Dear all

Just to note that the GAC, through its consensus input of September 29^th 2020, reiterated longstanding views which are very critical with private auctions, I quote:

● “Auctions: Mechanisms of Last Resort/Private Resolution of Contention Sets: Topic 35 in Draft Final Report

While the GAC acknowledges that, in an attempt to reduce potential gaming,  the PDP WG recommendation 35.3 includes the need for applications to be submitted with a “bona fide” intention to operate a TLD, the GAC recommends further discussion on how this intention will be ensured and implemented, and notes that punitive measures for non compliance or submission of a “bona fide” intention are not sufficiently defined. The GAC expresses concerns on whether the “bona fide” intention and Contention Resolution Transparency Requirements sufficiently answer the ICANN Board concerns relative to the permission of private resolutions (including auctions) as a mechanism to resolve string contention.

Regarding Auctions of Last resort, the GAC reaffirms its view that they should not be used in contentions between commercial and non-commercial applications, and reiterates that private auctions should be strongly disincentivized.”

Kindly

Jorge

Von: Gnso-newgtld-wg <gnso-newgtld-wg-bounces@icann.org> Im Auftrag von Jim Prendergast
Gesendet: Mittwoch, 13. Januar 2021 23:47
An: gnso-newgtld-wg@icann.org
Betreff: [Gnso-newgtld-wg] Challenge to designation on Recommendation 35.2

Cheryl and Jeff

Thanks for the call yesterday explaining the process by which you made consensus designations.  I appreciated the tremendous effort that went into this exercise.

Purpose of this email is to challenge the designation of Recommendation 35.2 which is currently deemed Consensus.  While I may refer to determinations for recommendations, it is not my intent to challenge those with this email. 

For reference, 35.2 reads as follows

Recommendation 35.2: Consistent with the Application Change processes set forth under Topic 20: Application Change Requests, the Applicant Guidebook (AGB) must reflect that applicants will be permitted to creatively resolve contention sets in a multitude of manners, including but not limited to business combinations or other forms of joint ventures and private resolutions (including private auctions).

• All private resolutions reached by means of forming business combinations or other joint ventures resulting in the withdrawal of one or more applications are subject to the Application Change processes set forth under Topic 20: Application Change Requests.

• Any materially modified application resulting from a private resolution will be subject to a new operational comment period on the changes as well as a new period to file objections; provided however, objections during this new period must be of the type that arise due to the changing circumstances of the application and not merely the type of objection that could have been filed against the surviving application or the withdrawn applications in the contention set during the initial objection filing period.

•All contention sets resolved through private resolution shall adhere to the transparency requirements set forth in the Contention Resolution Transparency Requirements in the relevant recommendation.

My challenge touches on the following points – inconsistency of determinations between recommendations and Leadership’s desire to preserve other parts of the recommendation. 

Inconsistent determinations

In discussing the determination to classify recommendation 35.4 as Strong Support but Significant Opposition, Leadership talked about the number comments received, the diversity of those comments and a consultation of public comments.   Further examination shows that the majority the 11 comments on the consensus call came from members of the IPC which should not surprise anyone as they also filed a public comment on this.  The only other comment on this recommendation was a support of the IPC response to Public Comment by PETILLION Law Firm, an IPC member.  The balance of the consensus call comments came from individuals, RySG members and an ALAC member.

Compare that to the comments that came in on 35.2.  While there may not been the same number of emails that came in on 35.4, you had more diversity than what was accepted for 35.4.  There were consensus call responses from individuals as well as members of the ALAC, RySG, and the GAC. In the public comments, you had opposition to Private auctions from the following ICANN SO/AC/SGs

• Non-Commercial Stakeholder Group - “…we support the move to set aside private actions.” “Private auctions should simply be banned, and other solutions such as Vickrey auctions and “sealed bid, second price auctions” through the ICANN-run auction process should be adopted for the fairness and integrity of the auction process.”
• Business Constituency - "As we said in 2018, the BC recommends that private auctions be eliminated.”
• At-Large Advisory Committee - The ALAC remains concerned about efforts to “game” the application process, in part, through the use of private auctions. We disagree with the SubPro WG recommendation to allow them and believe that attempts to determine “good faith” will ultimately be little more than window dressing. Further, the proposed “sealed bid, second price auction” compromise, while superior to the status quo, represents a highly watered down version of the far superior traditional Vickrey auction. The ALAC implore the working group to revisit the prohibition of private auctions and implement a true Vickrey auction solution.”

When asked if leadership had consulted these responses to the public comments, we were told that unless someone from one of those SO/ACs/SGs specifically replied on the consensus call, they were not consulted.  By that standard, the opposition from the Business Constituency and the NCSG was ignored and not used to calculate the designation. 

This discounting of a comment from a SO/AC/SG is especially troubling because as many in this this working group have said, as an individual, we cannot speak for an SO/AC/SG but when the SO/AC/SG does speak, like the NCSG, BC and ALAC have, it should carry weight. Many of us also know how difficult it is to get a diverse group of voices within an SO/AC/SG to agree to submit a statement on behalf of the entire group.  To hear these were not considered is disappointing.

Leadership’s desire to preserve other parts of the recommendation

During our discussion, I agreed with Leadership’s assertion that there was not opposition in spirit to the ability to settle contention sets via “private resolution” which could include joint ventures and other arrangements as well as all the other provisions included in the recommendation.  But the drafting of the recommendation and the inclusion of “and private resolutions (including private auctions)” poisons the entire recommendation. 

I understand the desire of leadership to not have to discard what are very good recommendations but in response to leadership’s direction to be very specific, people were specific in their opposition to private auctions and not to the entire recommendation.  If WG members had known that we had to object to the entire recommendation, as opposed to being specific, the responses would have been different. I fear that in a desire to preserve the rest of the recommendation, leadership is discounting the opposition to Private Auctions.  While understandable, that potential bias cannot stand.

Thanks for your consideration.

Jim Prendergast

The Galway Strategy Group

jim@galwaysg.com

+1 202-285-3699

@jimpren