU97g&m=aBlrtpZqjldhToX6unNVCTUJxYEZnEJ8Kv0YOOVnhB8&s=dBxmr3GVhJ68exx1sk5kEwirvcGlrznwNWMVxvOIZQs&e=>)" -- Need to address the perception that if ICANN allowed private auctions for the next round some applicants might participate just to make money. -- When we talk about someone profit or speculate on a TLD, if you go to a private resolution then you need to have more than one party. -- Regarding question 2.7.4.e.2 on “gaming” or abuse of private auction, the Board believes that applications should not be submitted as a means to engage in private auctions, including for the purpose of using private auctions as a method of financing their other applications. This not only increases the workload on processing but puts undue financial pressure on other applicants who have business plans and financing based on their intention to execute the plan described in the application. In particular, we are concerned about how gaming for the purpose of financing other applications, or with no intent to operate the gTLD as stated in the application, can be reconciled with ICANN's Commitments and Core Values. https://mm.icann.org/pipermail/comments-gtld-subsequent-procedures-initial-03jul18/attachments/20180926/a3fc7066/2018-09-26CherineChalabytoCLOandJeffNeumanBoardCommentonSubproInitialReport2-0001.pdf<https://urldefense.proofpoint.com/v2/url?u=https-3A__mm.icann.org_pipermail_comments-2Dgtld-2Dsubsequent-2Dprocedures-2Dinitial-2D03jul18_attachments_20180926_a3fc7066_2018-2D09-2D26CherineChalabytoCLOandJeffNeumanBoardCommentonSubproInitialReport2-2D0001.pdf&d=DwMGaQ&c=MOptNlVtIETeDALC_lULrw&r=CwipU91YB6EkpFXK9ynnT_QUef4yC5p7jpsDm8cU97g&m=aBlrtpZqjldhToX6unNVCTUJxYEZnEJ8Kv0YOOVnhB8&s=o3l0k7ElU1V0RWsVPyH34qzytY0SmaJhxB0jAMLnaM8&e=> -- Like the idea of having a list of options if someone wants to go to private resolution -- expanding options. -- COMMENT: To the degree that public comment did NOT support elimination of private negotiations to resolve string contention, we aren't really in the realm of "public assets" in our policy work and we must, however, try to eliminate "gaming' without taking away private negotiations. Submitting sealed bids at the time of application seems appropriate, but if there is a Community Priority Application or if there is a Intent-To-Object is filed, then the bids should be able to be revised because the value of the TLD is different in terms of costs the applicant is facing. -- If private resolution results in $$$ changing hands instead of funding some community agreed upon ICANN function (Like Root zone governance or RIRs) It does affect everyone. We have an opportunity to bolster ICANN’s effectiveness and legitimacy. -- But no one had to apply to start with. The funds are not an ICANN entitlement. -- The program should not be a means for ICANN to profit from the program either. We have agreed that the program is intended to be cost-recovery. -- Need to get back to the theory before we start talking about mechanisms. There seems to be varying points of view. -- The only mechanism that got support in the comments was an auction. Ultimately we ended up with auctions as the preferred mechanism for resolving contention sets. -- Question: How restrictive is the comment from the Board (see above)? Answer: This was a comment, but not meant to be an official Board position. We asked all the groups to comment. -- Don’t think current auction proceeds report is relevant to this discussion. -- Look at what we are trying to achieve. -- In that Board comment to the supplemental report they parsed out private auctions that they had concerns about. This WG had parsed out private auctions version other private resolution mechanisms. Are we lumping together all private resolutions in this discussion? Specific Goals: Goal #3: Reduce the risk of “bidding wars” in which the winner ultimately overpays for the TLD. a. Tentative, related goal for discussion: encourage applicants to bid their true value for a TLD. -- Any resolution that involves some sort of payment there is the implication that is somehow wrong -- relates to goal #3. There may have been overpayment in the previous round, but the value of the TLD is arguably what someone is willing to pay for it, which depends on all sorts of factors, including not allowing someone else to have it (that risk). -- Is there anyone that things that #3 should stay as a goal? Support to remove it as a goal; support to keep it. -- Concern with the Vickrey model -- could potentially have someone overpay since an applicant may not have enough information to make a value judgment. -- Remove the first part about overpaying and keep “Encourage applicants to bid their true value for a TLD”. That language keeps to the spirit of not up-bidding in auction to get a bigger payout as the loser -- How about we encourage "realistic value"? -- Why would an applicant not bid/pay a "true" or "realistic" value? I don't understand. Either bid/pay what you think it's worth or not. -- How do you decide what the true value is? It’s only known to the applicant. What is the consequence if someone pays what someone else thinks is excessive? ACTION: Bracket language change -- delete text up to: “Encourage applicants to bid their true value for a TLD”. Goals #1 and #2: 1. resolve contention between them within a pre-established timeframe* 2. if there is no mutual agreement, a claim to support a community by one party will be a reason to award priority to that application. If there is no such claim, and no mutual agreement a process will be put in place to enable efficient resolution of contention Goal #1: -- Re: “pre-established timeframe” -- not sure there was one in the previous round. -- Once every application in the contention set passed all of the hurdles then ICANN said that they would start auctions in X days if there was no resolution, but parties could request extensions. Applicants in a contention set were notified when an auction was scheduled - they could also request to postpone. -- Agree that this is still a goal. Goal #2: -- Comments supported auctions as a mechanism with some limitations. ACTION: Proposal to change #2: If there is no such claim, and no mutual agreement a[N AUCTION] process will be put in place to enable efficient resolution of contention” Goal #4: Reduce collusion, profiteering, and/or speculation, especially as it relates to financial transactions external to the program (Note, while this is not an explicit goal for the mechanisms of last resort, it has been discussed as a motivation for altering the auction mechanism). -- Substitute “bid-rigging” for “collusion”? -- Collusion is a secret cooperation or deceitful agreement in order to deceive others, although not necessarily illegal, as is a conspiracy. A secret agreement between two or more parties to limit open competition by deceiving, misleading, or defrauding others of their legal rights, or to obtain an objective forbidden by law typically by defrauding or gaining an unfair market advantage is an example of collusion. It is an agreement among firms or individuals to divide a market, set prices, limit production or limit opportunities. -- But do we agree that "collusion" means illegal/improper practices and not "private settlement". If we don't agree that then we need a different term instead of "collusion. -- Reduce the risk of profiteering should be a separate goal from collusion and/or speculation." -- Any reference to "Exclude" or "reduce" collusion will be a problem because private resolutions are PRIVATE and this is going to open up a whole mess of issues. -- Creative applicants will find a way to resolve their contention at any point, but sealed bid cuts most of the opportunity for “unseemly cooperation”. I am not sure "horse trading" is actually a form of collusion - not if private resolution is permitted. However, we should develop policy to deter application for purposes of resale and profiting from that resale - in other words, that is bad faith. -- Not sure what “collusion” means here. It means something different to different people. -- Just want to note that Board did not use the terms 'collusion' or 'profiteering' in its comment. ACTION: Add “reduce the risk” and insert before “collusion…”. Goal #5: Increase transparency. -- That goal is there in order to stop private auctions. -- When we talk about different models of auctions we need to be clear what we mean by “transparency”. -- Question: Are we talking about transparency in negotiations or in outcomes? Answer: We were focused on outcomes. -- Is it possible for the program to impose such transparency requirements? Goal #6: Resolve contention more quickly. -- Potential dependency of timing of future rounds. -- Resolving contention more quickly will require all prior elements of the application process (i.e. evaluations, objections, etc) to also move more quickly. -- If we have predictability and transparency, resolution of contention sets arguably would be quicker. -- Could state that the period in which parties in a contention set can resolve this situation can only be extended X number of times. -- In the previous rounds most contention sets moved fairly expeditiously, so maybe we could say, “resolve contention expeditiously”. Goal #7: Increase predictability. -- This is still a goal. Goal #8: Encourage new entrants into the field. Which could include, making it easier to implement “multipliers” for certain types of applicants, such as those eligible for Applicant Support. -- Still important to encourage new entrants. -- 8a looks like an implementation detail. Regardless of policy or implementation, this WG has jurisdiction to cover both should we choose to. -- Need to better define “new entrants” so as to not simply introduce subsidiaries of existing players. ACTION: Add a new goal #11: “applications should not be submitted as a means to engage in private auctions, including for the purpose of using private auctions as a method of financing their other applications.” Start at Goal #8 for the next meeting. Go through the goals and then see what mechanisms fit within those goals. Then we will prioritize. ________________________________ This message and any attachments are intended only for the use of the individual or entity to which they are addressed. 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