Dear Working Group members, Please see below the notes from the meeting on 15 October 2019. 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/2019-10-15+New+gTLD+Subsequent+Pro.... Kind regards, Julie Julie Hedlund, Policy Director Notes and Action Items: Actions: Implementation Guideline F: If there is contention for strings, applicants may...iii) [the ICANN Board may be used to make a final decision, using advice from staff and expert panels.] Place in brackets and return for further discussion. Notes: 1. Updates to Statements of Interest: No updates provided. 2. Review of summary documents: a. Auctions: Mechanisms of Last Resort -- See: https://docs.google.com/document/d/15S_sUuP_gmKqba26tU9kYQ8mVF76W_3CSl4raxSg..., page 8 -- Change title to string contention mechanisms of last resort. -- Material from the Supplemental Initial Report. -- Policy Goals: The WG is largely supportive of existing Implementation Guideline F below. -- 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 and; iii) the ICANN Board may be used to make a final decision, using advice from staff and expert panels. -- Not sure if we need item iii) above. In 2012 the expert panels made the decision. If we keep it we could say “ICANN Board may use outside expert panels to make community priority determinations”. -- Could it be the case that the Board would be involved in the appeals mechanisms? What’s the harm of keeping the Board in a role? Suggest keeping it in. -- If we keep it the way it’s worded there is some expectation for a Board role. In 2012 the Board had no role in making the final decision. -- Example of various dependencies between sections. Don’t have a sense that we have finalized the discussions on the appeal mechanisms. Need to keep it in until we finalize related discussions. -- Qualify (iii) subject to recommendations regarding the new appeals mechanism.
 -- Pretty much every section would have that qualification. -- Seems that the appeals mechanism basically states that the evaluation happens at the panel level. The Board didn’t get involved in 2012 unless it was an accountability mechanism. Hesitant to get the Board involved. -- ACTION: Keep the language bracketed and return for further discussion. High-level Agreements * There should be additional options for applicants to voluntarily resolve contention sets by mutual agreement before being forced into an ICANN auction of last resort. * Do we add Vickrey Auction? -- Added the second bullet -- seemed that there was a lot of support for the Vickrey Auction option. Outstanding Items: Maintaining auctions of last resort within the New gTLD Program -- Agreement: BRG, Neustar, some RySG members, IPC (conditional on greater flexibility for private resolution) --Divergence: GAC (auctions of last resort should not be used to resolve contention between commercial and non-commercial applications), ALAC (opposes mechanism used in 2012, prefers a different option, see additional comments below), BC (Auctions of last resort should be eliminated, since it mostly benefits companies with deep pockets and negatively affects applicants from developing nations. Instead of auctions, there should be an inclusion of a request for proposals (RFP) process that advantages Community-based applicants, minority supported applicants, or other factors yet to be determined. BC also expresses support for Vickrey Auction as an alternative). Fairness of mechanism of last resort * Belief that auctions of last resort are inherently unfair (ALAC, some RySG members) * Does not believe auctions of last resort are inherently unfair (BRG, IPC, Neustar, NCSG) Mechanisms to make auctions more “fair” and other considerations of “fairness” * Multiplier for certain types of applications/applicants (e.g., Global South) * Placing limits on the number of auctions an applicant can participate in -- Only NCSG supported the second option. -- What mechanism could be used to implement that option? It would be difficult to enforce. Could be why there isn’t much support. -- How do we distribute these new TLDs if one applicant requests thousands. -- Don’t think we can say that the commenters cumulatively say there is a problem. -- If there is a problem and we don’t have a different way of solving it then we are kind of stuck. -- Some of that was discussed with the new ideas for types of approaches to the way the Auctions ran last round, with the closed bids etc.,that were discussed
; the Mechanisms of last resort options might be critical here Other measures to enhance “fairness” -- IPC: Take a broad view of what constitutes fairness. -- Neustar: Make sure that in creating the new rules we don’t create unfairness to others. -- RySG: Goes more towards when the sealed bids are submitted and revealed, as opposed to fairness. Other members caution balancing fairness and competition. -- NCSG: Consult with auction specialists. -- If we do keep auctions, then the big issues are 1) type 2) multiplier for certain groups. Other types of auctions/other resolution mechanisms -- Vickrey auction got some support: -- Several comments were supportive of the Vickrey model, but not of the proposal to require bids at the time of application submission. -- This is a sealed bid auction. -- Don’t think we have agreement on the timing of when the bids would be submitted or revealed. -- The WG would need to make some sort of recommendation of when bids are submitted and when revealed, and whether there is a multiplier. -- If we put in a multiplier, the ALAC option seems worth considering: ASP: Applicants that have qualified for support under the Applicant Support Program (ASP) but subsequently enter into a contention set for their applied-for string after having failed the voluntary resolution route could have their secret bid automatically upgraded by a fixed multiplier (such as factor of 1.5) (eg. such an applicant’s bid of US$400,000 is automatically deemed as US$600,000 when eventually ‘revealed’ in a Vickrey auction). -- Question: Did we look at whether a qualified Applicant Support application should simply WIN a string contention set? This seems to be a really contrary concept. -- Question: Was the Vickrey Auction put out as an option in the Supplemental Initial Report? Yes, it was. Comments came back in response to the proposal. -- Isn’t allowing applicants to work together to resolve the issue the same as an auction? We’ll be looking at options for private resolutions next. -- If we have a Vickrey Auction and people have to bid upfront, and an application fees, and high refunds, people will put in multiple applications to game the system. -- I think if sealed bids were to be placed only when contention set is established then the identity of applicants should not be revealed before sealed bids are put in. -- There is a balance to be considered -- having the application fee amount kept reasonably high is one way of discouraging affiliated party applying for same string. -- Multiplier issue: the ALAC has the most narrow proposal -- a multiplier feature for those that qualify for applicant support. When the WG initially discussed this if someone applied for applicant support there was concern about applications that didn’t have anything to do with the developing country/circumstances. -- Unless applicants which prevail in ASP gets priority like those who win CPE, then ASP qualifiers will still need to participate in auctions if they fall in a contention set. So a multiplier is intended to help such applicants level the playing field against richer applicants. -- No comments from auction providers on multipliers. -- Timing of bid or when revealed seems arbitrary at the moment -- maybe identify the objectives the WG is trying to achieve. Or maybe the WG doesn’t need to determine the details, could be determined in implementation. Might be helpful to set those foundational building blocks. -- If we do select an option that should go out for public comment. -- Identities of parties participating in auctions should not be revealed before sealed bids are put in UNLESS it is necessary to establish which applicants can enjoy a multiplier privilege. -- I think we need to think/talk through the timing of bids some more. There are some things that bids at application solve that we haven't touched on. Next Meeting: Continue on the Vickrey auctions topic on the next call.