Notes and Action Items - New gTLD Subsequent Procedures PDP WG - 02 December 2019
Dear Working Group members, Please see below the notes from the meeting on 02 December 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/2019-12-02+New+gTLD+Subsequent+Pro.... Kind regards, Julie Julie Hedlund, Policy Director Notes and Action Items: Actions: ACTION ITEM 1: Add a third alternative. ACTION ITEM 2: Add another goal (#7): “Increase efficiencies in application evaluation by way of understanding the contention set?” ACTION ITEM 3: Create a flow chart with a fictional string to show how alternative 1 would work. ACTION ITEM 4: Update the list of goals. Notes: 1. Review Agenda/Statements of Interest: Susan Payne was reappointed IPC Secretary for another year. 2. String Contention Mechanisms of Last Resort: https://docs.google.com/document/d/16qDoiK6vydQp6a0v9tMvU2l5fcypJY24hCzTIVTj... [docs.google.com]<https://urldefense.proofpoint.com/v2/url?u=https-3A__docs.google.com_documen...> What is the issue we are trying to address: -- The Working Group has discussed a number of potential issues with the mechanisms of last resort used in the 2012 New gTLD Round. These issues are captured in the Supplemental Initial Report. -- Although the Working Group ultimately believes that when there is string contention, an auction process should be used to select the Registry Operator invited to enter into a Registry Agreement with ICANN, the Working Group is still discussing what forms of private resolution should be allowed (if any), the specific type of auction to be used, and the timing of such an auction. Policy Goals / What the WG is Seeking to Accomplish: -- The WG is largely supportive of existing Implementation Guideline F: 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. Other goals include: 1. 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. . Which could include, making it easier to implement “multipliers” for certain types of applicants, such as those eligible for Applicant Support. -- 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: -- Do we still need iii)? An alternative may be, "The ICANN Board may use expert panels to make Community Priority Evaluation determinations." This may also be dependent on recommendations on the new appeals mechanism. -- ICANN Board says it does not make policy. Its decision would be subject to RFR and IRP - very messy so it may be better to stick with what we developed earlier. -- This isn’t about the Board making policy, but making it clear that it’s an auction process rather than the Board making a decision. -- There should be a reference instead to Auction of last resort. -- Agree they are good goals so suggest removing possible description What are we Proposing? -- The Working Group is leaning towards recommending a sealed-bid auction as the ultimate form of auction used as a mechanism to resolve string contention. When a sealed-bid auction is held where bids are submitted without knowing the bid of others in the auction (e.g., prior to evaluating any of the applications) it is also called a Vickrey Auction. A sealed-bid auction can also be used as a mechanism of last resort and at the end of the process. -- With a sealed-bid auction, each applicant submits a sealed bid, stating the amount that they are willing to pay for the TLD. The ultimate “winner” pays the amount submitted by the second-highest bidder.. -- Regardless of when the sealed bid auction is held, if there are one or more Community-based Applications, that/those application(s) would need to be processed first through Community Priority Evaluation before looking at the auction bids. Alternative 1 - Vickrey Auction (No Private Resolution) -- Addresses goals 1, 2, 4, and 6. -- The principle pro here is the seemingly near elimination of private resolution. However, the principle con is the substantial complications this approach introduces (see Additional Considerations, Mostly For Alternative 1 below). Other cons are that other forms of private resolution might be impacted (e.g., joint ventures, string change, etc.) in seeking to eliminate private resolution for financial benefit and that bids are submitted with no contextual information. Alternative 2 - Sealed-Bid Auction allowing Private Resolution -- It seems to be supportive of, or at least not impede, 1, 2, and 6, but in a less pronounced manner as it relates to Alternative 1; the maker of this Alternative has acknowledged that it does not fully address concerns around potential collusion and profiteering on application withdrawals. -- However, some benefits are likely derived by obtaining sealed bids (which can reduce the incentive for all parties to agree to private resolution, if an applicant already knows they have the highest bid). The other main pro here is simplicity - most other processes remain unaffected. Discussion: -- Re: Alternative 2: First bullet point and third bullet point seem incompatible. Third bullet point: “Applicants would still have an opportunity to resolve the contention set through other means such as private auction, a joint venture arrangement or to choose another string as was suggested for ‘brands’ of the same name.” -- Assuming you stayed in only those applicants who stayed in would be revealed on reveal day. So you could still have private resolution. -- For clarity, the third bullet could be swapped with the fourth bullet and add “post reveal day”. In third bullet point, after "opportunity", you would need to insert "after reveal day" or something to clarify that parties become known. -- Question: Wasn’t one of the proposals to outlaw private auctions? So not sure why we are still allowing private resolution. Answer: If we went with alternative 1 we would eliminate private resolution, but not for alternative 2. So that is one of the drawbacks with alternative 2. -- Thought alternative 2 was to allow participants to know how many contention sets there are. Add as a third alternative: Alternative three could remove some of the elements about private resolution. -- They may not resolve privately and should only have a limited period to resolve. If not resolved in a limited period, it should proceed to the sealed bid winner. I am not seeing the time limit in alternative 2 though. Is it there? -- Question: How would the timing work with a string contention objection process? -- How could private auctions be prevented? -- Objections should not be triggered until a winner (or a private resolution winner) is identified. -- Re: Alternative 2 there should be a limited time for private resolution. -- Helpful to put these alternatives out for public comment and indicate whether the WG has a preference. -- Re: Alternative 2 -- Question: For string confusion objections those would have to be heard right away. Additional Considerations: Public Comment: Comments from the public are solicited on all applications regardless of where they are placed in the queue. To do it otherwise would mean opening up separate public comment periods depending on whether there is a need to go to the second bidder, and that would be impossible to monitor. Discussion: -- Strongly support 1 public comment period, for the exact same length of time for all. -- Impractical to have multiple public comments. String Similarity Evaluation: Discussion: -- Don’t see how this fits with the notion of closed bids and timing. You have a scenario where you have some who know who they are bidding against and everyone else doesn’t. -- In the scenario where the result of a string similarity evaluation is that some would have insight into who is in the set -- this is an unfair result. -- Which is why getting every applicant to submit a bid at the point of application is something to consider, even though it may be cumbersome for many. -- What if this fact situation should default to sealed bid only? -- Why would they not be all announced at the same time? -- So we are proposing to treat some applicants differently from others? That does not seem to be in line with the Bylaws. -- Wouldn’t alternative 1 solve this issue? -- What about plurals? -- There was only one case in 2012 that was found to be similar (unicorn/unicom). -- Why string similarity evaluation after reveal day? Why not make it before reveal day? That is a possibility. -- is string similarity not subject to accountability mechanisms and appeals? would that not “reveal” it in some manner? -- Agree with that suggestion re string similarity evaluation occurring first and before reveal day. bids would have to be in before appeal. Objections: Objections on the highest bidder’s application must be filed within the objection period. With respect to objections to the other applications, ICANN would create a system for the filing of “an intent to file an objection.” Discussion: -- Question: What happens when someone indicates that they are filing a community objection and they are filing it against all of the applicants for a string. Answer: All applicants should have a chance to respond. Add text to relay your comment on "can indicate that an objection will apply to all applications for same string"? -- Objections should not come into full proceedings unless and until there is a winner - it's a huge waste of time and money if it does proceed but private parties need to know what the value of the string may be. -- Some concern about not having to submit the objections on a standard timeline, although support not engaging fees or panels until the objection is necessary, based on bidder ordering . -- “time” may benefit some as they build their case. Or could the “intent to file” require some key points that will be included in the objection filing? -- Question: We are agreeing on the principle that the intent to object is a good idea, but when would that happen? Would one party have to state the type of objection and the grounds? Could it just be a party filing very general intent to objection concerning a risk associated with that application. Would there be a panel for an intent to object process? Answer: Proposal was that the objection would be “bare bones”. There would be no panel if it was just an intent to object to one application, but if for all applications (to the string) then one could request a panel. You file your objection against the applicant first in the queue and an intent to file against the others in the queue. Or, you could say I have the same objection to all of the applicants/string. -- Important for private parties in resolution to know that there is an intent to object (but that doesn’t pertain to alternative 1 as there is no private resolution). -- The objection should be submitted within a certain time period. -- The nature of the applicant is important. It's not just the existence of the string. It depends on who is operating it and what the purpose of the tld as stated in the application in Question 18 answers and services to be provided in answer to Question 23. There should be an intent to object process prior to determining the order of the queue with no panel convened. Other complications: Objections if there is more than one Community Application String Confusion Objection Results in the Creation of a New Contention Set or Adds to an Existing Contention Set Appeals/Accountability Mechanisms Applicant Support Program Discussion: -- Seems that these are all related to the attempt to gain efficiencies to know the order of the contention sets. If you don’t need to know the order then you could leave the program untouched. If you go back to the goals knowing the order of the contention sets goes to goals 3, 4, and 5. -- Add a goal: “Increase efficiencies in application evaluation by way of understanding the contention set?” -- Note that alternative 1 would eliminate the goal to allow contention resolution. “If there is contention for strings, applicants may: i) resolve contention between them within a pre-established timeframe”
Just to clarify, under the Discussion section for the 2 Alternatives. I raised a question regarding private auctions as one of the mechanisms under private resolution. I didn't question retaining private resolution, just private auctions as one possible private resolution mechanism, because I thought the WG was leaning towards banning just private auctions. Justine ----- On Tue, 3 Dec 2019 at 00:52, Julie Hedlund <julie.hedlund@icann.org> wrote:
Dear Working Group members,
Please see below the notes from the meeting on 02 December 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/2019-12-02+New+gTLD+Subsequent+Pro... .
Kind regards,
Julie
Julie Hedlund, Policy Director
*Notes and Action Items:*
*Actions:*
ACTION ITEM 1: Add a third alternative.
ACTION ITEM 2: Add another goal (#7): “Increase efficiencies in application evaluation by way of understanding the contention set?”
ACTION ITEM 3: Create a flow chart with a fictional string to show how alternative 1 would work.
ACTION ITEM 4: Update the list of goals.
*Notes:*
1. Review Agenda/Statements of Interest: Susan Payne was reappointed IPC Secretary for another year.
2. String Contention Mechanisms of Last Resort: https://docs.google.com/document/d/16qDoiK6vydQp6a0v9tMvU2l5fcypJY24hCzTIVTj... [docs.google.com] <https://urldefense.proofpoint.com/v2/url?u=https-3A__docs.google.com_documen...>
*What is the issue we are trying to address:*
-- The Working Group has discussed a number of potential issues with the mechanisms of last resort used in the 2012 New gTLD Round. These issues are captured in the Supplemental Initial Report.
-- Although the Working Group ultimately believes that when there is string contention, an auction process should be used to select the Registry Operator invited to enter into a Registry Agreement with ICANN, the Working Group is still discussing what forms of private resolution should be allowed (if any), the specific type of auction to be used, and the timing of such an auction.
*Policy Goals / What the WG is Seeking to Accomplish:*
-- The WG is largely supportive of existing Implementation Guideline F:
*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.*
Other goals include:
1. 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.
. Which could include, making it easier to implement “multipliers” for certain types of applicants, such as those eligible for Applicant Support.
-- 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:*
-- Do we still need iii)? An alternative may be, "The ICANN Board may use expert panels to make Community Priority Evaluation determinations." This may also be dependent on recommendations on the new appeals mechanism.
-- ICANN Board says it does not make policy. Its decision would be subject to RFR and IRP - very messy so it may be better to stick with what we developed earlier.
-- This isn’t about the Board making policy, but making it clear that it’s an auction process rather than the Board making a decision.
-- There should be a reference instead to Auction of last resort.
-- Agree they are good goals so suggest removing possible description
*What are we Proposing?*
-- The Working Group is leaning towards recommending a sealed-bid auction as the ultimate form of auction used as a mechanism to resolve string contention. When a sealed-bid auction is held where bids are submitted without knowing the bid of others in the auction (e.g., prior to evaluating any of the applications) it is also called a Vickrey Auction. A sealed-bid auction can also be used as a mechanism of last resort and at the end of the process.
-- With a sealed-bid auction, each applicant submits a sealed bid, stating the amount that they are willing to pay for the TLD. The ultimate “winner” pays the amount submitted by the second-highest bidder..
-- Regardless of when the sealed bid auction is held, if there are one or more Community-based Applications, that/those application(s) would need to be processed first through Community Priority Evaluation before looking at the auction bids.
Alternative 1 - Vickrey Auction (No Private Resolution)
-- Addresses goals 1, 2, 4, and 6.
-- The principle pro here is the seemingly near elimination of private resolution. However, the principle con is the substantial complications this approach introduces (see Additional Considerations, Mostly For Alternative 1 below). Other cons are that other forms of private resolution might be impacted (e.g., joint ventures, string change, etc.) in seeking to eliminate private resolution for financial benefit and that bids are submitted with no contextual information.
Alternative 2 - Sealed-Bid Auction allowing Private Resolution
-- It seems to be supportive of, or at least not impede, 1, 2, and 6, but in a less pronounced manner as it relates to Alternative 1; the maker of this Alternative has acknowledged that it does not fully address concerns around potential collusion and profiteering on application withdrawals.
-- However, some benefits are likely derived by obtaining sealed bids (which can reduce the incentive for all parties to agree to private resolution, if an applicant already knows they have the highest bid). The other main pro here is simplicity - most other processes remain unaffected.
*Discussion*:
-- Re: Alternative 2: First bullet point and third bullet point seem incompatible. Third bullet point: “Applicants would still have an opportunity to resolve the contention set through other means such as private auction, a joint venture arrangement or to choose another string as was suggested for ‘brands’ of the same name.”
-- Assuming you stayed in only those applicants who stayed in would be revealed on reveal day. So you could still have private resolution.
-- For clarity, the third bullet could be swapped with the fourth bullet and add “post reveal day”. In third bullet point, after "opportunity", you would need to insert "after reveal day" or something to clarify that parties become known.
-- Question: Wasn’t one of the proposals to outlaw private auctions? So not sure why we are still allowing private resolution. Answer: If we went with alternative 1 we would eliminate private resolution, but not for alternative 2. So that is one of the drawbacks with alternative 2.
-- Thought alternative 2 was to allow participants to know how many contention sets there are. Add as a third alternative: Alternative three could remove some of the elements about private resolution.
-- They may not resolve privately and should only have a limited period to resolve. If not resolved in a limited period, it should proceed to the sealed bid winner. I am not seeing the time limit in alternative 2 though. Is it there?
-- Question: How would the timing work with a string contention objection process?
-- How could private auctions be prevented?
-- Objections should not be triggered until a winner (or a private resolution winner) is identified.
-- Re: Alternative 2 there should be a limited time for private resolution.
-- Helpful to put these alternatives out for public comment and indicate whether the WG has a preference.
-- Re: Alternative 2 -- Question: For string confusion objections those would have to be heard right away.
Additional Considerations:
*Public Comment: Comments from the public are solicited on all applications regardless of where they are placed in the queue. To do it otherwise would mean opening up separate public comment periods depending on whether there is a need to go to the second bidder, and that would be impossible to monitor.*
*Discussion*:
-- Strongly support 1 public comment period, for the exact same length of time for all.
-- Impractical to have multiple public comments.
*String Similarity Evaluation:*
*Discussion:*
-- Don’t see how this fits with the notion of closed bids and timing. You have a scenario where you have some who know who they are bidding against and everyone else doesn’t.
-- In the scenario where the result of a string similarity evaluation is that some would have insight into who is in the set -- this is an unfair result.
-- Which is why getting every applicant to submit a bid at the point of application is something to consider, even though it may be cumbersome for many.
-- What if this fact situation should default to sealed bid only?
-- Why would they not be all announced at the same time?
-- So we are proposing to treat some applicants differently from others? That does not seem to be in line with the Bylaws.
-- Wouldn’t alternative 1 solve this issue?
-- What about plurals?
-- There was only one case in 2012 that was found to be similar (unicorn/unicom).
-- Why string similarity evaluation after reveal day? Why not make it before reveal day? That is a possibility.
-- is string similarity not subject to accountability mechanisms and appeals? would that not “reveal” it in some manner?
-- Agree with that suggestion re string similarity evaluation occurring first and before reveal day. bids would have to be in before appeal.
Objections: *Objections on the highest bidder’s application must be filed within the objection period. With respect to objections to the other applications, ICANN would create a system for the filing of “an intent to file an objection.” *
*Discussion:*
-- Question: What happens when someone indicates that they are filing a community objection and they are filing it against all of the applicants for a string. Answer: All applicants should have a chance to respond. Add text to relay your comment on "can indicate that an objection will apply to all applications for same string"?
-- Objections should not come into full proceedings unless and until there is a winner - it's a huge waste of time and money if it does proceed but private parties need to know what the value of the string may be.
-- Some concern about not having to submit the objections on a standard timeline, although support not engaging fees or panels until the objection is necessary, based on bidder ordering .
-- “time” may benefit some as they build their case. Or could the “intent to file” require some key points that will be included in the objection filing?
-- Question: We are agreeing on the principle that the intent to object is a good idea, but when would that happen? Would one party have to state the type of objection and the grounds? Could it just be a party filing very general intent to objection concerning a risk associated with that application. Would there be a panel for an intent to object process? Answer: Proposal was that the objection would be “bare bones”. There would be no panel if it was just an intent to object to one application, but if for all applications (to the string) then one could request a panel. You file your objection against the applicant first in the queue and an intent to file against the others in the queue. Or, you could say I have the same objection to all of the applicants/string.
-- Important for private parties in resolution to know that there is an intent to object (but that doesn’t pertain to alternative 1 as there is no private resolution).
-- The objection should be submitted within a certain time period.
-- The nature of the applicant is important. It's not just the existence of the string. It depends on who is operating it and what the purpose of the tld as stated in the application in Question 18 answers and services to be provided in answer to Question 23. There should be an intent to object process prior to determining the order of the queue with no panel convened.
*Other complications:*
*Objections if there is more than one Community Application*
*String Confusion Objection Results in the Creation of a New Contention Set or Adds to an Existing Contention Set*
*Appeals/Accountability Mechanisms*
*Applicant Support Program*
*Discussion*:
-- Seems that these are all related to the attempt to gain efficiencies to know the order of the contention sets. If you don’t need to know the order then you could leave the program untouched. If you go back to the goals knowing the order of the contention sets goes to goals 3, 4, and 5.
-- Add a goal: “Increase efficiencies in application evaluation by way of understanding the contention set?”
-- Note that alternative 1 would eliminate the goal to allow contention resolution. *“If there is contention for strings, applicants may: i) resolve contention between them within a pre-established timeframe”*
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Thank you very much for the clarification Justine. Kind regards, Julie From: Gnso-newgtld-wg <gnso-newgtld-wg-bounces@icann.org> on behalf of Justine Chew <justine.chew@gmail.com> Date: Monday, December 2, 2019 at 12:32 PM To: "gnso-newgtld-wg@icann.org" <gnso-newgtld-wg@icann.org> Subject: Re: [Gnso-newgtld-wg] Notes and Action Items - New gTLD Subsequent Procedures PDP WG - 02 December 2019 Just to clarify, under the Discussion section for the 2 Alternatives. I raised a question regarding private auctions as one of the mechanisms under private resolution. I didn't question retaining private resolution, just private auctions as one possible private resolution mechanism, because I thought the WG was leaning towards banning just private auctions. Justine ----- On Tue, 3 Dec 2019 at 00:52, Julie Hedlund <julie.hedlund@icann.org<mailto:julie.hedlund@icann.org>> wrote: Dear Working Group members, Please see below the notes from the meeting on 02 December 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/2019-12-02+New+gTLD+Subsequent+Pro.... Kind regards, Julie Julie Hedlund, Policy Director Notes and Action Items: Actions: ACTION ITEM 1: Add a third alternative. ACTION ITEM 2: Add another goal (#7): “Increase efficiencies in application evaluation by way of understanding the contention set?” ACTION ITEM 3: Create a flow chart with a fictional string to show how alternative 1 would work. ACTION ITEM 4: Update the list of goals. Notes: 1. Review Agenda/Statements of Interest: Susan Payne was reappointed IPC Secretary for another year. 2. String Contention Mechanisms of Last Resort: https://docs.google.com/document/d/16qDoiK6vydQp6a0v9tMvU2l5fcypJY24hCzTIVTj... [docs.google.com]<https://urldefense.proofpoint.com/v2/url?u=https-3A__docs.google.com_documen...> What is the issue we are trying to address: -- The Working Group has discussed a number of potential issues with the mechanisms of last resort used in the 2012 New gTLD Round. These issues are captured in the Supplemental Initial Report. -- Although the Working Group ultimately believes that when there is string contention, an auction process should be used to select the Registry Operator invited to enter into a Registry Agreement with ICANN, the Working Group is still discussing what forms of private resolution should be allowed (if any), the specific type of auction to be used, and the timing of such an auction. Policy Goals / What the WG is Seeking to Accomplish: -- The WG is largely supportive of existing Implementation Guideline F: 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. Other goals include: 1. 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. . Which could include, making it easier to implement “multipliers” for certain types of applicants, such as those eligible for Applicant Support. -- 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: -- Do we still need iii)? An alternative may be, "The ICANN Board may use expert panels to make Community Priority Evaluation determinations." This may also be dependent on recommendations on the new appeals mechanism. -- ICANN Board says it does not make policy. Its decision would be subject to RFR and IRP - very messy so it may be better to stick with what we developed earlier. -- This isn’t about the Board making policy, but making it clear that it’s an auction process rather than the Board making a decision. -- There should be a reference instead to Auction of last resort. -- Agree they are good goals so suggest removing possible description What are we Proposing? -- The Working Group is leaning towards recommending a sealed-bid auction as the ultimate form of auction used as a mechanism to resolve string contention. When a sealed-bid auction is held where bids are submitted without knowing the bid of others in the auction (e.g., prior to evaluating any of the applications) it is also called a Vickrey Auction. A sealed-bid auction can also be used as a mechanism of last resort and at the end of the process. -- With a sealed-bid auction, each applicant submits a sealed bid, stating the amount that they are willing to pay for the TLD. The ultimate “winner” pays the amount submitted by the second-highest bidder.. -- Regardless of when the sealed bid auction is held, if there are one or more Community-based Applications, that/those application(s) would need to be processed first through Community Priority Evaluation before looking at the auction bids. Alternative 1 - Vickrey Auction (No Private Resolution) -- Addresses goals 1, 2, 4, and 6. -- The principle pro here is the seemingly near elimination of private resolution. However, the principle con is the substantial complications this approach introduces (see Additional Considerations, Mostly For Alternative 1 below). Other cons are that other forms of private resolution might be impacted (e.g., joint ventures, string change, etc.) in seeking to eliminate private resolution for financial benefit and that bids are submitted with no contextual information. Alternative 2 - Sealed-Bid Auction allowing Private Resolution -- It seems to be supportive of, or at least not impede, 1, 2, and 6, but in a less pronounced manner as it relates to Alternative 1; the maker of this Alternative has acknowledged that it does not fully address concerns around potential collusion and profiteering on application withdrawals. -- However, some benefits are likely derived by obtaining sealed bids (which can reduce the incentive for all parties to agree to private resolution, if an applicant already knows they have the highest bid). The other main pro here is simplicity - most other processes remain unaffected. Discussion: -- Re: Alternative 2: First bullet point and third bullet point seem incompatible. Third bullet point: “Applicants would still have an opportunity to resolve the contention set through other means such as private auction, a joint venture arrangement or to choose another string as was suggested for ‘brands’ of the same name.” -- Assuming you stayed in only those applicants who stayed in would be revealed on reveal day. So you could still have private resolution. -- For clarity, the third bullet could be swapped with the fourth bullet and add “post reveal day”. In third bullet point, after "opportunity", you would need to insert "after reveal day" or something to clarify that parties become known. -- Question: Wasn’t one of the proposals to outlaw private auctions? So not sure why we are still allowing private resolution. Answer: If we went with alternative 1 we would eliminate private resolution, but not for alternative 2. So that is one of the drawbacks with alternative 2. -- Thought alternative 2 was to allow participants to know how many contention sets there are. Add as a third alternative: Alternative three could remove some of the elements about private resolution. -- They may not resolve privately and should only have a limited period to resolve. If not resolved in a limited period, it should proceed to the sealed bid winner. I am not seeing the time limit in alternative 2 though. Is it there? -- Question: How would the timing work with a string contention objection process? -- How could private auctions be prevented? -- Objections should not be triggered until a winner (or a private resolution winner) is identified. -- Re: Alternative 2 there should be a limited time for private resolution. -- Helpful to put these alternatives out for public comment and indicate whether the WG has a preference. -- Re: Alternative 2 -- Question: For string confusion objections those would have to be heard right away. Additional Considerations: Public Comment: Comments from the public are solicited on all applications regardless of where they are placed in the queue. To do it otherwise would mean opening up separate public comment periods depending on whether there is a need to go to the second bidder, and that would be impossible to monitor. Discussion: -- Strongly support 1 public comment period, for the exact same length of time for all. -- Impractical to have multiple public comments. String Similarity Evaluation: Discussion: -- Don’t see how this fits with the notion of closed bids and timing. You have a scenario where you have some who know who they are bidding against and everyone else doesn’t. -- In the scenario where the result of a string similarity evaluation is that some would have insight into who is in the set -- this is an unfair result. -- Which is why getting every applicant to submit a bid at the point of application is something to consider, even though it may be cumbersome for many. -- What if this fact situation should default to sealed bid only? -- Why would they not be all announced at the same time? -- So we are proposing to treat some applicants differently from others? That does not seem to be in line with the Bylaws. -- Wouldn’t alternative 1 solve this issue? -- What about plurals? -- There was only one case in 2012 that was found to be similar (unicorn/unicom). -- Why string similarity evaluation after reveal day? Why not make it before reveal day? That is a possibility. -- is string similarity not subject to accountability mechanisms and appeals? would that not “reveal” it in some manner? -- Agree with that suggestion re string similarity evaluation occurring first and before reveal day. bids would have to be in before appeal. Objections: Objections on the highest bidder’s application must be filed within the objection period. With respect to objections to the other applications, ICANN would create a system for the filing of “an intent to file an objection.” Discussion: -- Question: What happens when someone indicates that they are filing a community objection and they are filing it against all of the applicants for a string. Answer: All applicants should have a chance to respond. Add text to relay your comment on "can indicate that an objection will apply to all applications for same string"? -- Objections should not come into full proceedings unless and until there is a winner - it's a huge waste of time and money if it does proceed but private parties need to know what the value of the string may be. -- Some concern about not having to submit the objections on a standard timeline, although support not engaging fees or panels until the objection is necessary, based on bidder ordering . -- “time” may benefit some as they build their case. Or could the “intent to file” require some key points that will be included in the objection filing? -- Question: We are agreeing on the principle that the intent to object is a good idea, but when would that happen? Would one party have to state the type of objection and the grounds? Could it just be a party filing very general intent to objection concerning a risk associated with that application. Would there be a panel for an intent to object process? Answer: Proposal was that the objection would be “bare bones”. There would be no panel if it was just an intent to object to one application, but if for all applications (to the string) then one could request a panel. You file your objection against the applicant first in the queue and an intent to file against the others in the queue. Or, you could say I have the same objection to all of the applicants/string. -- Important for private parties in resolution to know that there is an intent to object (but that doesn’t pertain to alternative 1 as there is no private resolution). -- The objection should be submitted within a certain time period. -- The nature of the applicant is important. It's not just the existence of the string. It depends on who is operating it and what the purpose of the tld as stated in the application in Question 18 answers and services to be provided in answer to Question 23. There should be an intent to object process prior to determining the order of the queue with no panel convened. Other complications: Objections if there is more than one Community Application String Confusion Objection Results in the Creation of a New Contention Set or Adds to an Existing Contention Set Appeals/Accountability Mechanisms Applicant Support Program Discussion: -- Seems that these are all related to the attempt to gain efficiencies to know the order of the contention sets. If you don’t need to know the order then you could leave the program untouched. If you go back to the goals knowing the order of the contention sets goes to goals 3, 4, and 5. -- Add a goal: “Increase efficiencies in application evaluation by way of understanding the contention set?” -- Note that alternative 1 would eliminate the goal to allow contention resolution. “If there is contention for strings, applicants may: i) resolve contention between them within a pre-established timeframe” _______________________________________________ Gnso-newgtld-wg mailing list Gnso-newgtld-wg@icann.org<mailto:Gnso-newgtld-wg@icann.org> https://mm.icann.org/mailman/listinfo/gnso-newgtld-wg _______________________________________________ By submitting your personal data, you consent to the processing of your personal data for purposes of subscribing to this mailing list accordance with the ICANN Privacy Policy (https://www.icann.org/privacy/policy) and the website Terms of Service (https://www.icann.org/privacy/tos). 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Thank you. Regarding Action Item 3, I thought the flow chart would also be applicable to Alternative 2. Are we saying there will only be a flow chart for Alternative 1? Thank you, Anne From: Gnso-newgtld-wg <gnso-newgtld-wg-bounces@icann.org> On Behalf Of Julie Hedlund Sent: Monday, December 2, 2019 9:52 AM To: gnso-newgtld-wg@icann.org Subject: [Gnso-newgtld-wg] Notes and Action Items - New gTLD Subsequent Procedures PDP WG - 02 December 2019 [EXTERNAL] ________________________________ Dear Working Group members, Please see below the notes from the meeting on 02 December 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/2019-12-02+New+gTLD+Subsequent+Pro.... Kind regards, Julie Julie Hedlund, Policy Director Notes and Action Items: Actions: ACTION ITEM 1: Add a third alternative. ACTION ITEM 2: Add another goal (#7): “Increase efficiencies in application evaluation by way of understanding the contention set?” ACTION ITEM 3: Create a flow chart with a fictional string to show how alternative 1 would work. ACTION ITEM 4: Update the list of goals. Notes: 1. Review Agenda/Statements of Interest: Susan Payne was reappointed IPC Secretary for another year. 2. String Contention Mechanisms of Last Resort: https://docs.google.com/document/d/16qDoiK6vydQp6a0v9tMvU2l5fcypJY24hCzTIVTj... [docs.google.com]<https://urldefense.proofpoint.com/v2/url?u=https-3A__docs.google.com_documen...> What is the issue we are trying to address: -- The Working Group has discussed a number of potential issues with the mechanisms of last resort used in the 2012 New gTLD Round. These issues are captured in the Supplemental Initial Report. -- Although the Working Group ultimately believes that when there is string contention, an auction process should be used to select the Registry Operator invited to enter into a Registry Agreement with ICANN, the Working Group is still discussing what forms of private resolution should be allowed (if any), the specific type of auction to be used, and the timing of such an auction. Policy Goals / What the WG is Seeking to Accomplish: -- The WG is largely supportive of existing Implementation Guideline F: 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. Other goals include: 1. 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. -- 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: -- Do we still need iii)? An alternative may be, "The ICANN Board may use expert panels to make Community Priority Evaluation determinations." This may also be dependent on recommendations on the new appeals mechanism. -- ICANN Board says it does not make policy. Its decision would be subject to RFR and IRP - very messy so it may be better to stick with what we developed earlier. -- This isn’t about the Board making policy, but making it clear that it’s an auction process rather than the Board making a decision. -- There should be a reference instead to Auction of last resort. -- Agree they are good goals so suggest removing possible description What are we Proposing? -- The Working Group is leaning towards recommending a sealed-bid auction as the ultimate form of auction used as a mechanism to resolve string contention. When a sealed-bid auction is held where bids are submitted without knowing the bid of others in the auction (e.g., prior to evaluating any of the applications) it is also called a Vickrey Auction. A sealed-bid auction can also be used as a mechanism of last resort and at the end of the process. -- With a sealed-bid auction, each applicant submits a sealed bid, stating the amount that they are willing to pay for the TLD. The ultimate “winner” pays the amount submitted by the second-highest bidder.. -- Regardless of when the sealed bid auction is held, if there are one or more Community-based Applications, that/those application(s) would need to be processed first through Community Priority Evaluation before looking at the auction bids. Alternative 1 - Vickrey Auction (No Private Resolution) -- Addresses goals 1, 2, 4, and 6. -- The principle pro here is the seemingly near elimination of private resolution. However, the principle con is the substantial complications this approach introduces (see Additional Considerations, Mostly For Alternative 1 below). Other cons are that other forms of private resolution might be impacted (e.g., joint ventures, string change, etc.) in seeking to eliminate private resolution for financial benefit and that bids are submitted with no contextual information. Alternative 2 - Sealed-Bid Auction allowing Private Resolution -- It seems to be supportive of, or at least not impede, 1, 2, and 6, but in a less pronounced manner as it relates to Alternative 1; the maker of this Alternative has acknowledged that it does not fully address concerns around potential collusion and profiteering on application withdrawals. -- However, some benefits are likely derived by obtaining sealed bids (which can reduce the incentive for all parties to agree to private resolution, if an applicant already knows they have the highest bid). The other main pro here is simplicity - most other processes remain unaffected. Discussion: -- Re: Alternative 2: First bullet point and third bullet point seem incompatible. Third bullet point: “Applicants would still have an opportunity to resolve the contention set through other means such as private auction, a joint venture arrangement or to choose another string as was suggested for ‘brands’ of the same name.” -- Assuming you stayed in only those applicants who stayed in would be revealed on reveal day. So you could still have private resolution. -- For clarity, the third bullet could be swapped with the fourth bullet and add “post reveal day”. In third bullet point, after "opportunity", you would need to insert "after reveal day" or something to clarify that parties become known. -- Question: Wasn’t one of the proposals to outlaw private auctions? So not sure why we are still allowing private resolution. Answer: If we went with alternative 1 we would eliminate private resolution, but not for alternative 2. So that is one of the drawbacks with alternative 2. -- Thought alternative 2 was to allow participants to know how many contention sets there are. Add as a third alternative: Alternative three could remove some of the elements about private resolution. -- They may not resolve privately and should only have a limited period to resolve. If not resolved in a limited period, it should proceed to the sealed bid winner. I am not seeing the time limit in alternative 2 though. Is it there? -- Question: How would the timing work with a string contention objection process? -- How could private auctions be prevented? -- Objections should not be triggered until a winner (or a private resolution winner) is identified. -- Re: Alternative 2 there should be a limited time for private resolution. -- Helpful to put these alternatives out for public comment and indicate whether the WG has a preference. -- Re: Alternative 2 -- Question: For string confusion objections those would have to be heard right away. Additional Considerations: Public Comment: Comments from the public are solicited on all applications regardless of where they are placed in the queue. To do it otherwise would mean opening up separate public comment periods depending on whether there is a need to go to the second bidder, and that would be impossible to monitor. Discussion: -- Strongly support 1 public comment period, for the exact same length of time for all. -- Impractical to have multiple public comments. String Similarity Evaluation: Discussion: -- Don’t see how this fits with the notion of closed bids and timing. You have a scenario where you have some who know who they are bidding against and everyone else doesn’t. -- In the scenario where the result of a string similarity evaluation is that some would have insight into who is in the set -- this is an unfair result. -- Which is why getting every applicant to submit a bid at the point of application is something to consider, even though it may be cumbersome for many. -- What if this fact situation should default to sealed bid only? -- Why would they not be all announced at the same time? -- So we are proposing to treat some applicants differently from others? That does not seem to be in line with the Bylaws. -- Wouldn’t alternative 1 solve this issue? -- What about plurals? -- There was only one case in 2012 that was found to be similar (unicorn/unicom). -- Why string similarity evaluation after reveal day? Why not make it before reveal day? That is a possibility. -- is string similarity not subject to accountability mechanisms and appeals? would that not “reveal” it in some manner? -- Agree with that suggestion re string similarity evaluation occurring first and before reveal day. bids would have to be in before appeal. Objections: Objections on the highest bidder’s application must be filed within the objection period. With respect to objections to the other applications, ICANN would create a system for the filing of “an intent to file an objection.” Discussion: -- Question: What happens when someone indicates that they are filing a community objection and they are filing it against all of the applicants for a string. Answer: All applicants should have a chance to respond. Add text to relay your comment on "can indicate that an objection will apply to all applications for same string"? -- Objections should not come into full proceedings unless and until there is a winner - it's a huge waste of time and money if it does proceed but private parties need to know what the value of the string may be. -- Some concern about not having to submit the objections on a standard timeline, although support not engaging fees or panels until the objection is necessary, based on bidder ordering . -- “time” may benefit some as they build their case. Or could the “intent to file” require some key points that will be included in the objection filing? -- Question: We are agreeing on the principle that the intent to object is a good idea, but when would that happen? Would one party have to state the type of objection and the grounds? Could it just be a party filing very general intent to objection concerning a risk associated with that application. Would there be a panel for an intent to object process? Answer: Proposal was that the objection would be “bare bones”. There would be no panel if it was just an intent to object to one application, but if for all applications (to the string) then one could request a panel. You file your objection against the applicant first in the queue and an intent to file against the others in the queue. Or, you could say I have the same objection to all of the applicants/string. -- Important for private parties in resolution to know that there is an intent to object (but that doesn’t pertain to alternative 1 as there is no private resolution). -- The objection should be submitted within a certain time period. -- The nature of the applicant is important. It's not just the existence of the string. It depends on who is operating it and what the purpose of the tld as stated in the application in Question 18 answers and services to be provided in answer to Question 23. There should be an intent to object process prior to determining the order of the queue with no panel convened. Other complications: Objections if there is more than one Community Application String Confusion Objection Results in the Creation of a New Contention Set or Adds to an Existing Contention Set Appeals/Accountability Mechanisms Applicant Support Program Discussion: -- Seems that these are all related to the attempt to gain efficiencies to know the order of the contention sets. If you don’t need to know the order then you could leave the program untouched. If you go back to the goals knowing the order of the contention sets goes to goals 3, 4, and 5. -- Add a goal: “Increase efficiencies in application evaluation by way of understanding the contention set?” -- Note that alternative 1 would eliminate the goal to allow contention resolution. “If there is contention for strings, applicants may: i) resolve contention between them within a pre-established timeframe” ________________________________ This message and any attachments are intended only for the use of the individual or entity to which they are addressed. If the reader of this message or an attachment is not the intended recipient or the employee or agent responsible for delivering the message or attachment to the intended recipient you are hereby notified that any dissemination, distribution or copying of this message or any attachment is strictly prohibited. If you have received this communication in error, please notify us immediately by replying to the sender. 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Thanks for the notes Julie, these are particularly helpful as I wasn’t able to attend the call. I have listened to the recording and I wanted to address a couple of issues that were discussed and are captured in your notes. I don’t agree that Alternative 1 addresses the following goal: 1. 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. I personally struggle with this as a goal because it’s a subjective assessment that applicants from 2012 overpaid for a TLD. Only the successful applicant can make that judgement and if the applicant willingly entered into a private or ICANN auction of last resort they didn’t do so blindly: they had an opportunity to assess the market and combined with their own personal objectives for wanting a string made a judgement about how much they were willing to pay for the string. As I noted previously, my main issue with Alternative 1 is that the sealed bid has to be provided at the time of application, which is unfair to any applicant that ultimately finds themselves in a contention set. No-one can predict how many applications will be received and how many strings will end up in a contention set so the applicant has no information available at the time of submitting their application on which to assess the value of the TLD to them. It would be eminently fairer to all applicants to submit sealed bids at a time when more information is available that would allow them to make a more informed decision about the value of the TLD to them, which is ultimately why I proposed Alternative 2 originally. Donna Donna Austin Neustar, Inc. / Senior Policy Manager, Registry Solutions Mobile: +1 310 890 9655 donna.austin@team.neustar<mailto:donna.austin@team.neustar> / Website: home.neustar<http://www.home.neustar/> Follow Neustar: LinkedIn<http://www.linkedin.com/company/5349> / Twitter<http://www.twitter.com/neustar> Reduce your environmental footprint. Print only if necessary. ________________________________ The information contained in this email message is intended only for the use of the recipient(s) named above and may contain confidential and/or privileged information. If you are not the intended recipient you have received this email message in error and any review, dissemination, distribution, or copying of this message is strictly prohibited. If you have received this communication in error, please notify us immediately and delete the original message. From: Gnso-newgtld-wg [mailto:gnso-newgtld-wg-bounces@icann.org] On Behalf Of Julie Hedlund Sent: Monday, December 02, 2019 8:52 AM To: gnso-newgtld-wg@icann.org Subject: [Gnso-newgtld-wg] Notes and Action Items - New gTLD Subsequent Procedures PDP WG - 02 December 2019 Dear Working Group members, Please see below the notes from the meeting on 02 December 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/2019-12-02+New+gTLD+Subsequent+Procedures+PDP<https://urldefense.proofpoint.com/v2/url?u=https-3A__community.icann.org_display_NGSPP_2019-2D12-2D02-2BNew-2BgTLD-2BSubsequent-2BProcedures-2BPDP&d=DwMGaQ&c=MOptNlVtIETeDALC_lULrw&r=CwipU91YB6EkpFXK9ynnT_QUef4yC5p7jpsDm8cU97g&m=JoTKufMJCg61DXDXCrwRY_MAaLTb_ZSrDH7Fzgwjrls&s=_51UB1f5GcK4eSMvs-LveU9QVE2_2nruA-sSl33kYfs&e=>. Kind regards, Julie Julie Hedlund, Policy Director Notes and Action Items: Actions: ACTION ITEM 1: Add a third alternative. ACTION ITEM 2: Add another goal (#7): “Increase efficiencies in application evaluation by way of understanding the contention set?” ACTION ITEM 3: Create a flow chart with a fictional string to show how alternative 1 would work. ACTION ITEM 4: Update the list of goals. Notes: 1. Review Agenda/Statements of Interest: Susan Payne was reappointed IPC Secretary for another year. 2. String Contention Mechanisms of Last Resort: https://docs.google.com/document/d/16qDoiK6vydQp6a0v9tMvU2l5fcypJY24hCzTIVTj... [docs.google.com]<https://urldefense.proofpoint.com/v2/url?u=https-3A__docs.google.com_documen...> What is the issue we are trying to address: -- The Working Group has discussed a number of potential issues with the mechanisms of last resort used in the 2012 New gTLD Round. These issues are captured in the Supplemental Initial Report. -- Although the Working Group ultimately believes that when there is string contention, an auction process should be used to select the Registry Operator invited to enter into a Registry Agreement with ICANN, the Working Group is still discussing what forms of private resolution should be allowed (if any), the specific type of auction to be used, and the timing of such an auction. Policy Goals / What the WG is Seeking to Accomplish: -- The WG is largely supportive of existing Implementation Guideline F: 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. Other goals include: 1. Reduce the risk of “bidding wars” in which the winner ultimately overpays for the TLD. * 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. b. Which could include, making it easier to implement “multipliers” for certain types of applicants, such as those eligible for Applicant Support. -- 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: -- Do we still need iii)? An alternative may be, "The ICANN Board may use expert panels to make Community Priority Evaluation determinations." This may also be dependent on recommendations on the new appeals mechanism. -- ICANN Board says it does not make policy. Its decision would be subject to RFR and IRP - very messy so it may be better to stick with what we developed earlier. -- This isn’t about the Board making policy, but making it clear that it’s an auction process rather than the Board making a decision. -- There should be a reference instead to Auction of last resort. -- Agree they are good goals so suggest removing possible description What are we Proposing? -- The Working Group is leaning towards recommending a sealed-bid auction as the ultimate form of auction used as a mechanism to resolve string contention. When a sealed-bid auction is held where bids are submitted without knowing the bid of others in the auction (e.g., prior to evaluating any of the applications) it is also called a Vickrey Auction. A sealed-bid auction can also be used as a mechanism of last resort and at the end of the process. -- With a sealed-bid auction, each applicant submits a sealed bid, stating the amount that they are willing to pay for the TLD. The ultimate “winner” pays the amount submitted by the second-highest bidder.. -- Regardless of when the sealed bid auction is held, if there are one or more Community-based Applications, that/those application(s) would need to be processed first through Community Priority Evaluation before looking at the auction bids. Alternative 1 - Vickrey Auction (No Private Resolution) -- Addresses goals 1, 2, 4, and 6. -- The principle pro here is the seemingly near elimination of private resolution. However, the principle con is the substantial complications this approach introduces (see Additional Considerations, Mostly For Alternative 1 below). Other cons are that other forms of private resolution might be impacted (e.g., joint ventures, string change, etc.) in seeking to eliminate private resolution for financial benefit and that bids are submitted with no contextual information. Alternative 2 - Sealed-Bid Auction allowing Private Resolution -- It seems to be supportive of, or at least not impede, 1, 2, and 6, but in a less pronounced manner as it relates to Alternative 1; the maker of this Alternative has acknowledged that it does not fully address concerns around potential collusion and profiteering on application withdrawals. -- However, some benefits are likely derived by obtaining sealed bids (which can reduce the incentive for all parties to agree to private resolution, if an applicant already knows they have the highest bid). The other main pro here is simplicity - most other processes remain unaffected. Discussion: -- Re: Alternative 2: First bullet point and third bullet point seem incompatible. Third bullet point: “Applicants would still have an opportunity to resolve the contention set through other means such as private auction, a joint venture arrangement or to choose another string as was suggested for ‘brands’ of the same name.” -- Assuming you stayed in only those applicants who stayed in would be revealed on reveal day. So you could still have private resolution. -- For clarity, the third bullet could be swapped with the fourth bullet and add “post reveal day”. In third bullet point, after "opportunity", you would need to insert "after reveal day" or something to clarify that parties become known. -- Question: Wasn’t one of the proposals to outlaw private auctions? So not sure why we are still allowing private resolution. Answer: If we went with alternative 1 we would eliminate private resolution, but not for alternative 2. So that is one of the drawbacks with alternative 2. -- Thought alternative 2 was to allow participants to know how many contention sets there are. Add as a third alternative: Alternative three could remove some of the elements about private resolution. -- They may not resolve privately and should only have a limited period to resolve. If not resolved in a limited period, it should proceed to the sealed bid winner. I am not seeing the time limit in alternative 2 though. Is it there? -- Question: How would the timing work with a string contention objection process? -- How could private auctions be prevented? -- Objections should not be triggered until a winner (or a private resolution winner) is identified. -- Re: Alternative 2 there should be a limited time for private resolution. -- Helpful to put these alternatives out for public comment and indicate whether the WG has a preference. -- Re: Alternative 2 -- Question: For string confusion objections those would have to be heard right away. Additional Considerations: Public Comment: Comments from the public are solicited on all applications regardless of where they are placed in the queue. To do it otherwise would mean opening up separate public comment periods depending on whether there is a need to go to the second bidder, and that would be impossible to monitor. Discussion: -- Strongly support 1 public comment period, for the exact same length of time for all. -- Impractical to have multiple public comments. String Similarity Evaluation: Discussion: -- Don’t see how this fits with the notion of closed bids and timing. You have a scenario where you have some who know who they are bidding against and everyone else doesn’t. -- In the scenario where the result of a string similarity evaluation is that some would have insight into who is in the set -- this is an unfair result. -- Which is why getting every applicant to submit a bid at the point of application is something to consider, even though it may be cumbersome for many. -- What if this fact situation should default to sealed bid only? -- Why would they not be all announced at the same time? -- So we are proposing to treat some applicants differently from others? That does not seem to be in line with the Bylaws. -- Wouldn’t alternative 1 solve this issue? -- What about plurals? -- There was only one case in 2012 that was found to be similar (unicorn/unicom). -- Why string similarity evaluation after reveal day? Why not make it before reveal day? That is a possibility. -- is string similarity not subject to accountability mechanisms and appeals? would that not “reveal” it in some manner? -- Agree with that suggestion re string similarity evaluation occurring first and before reveal day. bids would have to be in before appeal. Objections: Objections on the highest bidder’s application must be filed within the objection period. With respect to objections to the other applications, ICANN would create a system for the filing of “an intent to file an objection.” Discussion: -- Question: What happens when someone indicates that they are filing a community objection and they are filing it against all of the applicants for a string. Answer: All applicants should have a chance to respond. Add text to relay your comment on "can indicate that an objection will apply to all applications for same string"? -- Objections should not come into full proceedings unless and until there is a winner - it's a huge waste of time and money if it does proceed but private parties need to know what the value of the string may be. -- Some concern about not having to submit the objections on a standard timeline, although support not engaging fees or panels until the objection is necessary, based on bidder ordering . -- “time” may benefit some as they build their case. Or could the “intent to file” require some key points that will be included in the objection filing? -- Question: We are agreeing on the principle that the intent to object is a good idea, but when would that happen? Would one party have to state the type of objection and the grounds? Could it just be a party filing very general intent to objection concerning a risk associated with that application. Would there be a panel for an intent to object process? Answer: Proposal was that the objection would be “bare bones”. There would be no panel if it was just an intent to object to one application, but if for all applications (to the string) then one could request a panel. You file your objection against the applicant first in the queue and an intent to file against the others in the queue. Or, you could say I have the same objection to all of the applicants/string. -- Important for private parties in resolution to know that there is an intent to object (but that doesn’t pertain to alternative 1 as there is no private resolution). -- The objection should be submitted within a certain time period. -- The nature of the applicant is important. It's not just the existence of the string. It depends on who is operating it and what the purpose of the tld as stated in the application in Question 18 answers and services to be provided in answer to Question 23. There should be an intent to object process prior to determining the order of the queue with no panel convened. Other complications: Objections if there is more than one Community Application String Confusion Objection Results in the Creation of a New Contention Set or Adds to an Existing Contention Set Appeals/Accountability Mechanisms Applicant Support Program Discussion: -- Seems that these are all related to the attempt to gain efficiencies to know the order of the contention sets. If you don’t need to know the order then you could leave the program untouched. If you go back to the goals knowing the order of the contention sets goes to goals 3, 4, and 5. -- Add a goal: “Increase efficiencies in application evaluation by way of understanding the contention set?” -- Note that alternative 1 would eliminate the goal to allow contention resolution. “If there is contention for strings, applicants may: i) resolve contention between them within a pre-established timeframe”
Thank you, Donna, for picking this up. Just in relation to Goal No. 1, on reflection, I think the text "*...**in which the winner ultimately overpays for the TLD*" should be omitted or reworded, firstly as Donna has explained, we don't know what "overpays" actually means. Secondly, even if that is the case, why should we be concerned if an applicant chooses to "overpay". Thirdly, At-Large's concerns had to do with the situation of wealthier applicants outbidding less-wealthy applicants, thereby potentially stifling competition. So, perhaps the goal should be re-stated as "Reduce the risk of unintended outcomes from “bidding wars". As for the remaining texts, I would like to be able to review the flowcharts for the 3 Alternatives before making further comments. Thanks, *Justine Chew* ----- On Sat, 7 Dec 2019 at 04:57, Austin, Donna via Gnso-newgtld-wg < gnso-newgtld-wg@icann.org> wrote:
Thanks for the notes Julie, these are particularly helpful as I wasn’t able to attend the call.
I have listened to the recording and I wanted to address a couple of issues that were discussed and are captured in your notes.
I don’t agree that Alternative 1 addresses the following goal:
1. 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.
I personally struggle with this as a goal because it’s a subjective assessment that applicants from 2012 overpaid for a TLD. Only the successful applicant can make that judgement and if the applicant willingly entered into a private or ICANN auction of last resort they didn’t do so blindly: they had an opportunity to assess the market and combined with their own personal objectives for wanting a string made a judgement about how much they were willing to pay for the string.
As I noted previously, my main issue with Alternative 1 is that the sealed bid has to be provided at the time of application, which is unfair to any applicant that ultimately finds themselves in a contention set. No-one can predict how many applications will be received and how many strings will end up in a contention set so the applicant has no information available at the time of submitting their application on which to assess the value of the TLD to them.
It would be eminently fairer to all applicants to submit sealed bids at a time when more information is available that would allow them to make a more informed decision about the value of the TLD to them, which is ultimately why I proposed Alternative 2 originally.
Donna
*Donna Austin* *Neustar, Inc.* / Senior Policy Manager, Registry Solutions *Mobile:* +1 310 890 9655 *donna.austin@team.neustar <donna.austin@team.neustar>* / *Website:* home.neustar <http://www.home.neustar/>
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*From:* Gnso-newgtld-wg [mailto:gnso-newgtld-wg-bounces@icann.org] *On Behalf Of *Julie Hedlund *Sent:* Monday, December 02, 2019 8:52 AM *To:* gnso-newgtld-wg@icann.org *Subject:* [Gnso-newgtld-wg] Notes and Action Items - New gTLD Subsequent Procedures PDP WG - 02 December 2019
Dear Working Group members,
Please see below the notes from the meeting on 02 December 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/2019-12-02+New+gTLD+Subsequent+Pro... <https://urldefense.proofpoint.com/v2/url?u=https-3A__community.icann.org_dis...> .
Kind regards,
Julie
Julie Hedlund, Policy Director
*Notes and Action Items:*
*Actions:*
ACTION ITEM 1: Add a third alternative.
ACTION ITEM 2: Add another goal (#7): “Increase efficiencies in application evaluation by way of understanding the contention set?”
ACTION ITEM 3: Create a flow chart with a fictional string to show how alternative 1 would work.
ACTION ITEM 4: Update the list of goals.
*Notes:*
1. Review Agenda/Statements of Interest: Susan Payne was reappointed IPC Secretary for another year.
2. String Contention Mechanisms of Last Resort: https://docs.google.com/document/d/16qDoiK6vydQp6a0v9tMvU2l5fcypJY24hCzTIVTj... [docs.google.com] <https://urldefense.proofpoint.com/v2/url?u=https-3A__docs.google.com_documen...>
*What is the issue we are trying to address:*
-- The Working Group has discussed a number of potential issues with the mechanisms of last resort used in the 2012 New gTLD Round. These issues are captured in the Supplemental Initial Report.
-- Although the Working Group ultimately believes that when there is string contention, an auction process should be used to select the Registry Operator invited to enter into a Registry Agreement with ICANN, the Working Group is still discussing what forms of private resolution should be allowed (if any), the specific type of auction to be used, and the timing of such an auction.
*Policy Goals / What the WG is Seeking to Accomplish:*
-- The WG is largely supportive of existing Implementation Guideline F:
*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.*
Other goals include:
1. Reduce the risk of “bidding wars” in which the winner ultimately overpays for the TLD.
1. 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.
b. Which could include, making it easier to implement “multipliers” for certain types of applicants, such as those eligible for Applicant Support.
-- 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:*
-- Do we still need iii)? An alternative may be, "The ICANN Board may use expert panels to make Community Priority Evaluation determinations." This may also be dependent on recommendations on the new appeals mechanism.
-- ICANN Board says it does not make policy. Its decision would be subject to RFR and IRP - very messy so it may be better to stick with what we developed earlier.
-- This isn’t about the Board making policy, but making it clear that it’s an auction process rather than the Board making a decision.
-- There should be a reference instead to Auction of last resort.
-- Agree they are good goals so suggest removing possible description
*What are we Proposing?*
-- The Working Group is leaning towards recommending a sealed-bid auction as the ultimate form of auction used as a mechanism to resolve string contention. When a sealed-bid auction is held where bids are submitted without knowing the bid of others in the auction (e.g., prior to evaluating any of the applications) it is also called a Vickrey Auction. A sealed-bid auction can also be used as a mechanism of last resort and at the end of the process.
-- With a sealed-bid auction, each applicant submits a sealed bid, stating the amount that they are willing to pay for the TLD. The ultimate “winner” pays the amount submitted by the second-highest bidder..
-- Regardless of when the sealed bid auction is held, if there are one or more Community-based Applications, that/those application(s) would need to be processed first through Community Priority Evaluation before looking at the auction bids.
Alternative 1 - Vickrey Auction (No Private Resolution)
-- Addresses goals 1, 2, 4, and 6.
-- The principle pro here is the seemingly near elimination of private resolution. However, the principle con is the substantial complications this approach introduces (see Additional Considerations, Mostly For Alternative 1 below). Other cons are that other forms of private resolution might be impacted (e.g., joint ventures, string change, etc.) in seeking to eliminate private resolution for financial benefit and that bids are submitted with no contextual information.
Alternative 2 - Sealed-Bid Auction allowing Private Resolution
-- It seems to be supportive of, or at least not impede, 1, 2, and 6, but in a less pronounced manner as it relates to Alternative 1; the maker of this Alternative has acknowledged that it does not fully address concerns around potential collusion and profiteering on application withdrawals.
-- However, some benefits are likely derived by obtaining sealed bids (which can reduce the incentive for all parties to agree to private resolution, if an applicant already knows they have the highest bid). The other main pro here is simplicity - most other processes remain unaffected.
*Discussion*:
-- Re: Alternative 2: First bullet point and third bullet point seem incompatible. Third bullet point: “Applicants would still have an opportunity to resolve the contention set through other means such as private auction, a joint venture arrangement or to choose another string as was suggested for ‘brands’ of the same name.”
-- Assuming you stayed in only those applicants who stayed in would be revealed on reveal day. So you could still have private resolution.
-- For clarity, the third bullet could be swapped with the fourth bullet and add “post reveal day”. In third bullet point, after "opportunity", you would need to insert "after reveal day" or something to clarify that parties become known.
-- Question: Wasn’t one of the proposals to outlaw private auctions? So not sure why we are still allowing private resolution. Answer: If we went with alternative 1 we would eliminate private resolution, but not for alternative 2. So that is one of the drawbacks with alternative 2.
-- Thought alternative 2 was to allow participants to know how many contention sets there are. Add as a third alternative: Alternative three could remove some of the elements about private resolution.
-- They may not resolve privately and should only have a limited period to resolve. If not resolved in a limited period, it should proceed to the sealed bid winner. I am not seeing the time limit in alternative 2 though. Is it there?
-- Question: How would the timing work with a string contention objection process?
-- How could private auctions be prevented?
-- Objections should not be triggered until a winner (or a private resolution winner) is identified.
-- Re: Alternative 2 there should be a limited time for private resolution.
-- Helpful to put these alternatives out for public comment and indicate whether the WG has a preference.
-- Re: Alternative 2 -- Question: For string confusion objections those would have to be heard right away.
Additional Considerations:
*Public Comment: Comments from the public are solicited on all applications regardless of where they are placed in the queue. To do it otherwise would mean opening up separate public comment periods depending on whether there is a need to go to the second bidder, and that would be impossible to monitor.*
*Discussion*:
-- Strongly support 1 public comment period, for the exact same length of time for all.
-- Impractical to have multiple public comments.
*String Similarity Evaluation:*
*Discussion:*
-- Don’t see how this fits with the notion of closed bids and timing. You have a scenario where you have some who know who they are bidding against and everyone else doesn’t.
-- In the scenario where the result of a string similarity evaluation is that some would have insight into who is in the set -- this is an unfair result.
-- Which is why getting every applicant to submit a bid at the point of application is something to consider, even though it may be cumbersome for many.
-- What if this fact situation should default to sealed bid only?
-- Why would they not be all announced at the same time?
-- So we are proposing to treat some applicants differently from others? That does not seem to be in line with the Bylaws.
-- Wouldn’t alternative 1 solve this issue?
-- What about plurals?
-- There was only one case in 2012 that was found to be similar (unicorn/unicom).
-- Why string similarity evaluation after reveal day? Why not make it before reveal day? That is a possibility.
-- is string similarity not subject to accountability mechanisms and appeals? would that not “reveal” it in some manner?
-- Agree with that suggestion re string similarity evaluation occurring first and before reveal day. bids would have to be in before appeal.
Objections: *Objections on the highest bidder’s application must be filed within the objection period. With respect to objections to the other applications, ICANN would create a system for the filing of “an intent to file an objection.” *
*Discussion:*
-- Question: What happens when someone indicates that they are filing a community objection and they are filing it against all of the applicants for a string. Answer: All applicants should have a chance to respond. Add text to relay your comment on "can indicate that an objection will apply to all applications for same string"?
-- Objections should not come into full proceedings unless and until there is a winner - it's a huge waste of time and money if it does proceed but private parties need to know what the value of the string may be.
-- Some concern about not having to submit the objections on a standard timeline, although support not engaging fees or panels until the objection is necessary, based on bidder ordering .
-- “time” may benefit some as they build their case. Or could the “intent to file” require some key points that will be included in the objection filing?
-- Question: We are agreeing on the principle that the intent to object is a good idea, but when would that happen? Would one party have to state the type of objection and the grounds? Could it just be a party filing very general intent to objection concerning a risk associated with that application. Would there be a panel for an intent to object process? Answer: Proposal was that the objection would be “bare bones”. There would be no panel if it was just an intent to object to one application, but if for all applications (to the string) then one could request a panel. You file your objection against the applicant first in the queue and an intent to file against the others in the queue. Or, you could say I have the same objection to all of the applicants/string.
-- Important for private parties in resolution to know that there is an intent to object (but that doesn’t pertain to alternative 1 as there is no private resolution).
-- The objection should be submitted within a certain time period.
-- The nature of the applicant is important. It's not just the existence of the string. It depends on who is operating it and what the purpose of the tld as stated in the application in Question 18 answers and services to be provided in answer to Question 23. There should be an intent to object process prior to determining the order of the queue with no panel convened.
*Other complications:*
*Objections if there is more than one Community Application*
*String Confusion Objection Results in the Creation of a New Contention Set or Adds to an Existing Contention Set*
*Appeals/Accountability Mechanisms*
*Applicant Support Program*
*Discussion*:
-- Seems that these are all related to the attempt to gain efficiencies to know the order of the contention sets. If you don’t need to know the order then you could leave the program untouched. If you go back to the goals knowing the order of the contention sets goes to goals 3, 4, and 5.
-- Add a goal: “Increase efficiencies in application evaluation by way of understanding the contention set?”
-- Note that alternative 1 would eliminate the goal to allow contention resolution. *“If there is contention for strings, applicants may: i) resolve contention between them within a pre-established timeframe”*
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Hi All! I have really enjoyed the conversation on the calls and on this list regarding auctions. It is a great reminder of how rich in talent our community is. Below I have summarized some of the pros and cons of each process discussed (these are not meant to be exhaustive or dismissive, just my own thoughts which I encourage others to supplement). I’ve also proposed a possible way forward that could disrupt the current default status quo (ICANN Last Resort auction found in 2012 AGB, but which in my opinion is based on the false premise that ICANN “owns” all the undelegated gTLD space) but not force everyone into a one-sized-fits-all solution. I hope that the below encourages communication and helps us reach a consensus position that everyone in the WG can stand behind. Auction Type Strengths Weaknesses Vickrey (place maximum bid amount at the time application is filed) · Straightforward. · Eliminates significant delays caused by contention sets. · Favors single TLD applicants. · Favors deep pockets. · Bad for .brand applicants who could end up paying significantly more · Enriches ICANN (which has never justified why it thinks it “owns” the undelegated TLD resource). Modified Vickrey (place maximum bid amount at the time contention sets are formed) · Straightforward. · Eliminates much of the delay caused by contention sets · Eliminates ICANN Last Resort auctions. · Allows multiple TLD applicants to use resources more efficiently. · Favors deep pockets. · Enriches ICANN (which has never justified why it thinks it “owns” the undelegated TLD resource). Private Resolution (could be dollar amounts, acquisitions, other consideration, etc.) · Allows for full creativity to resolve contention sets. · Doesn’t enrich ICANN (which has never justified why it thinks it “owns” the undelegated TLD resource). · The parties may agree on an auction process to resolve the contention set or they may agree instead to negotiate toward a mutually rewarding outcome. · There have been rumors of gaming in the last round. · Favors deep pockets. ICANN Last Resort (status quo from 2012 AGB) None. · Favors deep pockets. · Enriches ICANN (which has never justified why it thinks it “owns” the undelegated TLD resource). A possible way forward: Choice. Let each applicant choose how they would like to proceed. If all of the other members in the contention set make the same choice, that is the method that will be used. If, however, the members of the contention set do not agree, then ICANN Last Resort (status quo) will be default. There is no harm to the pro-Vickrey applicants in this option since whatever dollar amount they designated in their applications can, if they so choose, become their maximum dollar amount in an ICANN Last Resort if need be. Since an applicant submitting a Vickrey auction preference might be compromised in an ICANN Last Resort, the maximum dollar amount they are prepared to spend should be lodged with a third party under strict confidentiality obligations, e.g. with one of the large accounting firms. The same is true for the pro-Modified Vickrey applicants. Whatever maximum dollar amount that they would have bid once contention sets were finalized can become their maximum bid in an ICANN Last Resort if need be. Likewise, if an applicants selected Private Resolution and the other member(s) of the contention set did not, they would simply bid in the ICANN Last Resort whatever they were prepared to pay in a private auction. Because Private Resolution opens up the door to creative problem solving between members of a contention set, the applicants in that contention set should be allowed to select – after contention sets are formed – to try Private Resolution. Such a selection should be unanimous and if it doesn’t lead to resolution (e.g. negotiations are attempted and fail instead of the parties using a private auction), then the ICANN Last Resort option would kick in. I hope the above is helpful and moves us a bit closer to a consensus position. Thanks. Best, Paul This message may contain information that is attorney-client privileged, attorney work product or otherwise confidential. If you are not an intended recipient, use and disclosure of this message are prohibited. If you received this transmission in error, please notify the sender by reply e-mail and delete the message and any attachments. From: Gnso-newgtld-wg <gnso-newgtld-wg-bounces@icann.org> On Behalf Of Justine Chew Sent: Monday, December 9, 2019 6:49 PM To: Austin, Donna <Donna.Austin@team.neustar> Cc: gnso-newgtld-wg@icann.org Subject: Re: [Gnso-newgtld-wg] Notes and Action Items - New gTLD Subsequent Procedures PDP WG - 02 December 2019 Thank you, Donna, for picking this up. Just in relation to Goal No. 1, on reflection, I think the text "...in which the winner ultimately overpays for the TLD" should be omitted or reworded, firstly as Donna has explained, we don't know what "overpays" actually means. Secondly, even if that is the case, why should we be concerned if an applicant chooses to "overpay". Thirdly, At-Large's concerns had to do with the situation of wealthier applicants outbidding less-wealthy applicants, thereby potentially stifling competition. So, perhaps the goal should be re-stated as "Reduce the risk of unintended outcomes from “bidding wars". As for the remaining texts, I would like to be able to review the flowcharts for the 3 Alternatives before making further comments. Thanks, Justine Chew ----- On Sat, 7 Dec 2019 at 04:57, Austin, Donna via Gnso-newgtld-wg <gnso-newgtld-wg@icann.org<mailto:gnso-newgtld-wg@icann.org>> wrote: Thanks for the notes Julie, these are particularly helpful as I wasn’t able to attend the call. I have listened to the recording and I wanted to address a couple of issues that were discussed and are captured in your notes. I don’t agree that Alternative 1 addresses the following goal: 1. 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. I personally struggle with this as a goal because it’s a subjective assessment that applicants from 2012 overpaid for a TLD. Only the successful applicant can make that judgement and if the applicant willingly entered into a private or ICANN auction of last resort they didn’t do so blindly: they had an opportunity to assess the market and combined with their own personal objectives for wanting a string made a judgement about how much they were willing to pay for the string. As I noted previously, my main issue with Alternative 1 is that the sealed bid has to be provided at the time of application, which is unfair to any applicant that ultimately finds themselves in a contention set. No-one can predict how many applications will be received and how many strings will end up in a contention set so the applicant has no information available at the time of submitting their application on which to assess the value of the TLD to them. It would be eminently fairer to all applicants to submit sealed bids at a time when more information is available that would allow them to make a more informed decision about the value of the TLD to them, which is ultimately why I proposed Alternative 2 originally. Donna Donna Austin Neustar, Inc. / Senior Policy Manager, Registry Solutions Mobile: +1 310 890 9655 donna.austin@team.neustar<mailto:donna.austin@team.neustar> / Website: home.neustar<http://www.home.neustar/> Follow Neustar: LinkedIn<http://www.linkedin.com/company/5349> / Twitter<http://www.twitter.com/neustar> Reduce your environmental footprint. Print only if necessary. ________________________________ The information contained in this email message is intended only for the use of the recipient(s) named above and may contain confidential and/or privileged information. If you are not the intended recipient you have received this email message in error and any review, dissemination, distribution, or copying of this message is strictly prohibited. If you have received this communication in error, please notify us immediately and delete the original message. From: Gnso-newgtld-wg [mailto:gnso-newgtld-wg-bounces@icann.org<mailto:gnso-newgtld-wg-bounces@icann.org>] On Behalf Of Julie Hedlund Sent: Monday, December 02, 2019 8:52 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 - 02 December 2019 Dear Working Group members, Please see below the notes from the meeting on 02 December 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/2019-12-02+New+gTLD+Subsequent+Procedures+PDP<https://urldefense.proofpoint.com/v2/url?u=https-3A__community.icann.org_display_NGSPP_2019-2D12-2D02-2BNew-2BgTLD-2BSubsequent-2BProcedures-2BPDP&d=DwMGaQ&c=MOptNlVtIETeDALC_lULrw&r=CwipU91YB6EkpFXK9ynnT_QUef4yC5p7jpsDm8cU97g&m=JoTKufMJCg61DXDXCrwRY_MAaLTb_ZSrDH7Fzgwjrls&s=_51UB1f5GcK4eSMvs-LveU9QVE2_2nruA-sSl33kYfs&e=>. Kind regards, Julie Julie Hedlund, Policy Director Notes and Action Items: Actions: ACTION ITEM 1: Add a third alternative. ACTION ITEM 2: Add another goal (#7): “Increase efficiencies in application evaluation by way of understanding the contention set?” ACTION ITEM 3: Create a flow chart with a fictional string to show how alternative 1 would work. ACTION ITEM 4: Update the list of goals. Notes: 1. Review Agenda/Statements of Interest: Susan Payne was reappointed IPC Secretary for another year. 2. String Contention Mechanisms of Last Resort: https://docs.google.com/document/d/16qDoiK6vydQp6a0v9tMvU2l5fcypJY24hCzTIVTj... [docs.google.com]<https://urldefense.proofpoint.com/v2/url?u=https-3A__docs.google.com_documen...> What is the issue we are trying to address: -- The Working Group has discussed a number of potential issues with the mechanisms of last resort used in the 2012 New gTLD Round. These issues are captured in the Supplemental Initial Report. -- Although the Working Group ultimately believes that when there is string contention, an auction process should be used to select the Registry Operator invited to enter into a Registry Agreement with ICANN, the Working Group is still discussing what forms of private resolution should be allowed (if any), the specific type of auction to be used, and the timing of such an auction. Policy Goals / What the WG is Seeking to Accomplish: -- The WG is largely supportive of existing Implementation Guideline F: 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. Other goals include: 1. Reduce the risk of “bidding wars” in which the winner ultimately overpays for the TLD. * 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. b. Which could include, making it easier to implement “multipliers” for certain types of applicants, such as those eligible for Applicant Support. -- 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: -- Do we still need iii)? An alternative may be, "The ICANN Board may use expert panels to make Community Priority Evaluation determinations." This may also be dependent on recommendations on the new appeals mechanism. -- ICANN Board says it does not make policy. Its decision would be subject to RFR and IRP - very messy so it may be better to stick with what we developed earlier. -- This isn’t about the Board making policy, but making it clear that it’s an auction process rather than the Board making a decision. -- There should be a reference instead to Auction of last resort. -- Agree they are good goals so suggest removing possible description What are we Proposing? -- The Working Group is leaning towards recommending a sealed-bid auction as the ultimate form of auction used as a mechanism to resolve string contention. When a sealed-bid auction is held where bids are submitted without knowing the bid of others in the auction (e.g., prior to evaluating any of the applications) it is also called a Vickrey Auction. A sealed-bid auction can also be used as a mechanism of last resort and at the end of the process. -- With a sealed-bid auction, each applicant submits a sealed bid, stating the amount that they are willing to pay for the TLD. The ultimate “winner” pays the amount submitted by the second-highest bidder.. -- Regardless of when the sealed bid auction is held, if there are one or more Community-based Applications, that/those application(s) would need to be processed first through Community Priority Evaluation before looking at the auction bids. Alternative 1 - Vickrey Auction (No Private Resolution) -- Addresses goals 1, 2, 4, and 6. -- The principle pro here is the seemingly near elimination of private resolution. However, the principle con is the substantial complications this approach introduces (see Additional Considerations, Mostly For Alternative 1 below). Other cons are that other forms of private resolution might be impacted (e.g., joint ventures, string change, etc.) in seeking to eliminate private resolution for financial benefit and that bids are submitted with no contextual information. Alternative 2 - Sealed-Bid Auction allowing Private Resolution -- It seems to be supportive of, or at least not impede, 1, 2, and 6, but in a less pronounced manner as it relates to Alternative 1; the maker of this Alternative has acknowledged that it does not fully address concerns around potential collusion and profiteering on application withdrawals. -- However, some benefits are likely derived by obtaining sealed bids (which can reduce the incentive for all parties to agree to private resolution, if an applicant already knows they have the highest bid). The other main pro here is simplicity - most other processes remain unaffected. Discussion: -- Re: Alternative 2: First bullet point and third bullet point seem incompatible. Third bullet point: “Applicants would still have an opportunity to resolve the contention set through other means such as private auction, a joint venture arrangement or to choose another string as was suggested for ‘brands’ of the same name.” -- Assuming you stayed in only those applicants who stayed in would be revealed on reveal day. So you could still have private resolution. -- For clarity, the third bullet could be swapped with the fourth bullet and add “post reveal day”. In third bullet point, after "opportunity", you would need to insert "after reveal day" or something to clarify that parties become known. -- Question: Wasn’t one of the proposals to outlaw private auctions? So not sure why we are still allowing private resolution. Answer: If we went with alternative 1 we would eliminate private resolution, but not for alternative 2. So that is one of the drawbacks with alternative 2. -- Thought alternative 2 was to allow participants to know how many contention sets there are. Add as a third alternative: Alternative three could remove some of the elements about private resolution. -- They may not resolve privately and should only have a limited period to resolve. If not resolved in a limited period, it should proceed to the sealed bid winner. I am not seeing the time limit in alternative 2 though. Is it there? -- Question: How would the timing work with a string contention objection process? -- How could private auctions be prevented? -- Objections should not be triggered until a winner (or a private resolution winner) is identified. -- Re: Alternative 2 there should be a limited time for private resolution. -- Helpful to put these alternatives out for public comment and indicate whether the WG has a preference. -- Re: Alternative 2 -- Question: For string confusion objections those would have to be heard right away. Additional Considerations: Public Comment: Comments from the public are solicited on all applications regardless of where they are placed in the queue. To do it otherwise would mean opening up separate public comment periods depending on whether there is a need to go to the second bidder, and that would be impossible to monitor. Discussion: -- Strongly support 1 public comment period, for the exact same length of time for all. -- Impractical to have multiple public comments. String Similarity Evaluation: Discussion: -- Don’t see how this fits with the notion of closed bids and timing. You have a scenario where you have some who know who they are bidding against and everyone else doesn’t. -- In the scenario where the result of a string similarity evaluation is that some would have insight into who is in the set -- this is an unfair result. -- Which is why getting every applicant to submit a bid at the point of application is something to consider, even though it may be cumbersome for many. -- What if this fact situation should default to sealed bid only? -- Why would they not be all announced at the same time? -- So we are proposing to treat some applicants differently from others? That does not seem to be in line with the Bylaws. -- Wouldn’t alternative 1 solve this issue? -- What about plurals? -- There was only one case in 2012 that was found to be similar (unicorn/unicom). -- Why string similarity evaluation after reveal day? Why not make it before reveal day? That is a possibility. -- is string similarity not subject to accountability mechanisms and appeals? would that not “reveal” it in some manner? -- Agree with that suggestion re string similarity evaluation occurring first and before reveal day. bids would have to be in before appeal. Objections: Objections on the highest bidder’s application must be filed within the objection period. With respect to objections to the other applications, ICANN would create a system for the filing of “an intent to file an objection.” Discussion: -- Question: What happens when someone indicates that they are filing a community objection and they are filing it against all of the applicants for a string. Answer: All applicants should have a chance to respond. Add text to relay your comment on "can indicate that an objection will apply to all applications for same string"? -- Objections should not come into full proceedings unless and until there is a winner - it's a huge waste of time and money if it does proceed but private parties need to know what the value of the string may be. -- Some concern about not having to submit the objections on a standard timeline, although support not engaging fees or panels until the objection is necessary, based on bidder ordering . -- “time” may benefit some as they build their case. Or could the “intent to file” require some key points that will be included in the objection filing? -- Question: We are agreeing on the principle that the intent to object is a good idea, but when would that happen? Would one party have to state the type of objection and the grounds? Could it just be a party filing very general intent to objection concerning a risk associated with that application. Would there be a panel for an intent to object process? Answer: Proposal was that the objection would be “bare bones”. There would be no panel if it was just an intent to object to one application, but if for all applications (to the string) then one could request a panel. You file your objection against the applicant first in the queue and an intent to file against the others in the queue. Or, you could say I have the same objection to all of the applicants/string. -- Important for private parties in resolution to know that there is an intent to object (but that doesn’t pertain to alternative 1 as there is no private resolution). -- The objection should be submitted within a certain time period. -- The nature of the applicant is important. It's not just the existence of the string. It depends on who is operating it and what the purpose of the tld as stated in the application in Question 18 answers and services to be provided in answer to Question 23. There should be an intent to object process prior to determining the order of the queue with no panel convened. Other complications: Objections if there is more than one Community Application String Confusion Objection Results in the Creation of a New Contention Set or Adds to an Existing Contention Set Appeals/Accountability Mechanisms Applicant Support Program Discussion: -- Seems that these are all related to the attempt to gain efficiencies to know the order of the contention sets. If you don’t need to know the order then you could leave the program untouched. If you go back to the goals knowing the order of the contention sets goes to goals 3, 4, and 5. -- Add a goal: “Increase efficiencies in application evaluation by way of understanding the contention set?” -- Note that alternative 1 would eliminate the goal to allow contention resolution. “If there is contention for strings, applicants may: i) resolve contention between them within a pre-established timeframe” _______________________________________________ Gnso-newgtld-wg mailing list Gnso-newgtld-wg@icann.org<mailto:Gnso-newgtld-wg@icann.org> https://mm.icann.org/mailman/listinfo/gnso-newgtld-wg _______________________________________________ By submitting your personal data, you consent to the processing of your personal data for purposes of subscribing to this mailing list accordance with the ICANN Privacy Policy (https://www.icann.org/privacy/policy) and the website Terms of Service (https://www.icann.org/privacy/tos). 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Hi Paul, Just confirming that we’ve received your helpful email on the SubPro WG email distribution list. Kind regards, Julie From: Gnso-newgtld-wg <gnso-newgtld-wg-bounces@icann.org> on behalf of "McGrady, Paul D." <PMcGrady@taftlaw.com> Date: Tuesday, December 10, 2019 at 5:25 PM To: Justine Chew <justine.chew@gmail.com>, "Austin, Donna" <Donna.Austin@team.neustar> Cc: "gnso-newgtld-wg@icann.org" <gnso-newgtld-wg@icann.org> Subject: Re: [Gnso-newgtld-wg] Notes and Action Items - New gTLD Subsequent Procedures PDP WG - 02 December 2019 Hi All! I have really enjoyed the conversation on the calls and on this list regarding auctions. It is a great reminder of how rich in talent our community is. Below I have summarized some of the pros and cons of each process discussed (these are not meant to be exhaustive or dismissive, just my own thoughts which I encourage others to supplement). I’ve also proposed a possible way forward that could disrupt the current default status quo (ICANN Last Resort auction found in 2012 AGB, but which in my opinion is based on the false premise that ICANN “owns” all the undelegated gTLD space) but not force everyone into a one-sized-fits-all solution. I hope that the below encourages communication and helps us reach a consensus position that everyone in the WG can stand behind. Auction Type Strengths Weaknesses Vickrey (place maximum bid amount at the time application is filed) * Straightforward. * Eliminates significant delays caused by contention sets. * Favors single TLD applicants. * Favors deep pockets. * Bad for .brand applicants who could end up paying significantly more * Enriches ICANN (which has never justified why it thinks it “owns” the undelegated TLD resource). Modified Vickrey (place maximum bid amount at the time contention sets are formed) * Straightforward. * Eliminates much of the delay caused by contention sets * Eliminates ICANN Last Resort auctions. * Allows multiple TLD applicants to use resources more efficiently. * Favors deep pockets. * Enriches ICANN (which has never justified why it thinks it “owns” the undelegated TLD resource). Private Resolution (could be dollar amounts, acquisitions, other consideration, etc.) * Allows for full creativity to resolve contention sets. * Doesn’t enrich ICANN (which has never justified why it thinks it “owns” the undelegated TLD resource). * The parties may agree on an auction process to resolve the contention set or they may agree instead to negotiate toward a mutually rewarding outcome. * There have been rumors of gaming in the last round. * Favors deep pockets. ICANN Last Resort (status quo from 2012 AGB) None. * Favors deep pockets. * Enriches ICANN (which has never justified why it thinks it “owns” the undelegated TLD resource). A possible way forward: Choice. Let each applicant choose how they would like to proceed. If all of the other members in the contention set make the same choice, that is the method that will be used. If, however, the members of the contention set do not agree, then ICANN Last Resort (status quo) will be default. There is no harm to the pro-Vickrey applicants in this option since whatever dollar amount they designated in their applications can, if they so choose, become their maximum dollar amount in an ICANN Last Resort if need be. Since an applicant submitting a Vickrey auction preference might be compromised in an ICANN Last Resort, the maximum dollar amount they are prepared to spend should be lodged with a third party under strict confidentiality obligations, e.g. with one of the large accounting firms. The same is true for the pro-Modified Vickrey applicants. Whatever maximum dollar amount that they would have bid once contention sets were finalized can become their maximum bid in an ICANN Last Resort if need be. Likewise, if an applicants selected Private Resolution and the other member(s) of the contention set did not, they would simply bid in the ICANN Last Resort whatever they were prepared to pay in a private auction. Because Private Resolution opens up the door to creative problem solving between members of a contention set, the applicants in that contention set should be allowed to select – after contention sets are formed – to try Private Resolution. Such a selection should be unanimous and if it doesn’t lead to resolution (e.g. negotiations are attempted and fail instead of the parties using a private auction), then the ICANN Last Resort option would kick in. I hope the above is helpful and moves us a bit closer to a consensus position. Thanks. Best, Paul This message may contain information that is attorney-client privileged, attorney work product or otherwise confidential. If you are not an intended recipient, use and disclosure of this message are prohibited. If you received this transmission in error, please notify the sender by reply e-mail and delete the message and any attachments. From: Gnso-newgtld-wg <gnso-newgtld-wg-bounces@icann.org> On Behalf Of Justine Chew Sent: Monday, December 9, 2019 6:49 PM To: Austin, Donna <Donna.Austin@team.neustar> Cc: gnso-newgtld-wg@icann.org Subject: Re: [Gnso-newgtld-wg] Notes and Action Items - New gTLD Subsequent Procedures PDP WG - 02 December 2019 Thank you, Donna, for picking this up. Just in relation to Goal No. 1, on reflection, I think the text "...in which the winner ultimately overpays for the TLD" should be omitted or reworded, firstly as Donna has explained, we don't know what "overpays" actually means. Secondly, even if that is the case, why should we be concerned if an applicant chooses to "overpay". Thirdly, At-Large's concerns had to do with the situation of wealthier applicants outbidding less-wealthy applicants, thereby potentially stifling competition. So, perhaps the goal should be re-stated as "Reduce the risk of unintended outcomes from “bidding wars". As for the remaining texts, I would like to be able to review the flowcharts for the 3 Alternatives before making further comments. Thanks, Justine Chew ----- On Sat, 7 Dec 2019 at 04:57, Austin, Donna via Gnso-newgtld-wg <gnso-newgtld-wg@icann.org<mailto:gnso-newgtld-wg@icann.org>> wrote: Thanks for the notes Julie, these are particularly helpful as I wasn’t able to attend the call. I have listened to the recording and I wanted to address a couple of issues that were discussed and are captured in your notes. I don’t agree that Alternative 1 addresses the following goal: 1. 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. I personally struggle with this as a goal because it’s a subjective assessment that applicants from 2012 overpaid for a TLD. Only the successful applicant can make that judgement and if the applicant willingly entered into a private or ICANN auction of last resort they didn’t do so blindly: they had an opportunity to assess the market and combined with their own personal objectives for wanting a string made a judgement about how much they were willing to pay for the string. As I noted previously, my main issue with Alternative 1 is that the sealed bid has to be provided at the time of application, which is unfair to any applicant that ultimately finds themselves in a contention set. No-one can predict how many applications will be received and how many strings will end up in a contention set so the applicant has no information available at the time of submitting their application on which to assess the value of the TLD to them. It would be eminently fairer to all applicants to submit sealed bids at a time when more information is available that would allow them to make a more informed decision about the value of the TLD to them, which is ultimately why I proposed Alternative 2 originally. Donna Donna Austin Neustar, Inc. / Senior Policy Manager, Registry Solutions Mobile: +1 310 890 9655 donna.austin@team.neustar<mailto:donna.austin@team.neustar> / Website: home.neustar<http://www.home.neustar/> Follow Neustar: LinkedIn<http://www.linkedin.com/company/5349> / Twitter<http://www.twitter.com/neustar> Reduce your environmental footprint. Print only if necessary. ________________________________ The information contained in this email message is intended only for the use of the recipient(s) named above and may contain confidential and/or privileged information. If you are not the intended recipient you have received this email message in error and any review, dissemination, distribution, or copying of this message is strictly prohibited. If you have received this communication in error, please notify us immediately and delete the original message. From: Gnso-newgtld-wg [mailto:gnso-newgtld-wg-bounces@icann.org<mailto:gnso-newgtld-wg-bounces@icann.org>] On Behalf Of Julie Hedlund Sent: Monday, December 02, 2019 8:52 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 - 02 December 2019 Dear Working Group members, Please see below the notes from the meeting on 02 December 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/2019-12-02+New+gTLD+Subsequent+Procedures+PDP<https://urldefense.proofpoint.com/v2/url?u=https-3A__community.icann.org_display_NGSPP_2019-2D12-2D02-2BNew-2BgTLD-2BSubsequent-2BProcedures-2BPDP&d=DwMGaQ&c=MOptNlVtIETeDALC_lULrw&r=CwipU91YB6EkpFXK9ynnT_QUef4yC5p7jpsDm8cU97g&m=JoTKufMJCg61DXDXCrwRY_MAaLTb_ZSrDH7Fzgwjrls&s=_51UB1f5GcK4eSMvs-LveU9QVE2_2nruA-sSl33kYfs&e=>. Kind regards, Julie Julie Hedlund, Policy Director Notes and Action Items: Actions: ACTION ITEM 1: Add a third alternative. ACTION ITEM 2: Add another goal (#7): “Increase efficiencies in application evaluation by way of understanding the contention set?” ACTION ITEM 3: Create a flow chart with a fictional string to show how alternative 1 would work. ACTION ITEM 4: Update the list of goals. Notes: 1. Review Agenda/Statements of Interest: Susan Payne was reappointed IPC Secretary for another year. 2. String Contention Mechanisms of Last Resort: https://docs.google.com/document/d/16qDoiK6vydQp6a0v9tMvU2l5fcypJY24hCzTIVTj... [docs.google.com]<https://urldefense.proofpoint.com/v2/url?u=https-3A__docs.google.com_documen...> What is the issue we are trying to address: -- The Working Group has discussed a number of potential issues with the mechanisms of last resort used in the 2012 New gTLD Round. These issues are captured in the Supplemental Initial Report. -- Although the Working Group ultimately believes that when there is string contention, an auction process should be used to select the Registry Operator invited to enter into a Registry Agreement with ICANN, the Working Group is still discussing what forms of private resolution should be allowed (if any), the specific type of auction to be used, and the timing of such an auction. Policy Goals / What the WG is Seeking to Accomplish: -- The WG is largely supportive of existing Implementation Guideline F: 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. Other goals include: 1. Reduce the risk of “bidding wars” in which the winner ultimately overpays for the TLD. * 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. b. Which could include, making it easier to implement “multipliers” for certain types of applicants, such as those eligible for Applicant Support. -- 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: -- Do we still need iii)? An alternative may be, "The ICANN Board may use expert panels to make Community Priority Evaluation determinations." This may also be dependent on recommendations on the new appeals mechanism. -- ICANN Board says it does not make policy. Its decision would be subject to RFR and IRP - very messy so it may be better to stick with what we developed earlier. -- This isn’t about the Board making policy, but making it clear that it’s an auction process rather than the Board making a decision. -- There should be a reference instead to Auction of last resort. -- Agree they are good goals so suggest removing possible description What are we Proposing? -- The Working Group is leaning towards recommending a sealed-bid auction as the ultimate form of auction used as a mechanism to resolve string contention. When a sealed-bid auction is held where bids are submitted without knowing the bid of others in the auction (e.g., prior to evaluating any of the applications) it is also called a Vickrey Auction. A sealed-bid auction can also be used as a mechanism of last resort and at the end of the process. -- With a sealed-bid auction, each applicant submits a sealed bid, stating the amount that they are willing to pay for the TLD. The ultimate “winner” pays the amount submitted by the second-highest bidder.. -- Regardless of when the sealed bid auction is held, if there are one or more Community-based Applications, that/those application(s) would need to be processed first through Community Priority Evaluation before looking at the auction bids. Alternative 1 - Vickrey Auction (No Private Resolution) -- Addresses goals 1, 2, 4, and 6. -- The principle pro here is the seemingly near elimination of private resolution. However, the principle con is the substantial complications this approach introduces (see Additional Considerations, Mostly For Alternative 1 below). Other cons are that other forms of private resolution might be impacted (e.g., joint ventures, string change, etc.) in seeking to eliminate private resolution for financial benefit and that bids are submitted with no contextual information. Alternative 2 - Sealed-Bid Auction allowing Private Resolution -- It seems to be supportive of, or at least not impede, 1, 2, and 6, but in a less pronounced manner as it relates to Alternative 1; the maker of this Alternative has acknowledged that it does not fully address concerns around potential collusion and profiteering on application withdrawals. -- However, some benefits are likely derived by obtaining sealed bids (which can reduce the incentive for all parties to agree to private resolution, if an applicant already knows they have the highest bid). The other main pro here is simplicity - most other processes remain unaffected. Discussion: -- Re: Alternative 2: First bullet point and third bullet point seem incompatible. Third bullet point: “Applicants would still have an opportunity to resolve the contention set through other means such as private auction, a joint venture arrangement or to choose another string as was suggested for ‘brands’ of the same name.” -- Assuming you stayed in only those applicants who stayed in would be revealed on reveal day. So you could still have private resolution. -- For clarity, the third bullet could be swapped with the fourth bullet and add “post reveal day”. In third bullet point, after "opportunity", you would need to insert "after reveal day" or something to clarify that parties become known. -- Question: Wasn’t one of the proposals to outlaw private auctions? So not sure why we are still allowing private resolution. Answer: If we went with alternative 1 we would eliminate private resolution, but not for alternative 2. So that is one of the drawbacks with alternative 2. -- Thought alternative 2 was to allow participants to know how many contention sets there are. Add as a third alternative: Alternative three could remove some of the elements about private resolution. -- They may not resolve privately and should only have a limited period to resolve. If not resolved in a limited period, it should proceed to the sealed bid winner. I am not seeing the time limit in alternative 2 though. Is it there? -- Question: How would the timing work with a string contention objection process? -- How could private auctions be prevented? -- Objections should not be triggered until a winner (or a private resolution winner) is identified. -- Re: Alternative 2 there should be a limited time for private resolution. -- Helpful to put these alternatives out for public comment and indicate whether the WG has a preference. -- Re: Alternative 2 -- Question: For string confusion objections those would have to be heard right away. Additional Considerations: Public Comment: Comments from the public are solicited on all applications regardless of where they are placed in the queue. To do it otherwise would mean opening up separate public comment periods depending on whether there is a need to go to the second bidder, and that would be impossible to monitor. Discussion: -- Strongly support 1 public comment period, for the exact same length of time for all. -- Impractical to have multiple public comments. String Similarity Evaluation: Discussion: -- Don’t see how this fits with the notion of closed bids and timing. You have a scenario where you have some who know who they are bidding against and everyone else doesn’t. -- In the scenario where the result of a string similarity evaluation is that some would have insight into who is in the set -- this is an unfair result. -- Which is why getting every applicant to submit a bid at the point of application is something to consider, even though it may be cumbersome for many. -- What if this fact situation should default to sealed bid only? -- Why would they not be all announced at the same time? -- So we are proposing to treat some applicants differently from others? That does not seem to be in line with the Bylaws. -- Wouldn’t alternative 1 solve this issue? -- What about plurals? -- There was only one case in 2012 that was found to be similar (unicorn/unicom). -- Why string similarity evaluation after reveal day? Why not make it before reveal day? That is a possibility. -- is string similarity not subject to accountability mechanisms and appeals? would that not “reveal” it in some manner? -- Agree with that suggestion re string similarity evaluation occurring first and before reveal day. bids would have to be in before appeal. Objections: Objections on the highest bidder’s application must be filed within the objection period. With respect to objections to the other applications, ICANN would create a system for the filing of “an intent to file an objection.” Discussion: -- Question: What happens when someone indicates that they are filing a community objection and they are filing it against all of the applicants for a string. Answer: All applicants should have a chance to respond. Add text to relay your comment on "can indicate that an objection will apply to all applications for same string"? -- Objections should not come into full proceedings unless and until there is a winner - it's a huge waste of time and money if it does proceed but private parties need to know what the value of the string may be. -- Some concern about not having to submit the objections on a standard timeline, although support not engaging fees or panels until the objection is necessary, based on bidder ordering . -- “time” may benefit some as they build their case. Or could the “intent to file” require some key points that will be included in the objection filing? -- Question: We are agreeing on the principle that the intent to object is a good idea, but when would that happen? Would one party have to state the type of objection and the grounds? Could it just be a party filing very general intent to objection concerning a risk associated with that application. Would there be a panel for an intent to object process? Answer: Proposal was that the objection would be “bare bones”. There would be no panel if it was just an intent to object to one application, but if for all applications (to the string) then one could request a panel. You file your objection against the applicant first in the queue and an intent to file against the others in the queue. Or, you could say I have the same objection to all of the applicants/string. -- Important for private parties in resolution to know that there is an intent to object (but that doesn’t pertain to alternative 1 as there is no private resolution). -- The objection should be submitted within a certain time period. -- The nature of the applicant is important. It's not just the existence of the string. It depends on who is operating it and what the purpose of the tld as stated in the application in Question 18 answers and services to be provided in answer to Question 23. There should be an intent to object process prior to determining the order of the queue with no panel convened. Other complications: Objections if there is more than one Community Application String Confusion Objection Results in the Creation of a New Contention Set or Adds to an Existing Contention Set Appeals/Accountability Mechanisms Applicant Support Program Discussion: -- Seems that these are all related to the attempt to gain efficiencies to know the order of the contention sets. If you don’t need to know the order then you could leave the program untouched. If you go back to the goals knowing the order of the contention sets goes to goals 3, 4, and 5. -- Add a goal: “Increase efficiencies in application evaluation by way of understanding the contention set?” -- Note that alternative 1 would eliminate the goal to allow contention resolution. “If there is contention for strings, applicants may: i) resolve contention between them within a pre-established timeframe” _______________________________________________ Gnso-newgtld-wg mailing list Gnso-newgtld-wg@icann.org<mailto:Gnso-newgtld-wg@icann.org> https://mm.icann.org/mailman/listinfo/gnso-newgtld-wg _______________________________________________ By submitting your personal data, you consent to the processing of your personal data for purposes of subscribing to this mailing list accordance with the ICANN Privacy Policy (https://www.icann.org/privacy/policy) and the website Terms of Service (https://www.icann.org/privacy/tos). 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I think the table is a great idea. If it helps clarify the discussion, under ‘Auction Type,’ I think the options could be: Sealed Bid - winner pays highest price bid Sealed Bid - Vickrey (winner pays second highest price bid) Ascending auctions - similar to the previous round Private resolution Additionally, under ‘Auction Type’ or ‘Auction Timing' as a separate table the options would be: Timing - bids submitted at time of TLD application Timing - bids submitted at near time of TLD award (after evaluation, clearing of objectionsetc) I think breaking it out this way would make the identification of strengths and weaknesses easier and clearer. Best regards, Kurt
On Dec 10, 2019, at 2:25 PM, McGrady, Paul D. <PMcGrady@taftlaw.com> wrote:
Hi All!
I have really enjoyed the conversation on the calls and on this list regarding auctions. It is a great reminder of how rich in talent our community is.
Below I have summarized some of the pros and cons of each process discussed (these are not meant to be exhaustive or dismissive, just my own thoughts which I encourage others to supplement). I’ve also proposed a possible way forward that could disrupt the current default status quo (ICANN Last Resort auction found in 2012 AGB, but which in my opinion is based on the false premise that ICANN “owns” all the undelegated gTLD space) but not force everyone into a one-sized-fits-all solution. I hope that the below encourages communication and helps us reach a consensus position that everyone in the WG can stand behind.
<>Auction Type Strengths Weaknesses Vickrey (place maximum bid amount at the time application is filed) · Straightforward. · Eliminates significant delays caused by contention sets. · Favors single TLD applicants. · Favors deep pockets. · Bad for .brand applicants who could end up paying significantly more · Enriches ICANN (which has never justified why it thinks it “owns” the undelegated TLD resource). Modified Vickrey (place maximum bid amount at the time contention sets are formed) · Straightforward. · Eliminates much of the delay caused by contention sets · Eliminates ICANN Last Resort auctions. · Allows multiple TLD applicants to use resources more efficiently. · Favors deep pockets. · Enriches ICANN (which has never justified why it thinks it “owns” the undelegated TLD resource). Private Resolution (could be dollar amounts, acquisitions, other consideration, etc.) · Allows for full creativity to resolve contention sets. · Doesn’t enrich ICANN (which has never justified why it thinks it “owns” the undelegated TLD resource). · The parties may agree on an auction process to resolve the contention set or they may agree instead to negotiate toward a mutually rewarding outcome. · There have been rumors of gaming in the last round. · Favors deep pockets. ICANN Last Resort (status quo from 2012 AGB) None. · Favors deep pockets. · Enriches ICANN (which has never justified why it thinks it “owns” the undelegated TLD resource).
A possible way forward:
Choice. Let each applicant choose how they would like to proceed. If all of the other members in the contention set make the same choice, that is the method that will be used. If, however, the members of the contention set do not agree, then ICANN Last Resort (status quo) will be default. There is no harm to the pro-Vickrey applicants in this option since whatever dollar amount they designated in their applications can, if they so choose, become their maximum dollar amount in an ICANN Last Resort if need be. Since an applicant submitting a Vickrey auction preference might be compromised in an ICANN Last Resort, the maximum dollar amount they are prepared to spend should be lodged with a third party under strict confidentiality obligations, e.g. with one of the large accounting firms.
The same is true for the pro-Modified Vickrey applicants. Whatever maximum dollar amount that they would have bid once contention sets were finalized can become their maximum bid in an ICANN Last Resort if need be.
Likewise, if an applicants selected Private Resolution and the other member(s) of the contention set did not, they would simply bid in the ICANN Last Resort whatever they were prepared to pay in a private auction.
Because Private Resolution opens up the door to creative problem solving between members of a contention set, the applicants in that contention set should be allowed to select – after contention sets are formed – to try Private Resolution. Such a selection should be unanimous and if it doesn’t lead to resolution (e.g. negotiations are attempted and fail instead of the parties using a private auction), then the ICANN Last Resort option would kick in.
I hope the above is helpful and moves us a bit closer to a consensus position. Thanks.
Best, Paul
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From: Gnso-newgtld-wg <gnso-newgtld-wg-bounces@icann.org> On Behalf Of Justine Chew Sent: Monday, December 9, 2019 6:49 PM To: Austin, Donna <Donna.Austin@team.neustar> Cc: gnso-newgtld-wg@icann.org Subject: Re: [Gnso-newgtld-wg] Notes and Action Items - New gTLD Subsequent Procedures PDP WG - 02 December 2019
Thank you, Donna, for picking this up.
Just in relation to Goal No. 1, on reflection, I think the text "...in which the winner ultimately overpays for the TLD" should be omitted or reworded, firstly as Donna has explained, we don't know what "overpays" actually means. Secondly, even if that is the case, why should we be concerned if an applicant chooses to "overpay". Thirdly, At-Large's concerns had to do with the situation of wealthier applicants outbidding less-wealthy applicants, thereby potentially stifling competition.
So, perhaps the goal should be re-stated as "Reduce the risk of unintended outcomes from “bidding wars".
As for the remaining texts, I would like to be able to review the flowcharts for the 3 Alternatives before making further comments.
Thanks,
Justine Chew -----
On Sat, 7 Dec 2019 at 04:57, Austin, Donna via Gnso-newgtld-wg <gnso-newgtld-wg@icann.org <mailto:gnso-newgtld-wg@icann.org>> wrote: Thanks for the notes Julie, these are particularly helpful as I wasn’t able to attend the call.
I have listened to the recording and I wanted to address a couple of issues that were discussed and are captured in your notes.
I don’t agree that Alternative 1 addresses the following goal: 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.
I personally struggle with this as a goal because it’s a subjective assessment that applicants from 2012 overpaid for a TLD. Only the successful applicant can make that judgement and if the applicant willingly entered into a private or ICANN auction of last resort they didn’t do so blindly: they had an opportunity to assess the market and combined with their own personal objectives for wanting a string made a judgement about how much they were willing to pay for the string.
As I noted previously, my main issue with Alternative 1 is that the sealed bid has to be provided at the time of application, which is unfair to any applicant that ultimately finds themselves in a contention set. No-one can predict how many applications will be received and how many strings will end up in a contention set so the applicant has no information available at the time of submitting their application on which to assess the value of the TLD to them.
It would be eminently fairer to all applicants to submit sealed bids at a time when more information is available that would allow them to make a more informed decision about the value of the TLD to them, which is ultimately why I proposed Alternative 2 originally.
Donna Donna Austin Neustar, Inc. / Senior Policy Manager, Registry Solutions Mobile: +1 310 890 9655 donna.austin@team.neustar <mailto:donna.austin@team.neustar> / Website: home.neustar <http://www.home.neustar/>
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From: Gnso-newgtld-wg [mailto:gnso-newgtld-wg-bounces@icann.org <mailto:gnso-newgtld-wg-bounces@icann.org>] On Behalf Of Julie Hedlund Sent: Monday, December 02, 2019 8:52 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 - 02 December 2019
Dear Working Group members,
Please see below the notes from the meeting on 02 December 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/2019-12-02+New+gTLD+Subsequent+Pro... <https://urldefense.proofpoint.com/v2/url?u=https-3A__community.icann.org_dis...>.
Kind regards, Julie Julie Hedlund, Policy Director
Notes and Action Items:
Actions:
ACTION ITEM 1: Add a third alternative. ACTION ITEM 2: Add another goal (#7): “Increase efficiencies in application evaluation by way of understanding the contention set?” ACTION ITEM 3: Create a flow chart with a fictional string to show how alternative 1 would work. ACTION ITEM 4: Update the list of goals.
Notes:
1. Review Agenda/Statements of Interest: Susan Payne was reappointed IPC Secretary for another year.
2. String Contention Mechanisms of Last Resort:https://docs.google.com/document/d/16qDoiK6vydQp6a0v9tMvU2l5fcypJY24hCzTIVTj... [docs.google.com] <https://urldefense.proofpoint.com/v2/url?u=https-3A__docs.google.com_documen...>
What is the issue we are trying to address: -- The Working Group has discussed a number of potential issues with the mechanisms of last resort used in the 2012 New gTLD Round. These issues are captured in the Supplemental Initial Report. -- Although the Working Group ultimately believes that when there is string contention, an auction process should be used to select the Registry Operator invited to enter into a Registry Agreement with ICANN, the Working Group is still discussing what forms of private resolution should be allowed (if any), the specific type of auction to be used, and the timing of such an auction.
Policy Goals / What the WG is Seeking to Accomplish: -- The WG is largely supportive of existing Implementation Guideline F: 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.
Other goals include: Reduce the risk of “bidding wars” in which the winner ultimately overpays for the TLD. Tentative, related goal for discussion: encourage applicants to bid their true value for a TLD. 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). Increase transparency. Resolve contention more quickly. Increase predictability. Encourage new entrants into the field. b. Which could include, making it easier to implement “multipliers” for certain types of applicants, such as those eligible for Applicant Support.
-- 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: -- Do we still need iii)? An alternative may be, "The ICANN Board may use expert panels to make Community Priority Evaluation determinations." This may also be dependent on recommendations on the new appeals mechanism. -- ICANN Board says it does not make policy. Its decision would be subject to RFR and IRP - very messy so it may be better to stick with what we developed earlier. -- This isn’t about the Board making policy, but making it clear that it’s an auction process rather than the Board making a decision. -- There should be a reference instead to Auction of last resort. -- Agree they are good goals so suggest removing possible description What are we Proposing? -- The Working Group is leaning towards recommending a sealed-bid auction as the ultimate form of auction used as a mechanism to resolve string contention. When a sealed-bid auction is held where bids are submitted without knowing the bid of others in the auction (e.g., prior to evaluating any of the applications) it is also called a Vickrey Auction. A sealed-bid auction can also be used as a mechanism of last resort and at the end of the process. -- With a sealed-bid auction, each applicant submits a sealed bid, stating the amount that they are willing to pay for the TLD. The ultimate “winner” pays the amount submitted by the second-highest bidder.. -- Regardless of when the sealed bid auction is held, if there are one or more Community-based Applications, that/those application(s) would need to be processed first through Community Priority Evaluation before looking at the auction bids.
Alternative 1 - Vickrey Auction (No Private Resolution)
-- Addresses goals 1, 2, 4, and 6. -- The principle pro here is the seemingly near elimination of private resolution. However, the principle con is the substantial complications this approach introduces (see Additional Considerations, Mostly For Alternative 1 below). Other cons are that other forms of private resolution might be impacted (e.g., joint ventures, string change, etc.) in seeking to eliminate private resolution for financial benefit and that bids are submitted with no contextual information.
Alternative 2 - Sealed-Bid Auction allowing Private Resolution
-- It seems to be supportive of, or at least not impede, 1, 2, and 6, but in a less pronounced manner as it relates to Alternative 1; the maker of this Alternative has acknowledged that it does not fully address concerns around potential collusion and profiteering on application withdrawals. -- However, some benefits are likely derived by obtaining sealed bids (which can reduce the incentive for all parties to agree to private resolution, if an applicant already knows they have the highest bid). The other main pro here is simplicity - most other processes remain unaffected.
Discussion: -- Re: Alternative 2: First bullet point and third bullet point seem incompatible. Third bullet point: “Applicants would still have an opportunity to resolve the contention set through other means such as private auction, a joint venture arrangement or to choose another string as was suggested for ‘brands’ of the same name.” -- Assuming you stayed in only those applicants who stayed in would be revealed on reveal day. So you could still have private resolution. -- For clarity, the third bullet could be swapped with the fourth bullet and add “post reveal day”. In third bullet point, after "opportunity", you would need to insert "after reveal day" or something to clarify that parties become known. -- Question: Wasn’t one of the proposals to outlaw private auctions? So not sure why we are still allowing private resolution. Answer: If we went with alternative 1 we would eliminate private resolution, but not for alternative 2. So that is one of the drawbacks with alternative 2. -- Thought alternative 2 was to allow participants to know how many contention sets there are. Add as a third alternative: Alternative three could remove some of the elements about private resolution. -- They may not resolve privately and should only have a limited period to resolve. If not resolved in a limited period, it should proceed to the sealed bid winner. I am not seeing the time limit in alternative 2 though. Is it there? -- Question: How would the timing work with a string contention objection process? -- How could private auctions be prevented? -- Objections should not be triggered until a winner (or a private resolution winner) is identified. -- Re: Alternative 2 there should be a limited time for private resolution. -- Helpful to put these alternatives out for public comment and indicate whether the WG has a preference. -- Re: Alternative 2 -- Question: For string confusion objections those would have to be heard right away.
Additional Considerations:
Public Comment: Comments from the public are solicited on all applications regardless of where they are placed in the queue. To do it otherwise would mean opening up separate public comment periods depending on whether there is a need to go to the second bidder, and that would be impossible to monitor.
Discussion: -- Strongly support 1 public comment period, for the exact same length of time for all. -- Impractical to have multiple public comments.
String Similarity Evaluation:
Discussion: -- Don’t see how this fits with the notion of closed bids and timing. You have a scenario where you have some who know who they are bidding against and everyone else doesn’t. -- In the scenario where the result of a string similarity evaluation is that some would have insight into who is in the set -- this is an unfair result. -- Which is why getting every applicant to submit a bid at the point of application is something to consider, even though it may be cumbersome for many. -- What if this fact situation should default to sealed bid only? -- Why would they not be all announced at the same time? -- So we are proposing to treat some applicants differently from others? That does not seem to be in line with the Bylaws. -- Wouldn’t alternative 1 solve this issue? -- What about plurals? -- There was only one case in 2012 that was found to be similar (unicorn/unicom). -- Why string similarity evaluation after reveal day? Why not make it before reveal day? That is a possibility. -- is string similarity not subject to accountability mechanisms and appeals? > would that not “reveal” it in some manner? -- Agree with that suggestion re string similarity evaluation occurring first and before reveal day. bids would have to be in before appeal.
Objections: Objections on the highest bidder’s application must be filed within the objection period. With respect to objections to the other applications, ICANN would create a system for the filing of “an intent to file an objection.”
Discussion: -- Question: What happens when someone indicates that they are filing a community objection and they are filing it against all of the applicants for a string. Answer: All applicants should have a chance to respond. Add text to relay your comment on "can indicate that an objection will apply to all applications for same string"? > -- Objections should not come into full proceedings unless and until there is a winner - it's a huge waste of time and money if it does proceed but private parties need to know what the value of the string may be. -- Some concern about not having to submit the objections on a standard timeline, although support not engaging fees or panels until the objection is necessary, based on bidder ordering > . -- “time” may benefit some as they build their case. Or could the “intent to file” require some key points that will be included in the objection filing? -- Question: We are agreeing on the principle that the intent to object is a good idea, but when would that happen? Would one party have to state the type of objection and the grounds? Could it just be a party filing very general intent to objection concerning a risk associated with that application. Would there be a panel for an intent to object process? Answer: Proposal was that the objection would be “bare bones”. There would be no panel if it was just an intent to object to one application, but if for all applications (to the string) then one could request a panel. You file your objection against the applicant first in the queue and an intent to file against the others in the queue. Or, you could say I have the same objection to all of the applicants/string. -- Important for private parties in resolution to know that there is an intent to object (but that doesn’t pertain to alternative 1 as there is no private resolution). -- The objection should be submitted within a certain time period. -- The nature of the applicant is important. It's not just the existence of the string. It depends on who is operating it and what the purpose of the tld as stated in the application in Question 18 answers and services to be provided in answer to Question 23. There should be an intent to object process prior to determining the order of the queue with no panel convened.
Other complications: Objections if there is more than one Community Application String Confusion Objection Results in the Creation of a New Contention Set or Adds to an Existing Contention Set Appeals/Accountability Mechanisms Applicant Support Program
Discussion: -- Seems that these are all related to the attempt to gain efficiencies to know the order of the contention sets. If you don’t need to know the order then you could leave the program untouched. If you go back to the goals knowing the order of the contention sets goes to goals 3, 4, and 5. -- Add a goal: “Increase efficiencies in application evaluation by way of understanding the contention set?” -- Note that alternative 1 would eliminate the goal to allow contention resolution. “If there is contention for strings, applicants may: i) resolve contention between them within a pre-established timeframe”
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I fully support Paul’s choice model and have added a few more pros and cons to the table. In the interest of equity, I even included a “pro” in the ICANN Auction of Last Resort category because I know some folks on here believe there is a hypothetical problem with “applicants being paid to lose.” The Auction of Last Resort can be effective against any perception that this might be a problem because applicants must ALL agree to any other mechanism. I generally support Kurt’s additions, with a few questions/suggestions in red. I’m going to be late for the call that starts shortly… Kristine From: Gnso-newgtld-wg <gnso-newgtld-wg-bounces@icann.org> On Behalf Of Kurt Pritz Sent: Thursday, December 12, 2019 11:35 AM To: McGrady, Paul D. <PMcGrady@taftlaw.com> Cc: gnso-newgtld-wg@icann.org Subject: Re: [Gnso-newgtld-wg] Notes and Action Items - New gTLD Subsequent Procedures PDP WG - 02 December 2019 I think the table is a great idea. If it helps clarify the discussion, under ‘Auction Type,’ I think the options could be: Sealed Bid - winner pays highest price bid to ICANN (why would the winner not pay the second highest price…did I miss something? I think this option is more about timing, not any other change to the Vickrey model) Sealed Bid - Vickrey (winner pays second highest price bid to ICANN) Ascending auctions (paid to ICANN) - similar to the previous round Private resolution (fully private...notably, participants could self-select a sealed bid auction as their private auction mechanism of choice) Additionally, under ‘Auction Type’ or ‘Auction Timing' as a separate table the options would be: (I do like the idea of making this clear in the chart) Timing - bids submitted at time of TLD application Timing - bids submitted at near time of TLD award (after evaluation, clearing of objectionsetc) I think breaking it out this way would make the identification of strengths and weaknesses easier and clearer. Best regards, Kurt On Dec 10, 2019, at 2:25 PM, McGrady, Paul D. <PMcGrady@taftlaw.com<mailto:PMcGrady@taftlaw.com>> wrote: Hi All! I have really enjoyed the conversation on the calls and on this list regarding auctions. It is a great reminder of how rich in talent our community is. Below I have summarized some of the pros and cons of each process discussed (these are not meant to be exhaustive or dismissive, just my own thoughts which I encourage others to supplement). I’ve also proposed a possible way forward that could disrupt the current default status quo (ICANN Last Resort auction found in 2012 AGB, but which in my opinion is based on the false premise that ICANN “owns” all the undelegated gTLD space) but not force everyone into a one-sized-fits-all solution. I hope that the below encourages communication and helps us reach a consensus position that everyone in the WG can stand behind. Auction Type Strengths Weaknesses Vickrey (place maximum bid amount at the time application is filed) • Straightforward. • Eliminates significant delays caused by contention sets. • Favors single TLD applicants. • Favors deep pockets. • Bad for .brand applicants who could end up paying significantly more • Enriches ICANN (which has never justified why it thinks it “owns” the undelegated TLD resource). · Assumes no changes in the round/procedures/ other circumstances between filing of the application and the auction. · Assumes money is the only way to solve a contention. Modified Vickrey (place maximum bid amount at the time contention sets are formed) • Straightforward. • Eliminates much of the delay caused by contention sets • Eliminates ICANN Last Resort auctions. • Allows multiple TLD applicants to use resources more efficiently. • Favors deep pockets. • Enriches ICANN (which has never justified why it thinks it “owns” the undelegated TLD resource). · Assumes money is the only way to solve a contention. Private Resolution (could be dollar amounts, acquisitions, other consideration, etc.) • Allows for full creativity to resolve contention sets. • Doesn’t enrich ICANN (which has never justified why it thinks it “owns” the undelegated TLD resource). • The parties may agree on an auction process to resolve the contention set or they may agree instead to negotiate toward a mutually rewarding outcome. • There have been rumors of gaming in the last round. • Favors deep pockets. Amend to say: may favor deep pockets…private resolutions do not require the expenditure of ANY cash. ICANN Last Resort (status quo from 2012 AGB) None. · No applicant “gets paid to lose.” • Favors deep pockets. • Enriches ICANN (which has never justified why it thinks it “owns” the undelegated TLD resource). A possible way forward: Choice. Let each applicant choose how they would like to proceed. If all of the other members in the contention set make the same choice, that is the method that will be used. If, however, the members of the contention set do not agree, then ICANN Last Resort (status quo) will be default. There is no harm to the pro-Vickrey applicants in this option since whatever dollar amount they designated in their applications can, if they so choose, become their maximum dollar amount in an ICANN Last Resort if need be. Since an applicant submitting a Vickrey auction preference might be compromised in an ICANN Last Resort, the maximum dollar amount they are prepared to spend should be lodged with a third party under strict confidentiality obligations, e.g. with one of the large accounting firms. The same is true for the pro-Modified Vickrey applicants. Whatever maximum dollar amount that they would have bid once contention sets were finalized can become their maximum bid in an ICANN Last Resort if need be. Likewise, if an applicants selected Private Resolution and the other member(s) of the contention set did not, they would simply bid in the ICANN Last Resort whatever they were prepared to pay in a private auction. Because Private Resolution opens up the door to creative problem solving between members of a contention set, the applicants in that contention set should be allowed to select – after contention sets are formed – to try Private Resolution. Such a selection should be unanimous and if it doesn’t lead to resolution (e.g. negotiations are attempted and fail instead of the parties using a private auction), then the ICANN Last Resort option would kick in. I hope the above is helpful and moves us a bit closer to a consensus position. Thanks. Best, Paul This message may contain information that is attorney-client privileged, attorney work product or otherwise confidential. If you are not an intended recipient, use and disclosure of this message are prohibited. If you received this transmission in error, please notify the sender by reply e-mail and delete the message and any attachments. From: Gnso-newgtld-wg <gnso-newgtld-wg-bounces@icann.org<mailto:gnso-newgtld-wg-bounces@icann.org>> On Behalf Of Justine Chew Sent: Monday, December 9, 2019 6:49 PM To: Austin, Donna <Donna.Austin@team.neustar<mailto:Donna.Austin@team.neustar>> Cc: 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 - 02 December 2019 Thank you, Donna, for picking this up. Just in relation to Goal No. 1, on reflection, I think the text "...in which the winner ultimately overpays for the TLD" should be omitted or reworded, firstly as Donna has explained, we don't know what "overpays" actually means. Secondly, even if that is the case, why should we be concerned if an applicant chooses to "overpay". Thirdly, At-Large's concerns had to do with the situation of wealthier applicants outbidding less-wealthy applicants, thereby potentially stifling competition. So, perhaps the goal should be re-stated as "Reduce the risk of unintended outcomes from “bidding wars". As for the remaining texts, I would like to be able to review the flowcharts for the 3 Alternatives before making further comments. Thanks, Justine Chew ----- On Sat, 7 Dec 2019 at 04:57, Austin, Donna via Gnso-newgtld-wg <gnso-newgtld-wg@icann.org<mailto:gnso-newgtld-wg@icann.org>> wrote: Thanks for the notes Julie, these are particularly helpful as I wasn’t able to attend the call. I have listened to the recording and I wanted to address a couple of issues that were discussed and are captured in your notes. I don’t agree that Alternative 1 addresses the following goal: 1. 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. I personally struggle with this as a goal because it’s a subjective assessment that applicants from 2012 overpaid for a TLD. Only the successful applicant can make that judgement and if the applicant willingly entered into a private or ICANN auction of last resort they didn’t do so blindly: they had an opportunity to assess the market and combined with their own personal objectives for wanting a string made a judgement about how much they were willing to pay for the string. As I noted previously, my main issue with Alternative 1 is that the sealed bid has to be provided at the time of application, which is unfair to any applicant that ultimately finds themselves in a contention set. No-one can predict how many applications will be received and how many strings will end up in a contention set so the applicant has no information available at the time of submitting their application on which to assess the value of the TLD to them. It would be eminently fairer to all applicants to submit sealed bids at a time when more information is available that would allow them to make a more informed decision about the value of the TLD to them, which is ultimately why I proposed Alternative 2 originally. Donna Donna Austin Neustar, Inc. / Senior Policy Manager, Registry Solutions Mobile: +1 310 890 9655 donna.austin@team.neustar<mailto:donna.austin@team.neustar> / Website: home.neustar<http://www.home.neustar/> Follow Neustar: LinkedIn<http://www.linkedin.com/company/5349> / Twitter<http://www.twitter.com/neustar> Reduce your environmental footprint. Print only if necessary. ________________________________ The information contained in this email message is intended only for the use of the recipient(s) named above and may contain confidential and/or privileged information. If you are not the intended recipient you have received this email message in error and any review, dissemination, distribution, or copying of this message is strictly prohibited. If you have received this communication in error, please notify us immediately and delete the original message. From: Gnso-newgtld-wg [mailto:gnso-newgtld-wg-bounces@icann.org<mailto:gnso-newgtld-wg-bounces@icann.org>] On Behalf Of Julie Hedlund Sent: Monday, December 02, 2019 8:52 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 - 02 December 2019 Dear Working Group members, Please see below the notes from the meeting on 02 December 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/2019-12-02+New+gTLD+Subsequent+Procedures+PDP<https://urldefense.proofpoint.com/v2/url?u=https-3A__community.icann.org_display_NGSPP_2019-2D12-2D02-2BNew-2BgTLD-2BSubsequent-2BProcedures-2BPDP&d=DwMGaQ&c=MOptNlVtIETeDALC_lULrw&r=CwipU91YB6EkpFXK9ynnT_QUef4yC5p7jpsDm8cU97g&m=JoTKufMJCg61DXDXCrwRY_MAaLTb_ZSrDH7Fzgwjrls&s=_51UB1f5GcK4eSMvs-LveU9QVE2_2nruA-sSl33kYfs&e=>. Kind regards, Julie Julie Hedlund, Policy Director Notes and Action Items: Actions: ACTION ITEM 1: Add a third alternative. ACTION ITEM 2: Add another goal (#7): “Increase efficiencies in application evaluation by way of understanding the contention set?” ACTION ITEM 3: Create a flow chart with a fictional string to show how alternative 1 would work. ACTION ITEM 4: Update the list of goals. Notes: 1. Review Agenda/Statements of Interest: Susan Payne was reappointed IPC Secretary for another year. 2. String Contention Mechanisms of Last Resort:https://docs.google.com/document/d/16qDoiK6vydQp6a0v9tMvU2l5fcypJY24hCzTIVTj... [docs.google.com]<https://urldefense.proofpoint.com/v2/url?u=https-3A__docs.google.com_documen...> What is the issue we are trying to address: -- The Working Group has discussed a number of potential issues with the mechanisms of last resort used in the 2012 New gTLD Round. These issues are captured in the Supplemental Initial Report. -- Although the Working Group ultimately believes that when there is string contention, an auction process should be used to select the Registry Operator invited to enter into a Registry Agreement with ICANN, the Working Group is still discussing what forms of private resolution should be allowed (if any), the specific type of auction to be used, and the timing of such an auction. Policy Goals / What the WG is Seeking to Accomplish: -- The WG is largely supportive of existing Implementation Guideline F: 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. Other goals include: 1. Reduce the risk of “bidding wars” in which the winner ultimately overpays for the TLD. * 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. b. Which could include, making it easier to implement “multipliers” for certain types of applicants, such as those eligible for Applicant Support. -- 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: -- Do we still need iii)? An alternative may be, "The ICANN Board may use expert panels to make Community Priority Evaluation determinations." This may also be dependent on recommendations on the new appeals mechanism. -- ICANN Board says it does not make policy. Its decision would be subject to RFR and IRP - very messy so it may be better to stick with what we developed earlier. -- This isn’t about the Board making policy, but making it clear that it’s an auction process rather than the Board making a decision. -- There should be a reference instead to Auction of last resort. -- Agree they are good goals so suggest removing possible description What are we Proposing? -- The Working Group is leaning towards recommending a sealed-bid auction as the ultimate form of auction used as a mechanism to resolve string contention. When a sealed-bid auction is held where bids are submitted without knowing the bid of others in the auction (e.g., prior to evaluating any of the applications) it is also called a Vickrey Auction. A sealed-bid auction can also be used as a mechanism of last resort and at the end of the process. -- With a sealed-bid auction, each applicant submits a sealed bid, stating the amount that they are willing to pay for the TLD. The ultimate “winner” pays the amount submitted by the second-highest bidder.. -- Regardless of when the sealed bid auction is held, if there are one or more Community-based Applications, that/those application(s) would need to be processed first through Community Priority Evaluation before looking at the auction bids. Alternative 1 - Vickrey Auction (No Private Resolution) -- Addresses goals 1, 2, 4, and 6. -- The principle pro here is the seemingly near elimination of private resolution. However, the principle con is the substantial complications this approach introduces (see Additional Considerations, Mostly For Alternative 1 below). Other cons are that other forms of private resolution might be impacted (e.g., joint ventures, string change, etc.) in seeking to eliminate private resolution for financial benefit and that bids are submitted with no contextual information. Alternative 2 - Sealed-Bid Auction allowing Private Resolution -- It seems to be supportive of, or at least not impede, 1, 2, and 6, but in a less pronounced manner as it relates to Alternative 1; the maker of this Alternative has acknowledged that it does not fully address concerns around potential collusion and profiteering on application withdrawals. -- However, some benefits are likely derived by obtaining sealed bids (which can reduce the incentive for all parties to agree to private resolution, if an applicant already knows they have the highest bid). The other main pro here is simplicity - most other processes remain unaffected. Discussion: -- Re: Alternative 2: First bullet point and third bullet point seem incompatible. Third bullet point: “Applicants would still have an opportunity to resolve the contention set through other means such as private auction, a joint venture arrangement or to choose another string as was suggested for ‘brands’ of the same name.” -- Assuming you stayed in only those applicants who stayed in would be revealed on reveal day. So you could still have private resolution. -- For clarity, the third bullet could be swapped with the fourth bullet and add “post reveal day”. In third bullet point, after "opportunity", you would need to insert "after reveal day" or something to clarify that parties become known. -- Question: Wasn’t one of the proposals to outlaw private auctions? So not sure why we are still allowing private resolution. Answer: If we went with alternative 1 we would eliminate private resolution, but not for alternative 2. So that is one of the drawbacks with alternative 2. -- Thought alternative 2 was to allow participants to know how many contention sets there are. Add as a third alternative: Alternative three could remove some of the elements about private resolution. -- They may not resolve privately and should only have a limited period to resolve. If not resolved in a limited period, it should proceed to the sealed bid winner. I am not seeing the time limit in alternative 2 though. Is it there? -- Question: How would the timing work with a string contention objection process? -- How could private auctions be prevented? -- Objections should not be triggered until a winner (or a private resolution winner) is identified. -- Re: Alternative 2 there should be a limited time for private resolution. -- Helpful to put these alternatives out for public comment and indicate whether the WG has a preference. -- Re: Alternative 2 -- Question: For string confusion objections those would have to be heard right away. Additional Considerations: Public Comment: Comments from the public are solicited on all applications regardless of where they are placed in the queue. To do it otherwise would mean opening up separate public comment periods depending on whether there is a need to go to the second bidder, and that would be impossible to monitor. Discussion: -- Strongly support 1 public comment period, for the exact same length of time for all. -- Impractical to have multiple public comments. String Similarity Evaluation: Discussion: -- Don’t see how this fits with the notion of closed bids and timing. You have a scenario where you have some who know who they are bidding against and everyone else doesn’t. -- In the scenario where the result of a string similarity evaluation is that some would have insight into who is in the set -- this is an unfair result. -- Which is why getting every applicant to submit a bid at the point of application is something to consider, even though it may be cumbersome for many. -- What if this fact situation should default to sealed bid only? -- Why would they not be all announced at the same time? -- So we are proposing to treat some applicants differently from others? That does not seem to be in line with the Bylaws. -- Wouldn’t alternative 1 solve this issue? -- What about plurals? -- There was only one case in 2012 that was found to be similar (unicorn/unicom). -- Why string similarity evaluation after reveal day? Why not make it before reveal day? That is a possibility. -- is string similarity not subject to accountability mechanisms and appeals? would that not “reveal” it in some manner? -- Agree with that suggestion re string similarity evaluation occurring first and before reveal day. bids would have to be in before appeal. Objections: Objections on the highest bidder’s application must be filed within the objection period. With respect to objections to the other applications, ICANN would create a system for the filing of “an intent to file an objection.” Discussion: -- Question: What happens when someone indicates that they are filing a community objection and they are filing it against all of the applicants for a string. Answer: All applicants should have a chance to respond. Add text to relay your comment on "can indicate that an objection will apply to all applications for same string"? -- Objections should not come into full proceedings unless and until there is a winner - it's a huge waste of time and money if it does proceed but private parties need to know what the value of the string may be. -- Some concern about not having to submit the objections on a standard timeline, although support not engaging fees or panels until the objection is necessary, based on bidder ordering . -- “time” may benefit some as they build their case. Or could the “intent to file” require some key points that will be included in the objection filing? -- Question: We are agreeing on the principle that the intent to object is a good idea, but when would that happen? Would one party have to state the type of objection and the grounds? Could it just be a party filing very general intent to objection concerning a risk associated with that application. Would there be a panel for an intent to object process? Answer: Proposal was that the objection would be “bare bones”. There would be no panel if it was just an intent to object to one application, but if for all applications (to the string) then one could request a panel. You file your objection against the applicant first in the queue and an intent to file against the others in the queue. Or, you could say I have the same objection to all of the applicants/string. -- Important for private parties in resolution to know that there is an intent to object (but that doesn’t pertain to alternative 1 as there is no private resolution). -- The objection should be submitted within a certain time period. -- The nature of the applicant is important. It's not just the existence of the string. It depends on who is operating it and what the purpose of the tld as stated in the application in Question 18 answers and services to be provided in answer to Question 23. There should be an intent to object process prior to determining the order of the queue with no panel convened. Other complications: Objections if there is more than one Community Application String Confusion Objection Results in the Creation of a New Contention Set or Adds to an Existing Contention Set Appeals/Accountability Mechanisms Applicant Support Program Discussion: -- Seems that these are all related to the attempt to gain efficiencies to know the order of the contention sets. If you don’t need to know the order then you could leave the program untouched. If you go back to the goals knowing the order of the contention sets goes to goals 3, 4, and 5. -- Add a goal: “Increase efficiencies in application evaluation by way of understanding the contention set?” -- Note that alternative 1 would eliminate the goal to allow contention resolution. “If there is contention for strings, applicants may: i) resolve contention between them within a pre-established timeframe” _______________________________________________ Gnso-newgtld-wg mailing list Gnso-newgtld-wg@icann.org<mailto:Gnso-newgtld-wg@icann.org> https://mm.icann.org/mailman/listinfo/gnso-newgtld-wg _______________________________________________ By submitting your personal data, you consent to the processing of your personal data for purposes of subscribing to this mailing list accordance with the ICANN Privacy Policy (https://www.icann.org/privacy/policy) and the website Terms of Service (https://www.icann.org/privacy/tos). 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Thanks for your comments Kristine. I did purposefully leave off the “paid to ICANN” part as that is a separate policy question I think. I don’t think we need to assume that the money would go to ICANN: as that did not go so well the first time, and we should consider what a “cost neutral” application process really means. If we think the process should be cost neutral to ICANN, then I think / suppose that placing the auction funds aside in a foundation of sorts would satisfy the neutrality requirement. (Although, the lie might have been put to that when ICANN replenished its reserve out of the auction funds.) If we think the process should be cost neutral to ICANN AND the applicants, then should not the money go back to the applicants in some way? Isn’t that truly cost neutral? Additionally, as a question of policy, maybe the money can be placed in some more effective foundation than one that is taking years to establish. I think these are policy choices for us. Finally, to me it seems that Vickrey is probably preferable to a highest price auction but, as I said in an earlier email, it is a complex economics issue. For example, can the Vickrey scheme be gamed in someway where there are well-off and not-well-off applicants? Or does the Vickrey scheme tend to defeat that gaming? We should tell ICANN what our policy goals are for this and ask them to figure it out in implementation, which will be reviewed by the community. Whew, sorry, Kurt
On Dec 12, 2019, at 11:56 AM, Dorrain, Kristine <dorraink@amazon.com> wrote:
I fully support Paul’s choice model and have added a few more pros and cons to the table. In the interest of equity, I even included a “pro” in the ICANN Auction of Last Resort category because I know some folks on here believe there is a hypothetical problem with “applicants being paid to lose.” The Auction of Last Resort can be effective against any perception that this might be a problem because applicants must ALL agree to any other mechanism.
I generally support Kurt’s additions, with a few questions/suggestions in red.
I’m going to be late for the call that starts shortly…
Kristine
From: Gnso-newgtld-wg <gnso-newgtld-wg-bounces@icann.org <mailto:gnso-newgtld-wg-bounces@icann.org>> On Behalf Of Kurt Pritz Sent: Thursday, December 12, 2019 11:35 AM To: McGrady, Paul D. <PMcGrady@taftlaw.com <mailto:PMcGrady@taftlaw.com>> Cc: 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 - 02 December 2019
I think the table is a great idea.
If it helps clarify the discussion, under ‘Auction Type,’ I think the options could be:
Sealed Bid - winner pays highest price bid to ICANN (why would the winner not pay the second highest price…did I miss something? I think this option is more about timing, not any other change to the Vickrey model) Sealed Bid - Vickrey (winner pays second highest price bid to ICANN) Ascending auctions (paid to ICANN) - similar to the previous round Private resolution (fully private...notably, participants could self-select a sealed bid auction as their private auction mechanism of choice)
Additionally, under ‘Auction Type’ or ‘Auction Timing' as a separate table the options would be: (I do like the idea of making this clear in the chart)
Timing - bids submitted at time of TLD application Timing - bids submitted at near time of TLD award (after evaluation, clearing of objectionsetc)
I think breaking it out this way would make the identification of strengths and weaknesses easier and clearer.
Best regards,
Kurt
On Dec 10, 2019, at 2:25 PM, McGrady, Paul D. <PMcGrady@taftlaw.com <mailto:PMcGrady@taftlaw.com>> wrote:
Hi All!
I have really enjoyed the conversation on the calls and on this list regarding auctions. It is a great reminder of how rich in talent our community is.
Below I have summarized some of the pros and cons of each process discussed (these are not meant to be exhaustive or dismissive, just my own thoughts which I encourage others to supplement). I’ve also proposed a possible way forward that could disrupt the current default status quo (ICANN Last Resort auction found in 2012 AGB, but which in my opinion is based on the false premise that ICANN “owns” all the undelegated gTLD space) but not force everyone into a one-sized-fits-all solution. I hope that the below encourages communication and helps us reach a consensus position that everyone in the WG can stand behind.
<>Auction Type Strengths Weaknesses Vickrey (place maximum bid amount at the time application is filed) · Straightforward. · Eliminates significant delays caused by contention sets. · Favors single TLD applicants. · Favors deep pockets. · Bad for .brand applicants who could end up paying significantly more · Enriches ICANN (which has never justified why it thinks it “owns” the undelegated TLD resource).
· Assumes no changes in the round/procedures/ other circumstances between filing of the application and the auction. · Assumes money is the only way to solve a contention. Modified Vickrey (place maximum bid amount at the time contention sets are formed) · Straightforward. · Eliminates much of the delay caused by contention sets · Eliminates ICANN Last Resort auctions. · Allows multiple TLD applicants to use resources more efficiently. · Favors deep pockets. · Enriches ICANN (which has never justified why it thinks it “owns” the undelegated TLD resource). · Assumes money is the only way to solve a contention. Private Resolution (could be dollar amounts, acquisitions, other consideration, etc.) · Allows for full creativity to resolve contention sets. · Doesn’t enrich ICANN (which has never justified why it thinks it “owns” the undelegated TLD resource). · The parties may agree on an auction process to resolve the contention set or they may agree instead to negotiate toward a mutually rewarding outcome. · There have been rumors of gaming in the last round. · Favors deep pockets.Amend to say: may favor deep pockets…private resolutions do not require the expenditure of ANY cash. ICANN Last Resort (status quo from 2012 AGB) None. · No applicant “gets paid to lose.” · Favors deep pockets. · Enriches ICANN (which has never justified why it thinks it “owns” the undelegated TLD resource).
A possible way forward:
Choice. Let each applicant choose how they would like to proceed. If all of the other members in the contention set make the same choice, that is the method that will be used. If, however, the members of the contention set do not agree, then ICANN Last Resort (status quo) will be default. There is no harm to the pro-Vickrey applicants in this option since whatever dollar amount they designated in their applications can, if they so choose, become their maximum dollar amount in an ICANN Last Resort if need be. Since an applicant submitting a Vickrey auction preference might be compromised in an ICANN Last Resort, the maximum dollar amount they are prepared to spend should be lodged with a third party under strict confidentiality obligations, e.g. with one of the large accounting firms.
The same is true for the pro-Modified Vickrey applicants. Whatever maximum dollar amount that they would have bid once contention sets were finalized can become their maximum bid in an ICANN Last Resort if need be.
Likewise, if an applicants selected Private Resolution and the other member(s) of the contention set did not, they would simply bid in the ICANN Last Resort whatever they were prepared to pay in a private auction.
Because Private Resolution opens up the door to creative problem solving between members of a contention set, the applicants in that contention set should be allowed to select – after contention sets are formed – to try Private Resolution. Such a selection should be unanimous and if it doesn’t lead to resolution (e.g. negotiations are attempted and fail instead of the parties using a private auction), then the ICANN Last Resort option would kick in.
I hope the above is helpful and moves us a bit closer to a consensus position. Thanks.
Best, Paul
This message may contain information that is attorney-client privileged, attorney work product or otherwise confidential. If you are not an intended recipient, use and disclosure of this message are prohibited. If you received this transmission in error, please notify the sender by reply e-mail and delete the message and any attachments. From: Gnso-newgtld-wg <gnso-newgtld-wg-bounces@icann.org <mailto:gnso-newgtld-wg-bounces@icann.org>> On Behalf Of Justine Chew Sent: Monday, December 9, 2019 6:49 PM To: Austin, Donna <Donna.Austin@team.neustar <mailto:Donna.Austin@team.neustar>> Cc: 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 - 02 December 2019
Thank you, Donna, for picking this up.
Just in relation to Goal No. 1, on reflection, I think the text "...in which the winner ultimately overpays for the TLD" should be omitted or reworded, firstly as Donna has explained, we don't know what "overpays" actually means. Secondly, even if that is the case, why should we be concerned if an applicant chooses to "overpay". Thirdly, At-Large's concerns had to do with the situation of wealthier applicants outbidding less-wealthy applicants, thereby potentially stifling competition.
So, perhaps the goal should be re-stated as "Reduce the risk of unintended outcomes from “bidding wars".
As for the remaining texts, I would like to be able to review the flowcharts for the 3 Alternatives before making further comments.
Thanks,
Justine Chew -----
On Sat, 7 Dec 2019 at 04:57, Austin, Donna via Gnso-newgtld-wg <gnso-newgtld-wg@icann.org <mailto:gnso-newgtld-wg@icann.org>> wrote: Thanks for the notes Julie, these are particularly helpful as I wasn’t able to attend the call.
I have listened to the recording and I wanted to address a couple of issues that were discussed and are captured in your notes.
I don’t agree that Alternative 1 addresses the following goal: 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.
I personally struggle with this as a goal because it’s a subjective assessment that applicants from 2012 overpaid for a TLD. Only the successful applicant can make that judgement and if the applicant willingly entered into a private or ICANN auction of last resort they didn’t do so blindly: they had an opportunity to assess the market and combined with their own personal objectives for wanting a string made a judgement about how much they were willing to pay for the string.
As I noted previously, my main issue with Alternative 1 is that the sealed bid has to be provided at the time of application, which is unfair to any applicant that ultimately finds themselves in a contention set. No-one can predict how many applications will be received and how many strings will end up in a contention set so the applicant has no information available at the time of submitting their application on which to assess the value of the TLD to them.
It would be eminently fairer to all applicants to submit sealed bids at a time when more information is available that would allow them to make a more informed decision about the value of the TLD to them, which is ultimately why I proposed Alternative 2 originally.
Donna Donna Austin Neustar, Inc. / Senior Policy Manager, Registry Solutions Mobile: +1 310 890 9655 donna.austin@team.neustar <mailto:donna.austin@team.neustar> / Website: home.neustar <http://www.home.neustar/>
Follow Neustar: LinkedIn <http://www.linkedin.com/company/5349> / Twitter <http://www.twitter.com/neustar> Reduce your environmental footprint. Print only if necessary. The information contained in this email message is intended only for the use of the recipient(s) named above and may contain confidential and/or privileged information. If you are not the intended recipient you have received this email message in error and any review, dissemination, distribution, or copying of this message is strictly prohibited. If you have received this communication in error, please notify us immediately and delete the original message.
From: Gnso-newgtld-wg [mailto:gnso-newgtld-wg-bounces@icann.org <mailto:gnso-newgtld-wg-bounces@icann.org>] On Behalf Of Julie Hedlund Sent: Monday, December 02, 2019 8:52 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 - 02 December 2019
Dear Working Group members,
Please see below the notes from the meeting on 02 December 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/2019-12-02+New+gTLD+Subsequent+Pro... <https://urldefense.proofpoint.com/v2/url?u=https-3A__community.icann.org_dis...>.
Kind regards, Julie Julie Hedlund, Policy Director
Notes and Action Items:
Actions:
ACTION ITEM 1: Add a third alternative. ACTION ITEM 2: Add another goal (#7): “Increase efficiencies in application evaluation by way of understanding the contention set?” ACTION ITEM 3: Create a flow chart with a fictional string to show how alternative 1 would work. ACTION ITEM 4: Update the list of goals.
Notes:
1. Review Agenda/Statements of Interest: Susan Payne was reappointed IPC Secretary for another year.
2. String Contention Mechanisms of Last Resort:https://docs.google.com/document/d/16qDoiK6vydQp6a0v9tMvU2l5fcypJY24hCzTIVTj... [docs.google.com] <https://urldefense.proofpoint.com/v2/url?u=https-3A__docs.google.com_documen...>
What is the issue we are trying to address: -- The Working Group has discussed a number of potential issues with the mechanisms of last resort used in the 2012 New gTLD Round. These issues are captured in the Supplemental Initial Report. -- Although the Working Group ultimately believes that when there is string contention, an auction process should be used to select the Registry Operator invited to enter into a Registry Agreement with ICANN, the Working Group is still discussing what forms of private resolution should be allowed (if any), the specific type of auction to be used, and the timing of such an auction.
Policy Goals / What the WG is Seeking to Accomplish: -- The WG is largely supportive of existing Implementation Guideline F: 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.
Other goals include: Reduce the risk of “bidding wars” in which the winner ultimately overpays for the TLD. Tentative, related goal for discussion: encourage applicants to bid their true value for a TLD. 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). Increase transparency. Resolve contention more quickly. Increase predictability. Encourage new entrants into the field. b. Which could include, making it easier to implement “multipliers” for certain types of applicants, such as those eligible for Applicant Support.
-- 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: -- Do we still need iii)? An alternative may be, "The ICANN Board may use expert panels to make Community Priority Evaluation determinations." This may also be dependent on recommendations on the new appeals mechanism. -- ICANN Board says it does not make policy. Its decision would be subject to RFR and IRP - very messy so it may be better to stick with what we developed earlier. -- This isn’t about the Board making policy, but making it clear that it’s an auction process rather than the Board making a decision. -- There should be a reference instead to Auction of last resort. -- Agree they are good goals so suggest removing possible description What are we Proposing? -- The Working Group is leaning towards recommending a sealed-bid auction as the ultimate form of auction used as a mechanism to resolve string contention. When a sealed-bid auction is held where bids are submitted without knowing the bid of others in the auction (e.g., prior to evaluating any of the applications) it is also called a Vickrey Auction. A sealed-bid auction can also be used as a mechanism of last resort and at the end of the process. -- With a sealed-bid auction, each applicant submits a sealed bid, stating the amount that they are willing to pay for the TLD. The ultimate “winner” pays the amount submitted by the second-highest bidder.. -- Regardless of when the sealed bid auction is held, if there are one or more Community-based Applications, that/those application(s) would need to be processed first through Community Priority Evaluation before looking at the auction bids.
Alternative 1 - Vickrey Auction (No Private Resolution)
-- Addresses goals 1, 2, 4, and 6. -- The principle pro here is the seemingly near elimination of private resolution. However, the principle con is the substantial complications this approach introduces (see Additional Considerations, Mostly For Alternative 1 below). Other cons are that other forms of private resolution might be impacted (e.g., joint ventures, string change, etc.) in seeking to eliminate private resolution for financial benefit and that bids are submitted with no contextual information.
Alternative 2 - Sealed-Bid Auction allowing Private Resolution
-- It seems to be supportive of, or at least not impede, 1, 2, and 6, but in a less pronounced manner as it relates to Alternative 1; the maker of this Alternative has acknowledged that it does not fully address concerns around potential collusion and profiteering on application withdrawals. -- However, some benefits are likely derived by obtaining sealed bids (which can reduce the incentive for all parties to agree to private resolution, if an applicant already knows they have the highest bid). The other main pro here is simplicity - most other processes remain unaffected.
Discussion: -- Re: Alternative 2: First bullet point and third bullet point seem incompatible. Third bullet point: “Applicants would still have an opportunity to resolve the contention set through other means such as private auction, a joint venture arrangement or to choose another string as was suggested for ‘brands’ of the same name.” -- Assuming you stayed in only those applicants who stayed in would be revealed on reveal day. So you could still have private resolution. -- For clarity, the third bullet could be swapped with the fourth bullet and add “post reveal day”. In third bullet point, after "opportunity", you would need to insert "after reveal day" or something to clarify that parties become known. -- Question: Wasn’t one of the proposals to outlaw private auctions? So not sure why we are still allowing private resolution. Answer: If we went with alternative 1 we would eliminate private resolution, but not for alternative 2. So that is one of the drawbacks with alternative 2. -- Thought alternative 2 was to allow participants to know how many contention sets there are. Add as a third alternative: Alternative three could remove some of the elements about private resolution. -- They may not resolve privately and should only have a limited period to resolve. If not resolved in a limited period, it should proceed to the sealed bid winner. I am not seeing the time limit in alternative 2 though. Is it there? -- Question: How would the timing work with a string contention objection process? -- How could private auctions be prevented? -- Objections should not be triggered until a winner (or a private resolution winner) is identified. -- Re: Alternative 2 there should be a limited time for private resolution. -- Helpful to put these alternatives out for public comment and indicate whether the WG has a preference. -- Re: Alternative 2 -- Question: For string confusion objections those would have to be heard right away.
Additional Considerations:
Public Comment: Comments from the public are solicited on all applications regardless of where they are placed in the queue. To do it otherwise would mean opening up separate public comment periods depending on whether there is a need to go to the second bidder, and that would be impossible to monitor.
Discussion: -- Strongly support 1 public comment period, for the exact same length of time for all. -- Impractical to have multiple public comments.
String Similarity Evaluation:
Discussion: -- Don’t see how this fits with the notion of closed bids and timing. You have a scenario where you have some who know who they are bidding against and everyone else doesn’t. -- In the scenario where the result of a string similarity evaluation is that some would have insight into who is in the set -- this is an unfair result. -- Which is why getting every applicant to submit a bid at the point of application is something to consider, even though it may be cumbersome for many. -- What if this fact situation should default to sealed bid only? -- Why would they not be all announced at the same time? -- So we are proposing to treat some applicants differently from others? That does not seem to be in line with the Bylaws. -- Wouldn’t alternative 1 solve this issue? -- What about plurals? -- There was only one case in 2012 that was found to be similar (unicorn/unicom). -- Why string similarity evaluation after reveal day? Why not make it before reveal day? That is a possibility. -- is string similarity not subject to accountability mechanisms and appeals? > would that not “reveal” it in some manner? -- Agree with that suggestion re string similarity evaluation occurring first and before reveal day. bids would have to be in before appeal.
Objections: Objections on the highest bidder’s application must be filed within the objection period. With respect to objections to the other applications, ICANN would create a system for the filing of “an intent to file an objection.”
Discussion: -- Question: What happens when someone indicates that they are filing a community objection and they are filing it against all of the applicants for a string. Answer: All applicants should have a chance to respond. Add text to relay your comment on "can indicate that an objection will apply to all applications for same string"? > -- Objections should not come into full proceedings unless and until there is a winner - it's a huge waste of time and money if it does proceed but private parties need to know what the value of the string may be. -- Some concern about not having to submit the objections on a standard timeline, although support not engaging fees or panels until the objection is necessary, based on bidder ordering > . -- “time” may benefit some as they build their case. Or could the “intent to file” require some key points that will be included in the objection filing? -- Question: We are agreeing on the principle that the intent to object is a good idea, but when would that happen? Would one party have to state the type of objection and the grounds? Could it just be a party filing very general intent to objection concerning a risk associated with that application. Would there be a panel for an intent to object process? Answer: Proposal was that the objection would be “bare bones”. There would be no panel if it was just an intent to object to one application, but if for all applications (to the string) then one could request a panel. You file your objection against the applicant first in the queue and an intent to file against the others in the queue. Or, you could say I have the same objection to all of the applicants/string. -- Important for private parties in resolution to know that there is an intent to object (but that doesn’t pertain to alternative 1 as there is no private resolution). -- The objection should be submitted within a certain time period. -- The nature of the applicant is important. It's not just the existence of the string. It depends on who is operating it and what the purpose of the tld as stated in the application in Question 18 answers and services to be provided in answer to Question 23. There should be an intent to object process prior to determining the order of the queue with no panel convened.
Other complications: Objections if there is more than one Community Application String Confusion Objection Results in the Creation of a New Contention Set or Adds to an Existing Contention Set Appeals/Accountability Mechanisms Applicant Support Program
Discussion: -- Seems that these are all related to the attempt to gain efficiencies to know the order of the contention sets. If you don’t need to know the order then you could leave the program untouched. If you go back to the goals knowing the order of the contention sets goes to goals 3, 4, and 5. -- Add a goal: “Increase efficiencies in application evaluation by way of understanding the contention set?” -- Note that alternative 1 would eliminate the goal to allow contention resolution. “If there is contention for strings, applicants may: i) resolve contention between them within a pre-established timeframe”
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Fair points. I also prefer a model where ICANN is not enriched and the process *is* cost neutral. Therefore, I support having this conversation at a policy level. Regarding the preferability of Vickrey, I think there will be a range of outcomes regardless of what scheme is used, which is why I like the idea of choice. Applicants can select for themselves what model fits their situation. To answer your question below, even with Vickrey, the most well-off applicants can simply bid an outrageous amount, so Vickrey does favor deep pockets, as Paul pointed out in the table. The only option currently on the list that provides ANY hope for a resolution that doesn’t necessarily cost a pile of money is private resolution. Kristine From: Kurt Pritz <kurt@kjpritz.com> Sent: Thursday, December 12, 2019 12:11 PM To: Dorrain, Kristine <dorraink@amazon.com> Cc: McGrady, Paul D. <PMcGrady@taftlaw.com>; gnso-newgtld-wg@icann.org Subject: Re: [Gnso-newgtld-wg] Notes and Action Items - New gTLD Subsequent Procedures PDP WG - 02 December 2019 Thanks for your comments Kristine. I did purposefully leave off the “paid to ICANN” part as that is a separate policy question I think. I don’t think we need to assume that the money would go to ICANN: * as that did not go so well the first time, and * we should consider what a “cost neutral” application process really means. If we think the process should be cost neutral to ICANN, then I think / suppose that placing the auction funds aside in a foundation of sorts would satisfy the neutrality requirement. (Although, the lie might have been put to that when ICANN replenished its reserve out of the auction funds.) If we think the process should be cost neutral to ICANN AND the applicants, then should not the money go back to the applicants in some way? Isn’t that truly cost neutral? Additionally, as a question of policy, maybe the money can be placed in some more effective foundation than one that is taking years to establish. I think these are policy choices for us. Finally, to me it seems that Vickrey is probably preferable to a highest price auction but, as I said in an earlier email, it is a complex economics issue. For example, can the Vickrey scheme be gamed in someway where there are well-off and not-well-off applicants? Or does the Vickrey scheme tend to defeat that gaming? We should tell ICANN what our policy goals are for this and ask them to figure it out in implementation, which will be reviewed by the community. Whew, sorry, Kurt On Dec 12, 2019, at 11:56 AM, Dorrain, Kristine <dorraink@amazon.com<mailto:dorraink@amazon.com>> wrote: I fully support Paul’s choice model and have added a few more pros and cons to the table. In the interest of equity, I even included a “pro” in the ICANN Auction of Last Resort category because I know some folks on here believe there is a hypothetical problem with “applicants being paid to lose.” The Auction of Last Resort can be effective against any perception that this might be a problem because applicants must ALL agree to any other mechanism. I generally support Kurt’s additions, with a few questions/suggestions in red. I’m going to be late for the call that starts shortly… Kristine From: Gnso-newgtld-wg <gnso-newgtld-wg-bounces@icann.org<mailto:gnso-newgtld-wg-bounces@icann.org>> On Behalf Of Kurt Pritz Sent: Thursday, December 12, 2019 11:35 AM To: McGrady, Paul D. <PMcGrady@taftlaw.com<mailto:PMcGrady@taftlaw.com>> Cc: 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 - 02 December 2019 I think the table is a great idea. If it helps clarify the discussion, under ‘Auction Type,’ I think the options could be: Sealed Bid - winner pays highest price bid to ICANN (why would the winner not pay the second highest price…did I miss something? I think this option is more about timing, not any other change to the Vickrey model) Sealed Bid - Vickrey (winner pays second highest price bid to ICANN) Ascending auctions (paid to ICANN) - similar to the previous round Private resolution (fully private...notably, participants could self-select a sealed bid auction as their private auction mechanism of choice) Additionally, under ‘Auction Type’ or ‘Auction Timing' as a separate table the options would be: (I do like the idea of making this clear in the chart) Timing - bids submitted at time of TLD application Timing - bids submitted at near time of TLD award (after evaluation, clearing of objectionsetc) I think breaking it out this way would make the identification of strengths and weaknesses easier and clearer. Best regards, Kurt On Dec 10, 2019, at 2:25 PM, McGrady, Paul D. <PMcGrady@taftlaw.com<mailto:PMcGrady@taftlaw.com>> wrote: Hi All! I have really enjoyed the conversation on the calls and on this list regarding auctions. It is a great reminder of how rich in talent our community is. Below I have summarized some of the pros and cons of each process discussed (these are not meant to be exhaustive or dismissive, just my own thoughts which I encourage others to supplement). I’ve also proposed a possible way forward that could disrupt the current default status quo (ICANN Last Resort auction found in 2012 AGB, but which in my opinion is based on the false premise that ICANN “owns” all the undelegated gTLD space) but not force everyone into a one-sized-fits-all solution. I hope that the below encourages communication and helps us reach a consensus position that everyone in the WG can stand behind. Auction Type Strengths Weaknesses Vickrey (place maximum bid amount at the time application is filed) • Straightforward. • Eliminates significant delays caused by contention sets. • Favors single TLD applicants. • Favors deep pockets. • Bad for .brand applicants who could end up paying significantly more • Enriches ICANN (which has never justified why it thinks it “owns” the undelegated TLD resource). • Assumes no changes in the round/procedures/ other circumstances between filing of the application and the auction. • Assumes money is the only way to solve a contention. Modified Vickrey (place maximum bid amount at the time contention sets are formed) • Straightforward. • Eliminates much of the delay caused by contention sets • Eliminates ICANN Last Resort auctions. • Allows multiple TLD applicants to use resources more efficiently. • Favors deep pockets. • Enriches ICANN (which has never justified why it thinks it “owns” the undelegated TLD resource). • Assumes money is the only way to solve a contention. Private Resolution (could be dollar amounts, acquisitions, other consideration, etc.) • Allows for full creativity to resolve contention sets. • Doesn’t enrich ICANN (which has never justified why it thinks it “owns” the undelegated TLD resource). • The parties may agree on an auction process to resolve the contention set or they may agree instead to negotiate toward a mutually rewarding outcome. • There have been rumors of gaming in the last round. • Favors deep pockets.Amend to say: may favor deep pockets…private resolutions do not require the expenditure of ANY cash. ICANN Last Resort (status quo from 2012 AGB) None. • No applicant “gets paid to lose.” • Favors deep pockets. • Enriches ICANN (which has never justified why it thinks it “owns” the undelegated TLD resource). A possible way forward: Choice. Let each applicant choose how they would like to proceed. If all of the other members in the contention set make the same choice, that is the method that will be used. If, however, the members of the contention set do not agree, then ICANN Last Resort (status quo) will be default. There is no harm to the pro-Vickrey applicants in this option since whatever dollar amount they designated in their applications can, if they so choose, become their maximum dollar amount in an ICANN Last Resort if need be. Since an applicant submitting a Vickrey auction preference might be compromised in an ICANN Last Resort, the maximum dollar amount they are prepared to spend should be lodged with a third party under strict confidentiality obligations, e.g. with one of the large accounting firms. The same is true for the pro-Modified Vickrey applicants. Whatever maximum dollar amount that they would have bid once contention sets were finalized can become their maximum bid in an ICANN Last Resort if need be. Likewise, if an applicants selected Private Resolution and the other member(s) of the contention set did not, they would simply bid in the ICANN Last Resort whatever they were prepared to pay in a private auction. Because Private Resolution opens up the door to creative problem solving between members of a contention set, the applicants in that contention set should be allowed to select – after contention sets are formed – to try Private Resolution. Such a selection should be unanimous and if it doesn’t lead to resolution (e.g. negotiations are attempted and fail instead of the parties using a private auction), then the ICANN Last Resort option would kick in. I hope the above is helpful and moves us a bit closer to a consensus position. Thanks. Best, Paul This message may contain information that is attorney-client privileged, attorney work product or otherwise confidential. If you are not an intended recipient, use and disclosure of this message are prohibited. If you received this transmission in error, please notify the sender by reply e-mail and delete the message and any attachments. From: Gnso-newgtld-wg <gnso-newgtld-wg-bounces@icann.org<mailto:gnso-newgtld-wg-bounces@icann.org>> On Behalf Of Justine Chew Sent: Monday, December 9, 2019 6:49 PM To: Austin, Donna <Donna.Austin@team.neustar<mailto:Donna.Austin@team.neustar>> Cc: 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 - 02 December 2019 Thank you, Donna, for picking this up. Just in relation to Goal No. 1, on reflection, I think the text "...in which the winner ultimately overpays for the TLD" should be omitted or reworded, firstly as Donna has explained, we don't know what "overpays" actually means. Secondly, even if that is the case, why should we be concerned if an applicant chooses to "overpay". Thirdly, At-Large's concerns had to do with the situation of wealthier applicants outbidding less-wealthy applicants, thereby potentially stifling competition. So, perhaps the goal should be re-stated as "Reduce the risk of unintended outcomes from “bidding wars". As for the remaining texts, I would like to be able to review the flowcharts for the 3 Alternatives before making further comments. Thanks, Justine Chew ----- On Sat, 7 Dec 2019 at 04:57, Austin, Donna via Gnso-newgtld-wg <gnso-newgtld-wg@icann.org<mailto:gnso-newgtld-wg@icann.org>> wrote: Thanks for the notes Julie, these are particularly helpful as I wasn’t able to attend the call. I have listened to the recording and I wanted to address a couple of issues that were discussed and are captured in your notes. I don’t agree that Alternative 1 addresses the following goal: 1. 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. I personally struggle with this as a goal because it’s a subjective assessment that applicants from 2012 overpaid for a TLD. Only the successful applicant can make that judgement and if the applicant willingly entered into a private or ICANN auction of last resort they didn’t do so blindly: they had an opportunity to assess the market and combined with their own personal objectives for wanting a string made a judgement about how much they were willing to pay for the string. As I noted previously, my main issue with Alternative 1 is that the sealed bid has to be provided at the time of application, which is unfair to any applicant that ultimately finds themselves in a contention set. No-one can predict how many applications will be received and how many strings will end up in a contention set so the applicant has no information available at the time of submitting their application on which to assess the value of the TLD to them. It would be eminently fairer to all applicants to submit sealed bids at a time when more information is available that would allow them to make a more informed decision about the value of the TLD to them, which is ultimately why I proposed Alternative 2 originally. Donna Donna Austin Neustar, Inc. / Senior Policy Manager, Registry Solutions Mobile: +1 310 890 9655 donna.austin@team.neustar<mailto:donna.austin@team.neustar> / Website: home.neustar<http://www.home.neustar/> Follow Neustar: LinkedIn<http://www.linkedin.com/company/5349> / Twitter<http://www.twitter.com/neustar> Reduce your environmental footprint. Print only if necessary. ________________________________ The information contained in this email message is intended only for the use of the recipient(s) named above and may contain confidential and/or privileged information. If you are not the intended recipient you have received this email message in error and any review, dissemination, distribution, or copying of this message is strictly prohibited. If you have received this communication in error, please notify us immediately and delete the original message. From: Gnso-newgtld-wg [mailto:gnso-newgtld-wg-bounces@icann.org<mailto:gnso-newgtld-wg-bounces@icann.org>] On Behalf Of Julie Hedlund Sent: Monday, December 02, 2019 8:52 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 - 02 December 2019 Dear Working Group members, Please see below the notes from the meeting on 02 December 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/2019-12-02+New+gTLD+Subsequent+Procedures+PDP<https://urldefense.proofpoint.com/v2/url?u=https-3A__community.icann.org_display_NGSPP_2019-2D12-2D02-2BNew-2BgTLD-2BSubsequent-2BProcedures-2BPDP&d=DwMGaQ&c=MOptNlVtIETeDALC_lULrw&r=CwipU91YB6EkpFXK9ynnT_QUef4yC5p7jpsDm8cU97g&m=JoTKufMJCg61DXDXCrwRY_MAaLTb_ZSrDH7Fzgwjrls&s=_51UB1f5GcK4eSMvs-LveU9QVE2_2nruA-sSl33kYfs&e=>. Kind regards, Julie Julie Hedlund, Policy Director Notes and Action Items: Actions: ACTION ITEM 1: Add a third alternative. ACTION ITEM 2: Add another goal (#7): “Increase efficiencies in application evaluation by way of understanding the contention set?” ACTION ITEM 3: Create a flow chart with a fictional string to show how alternative 1 would work. ACTION ITEM 4: Update the list of goals. Notes: 1. Review Agenda/Statements of Interest: Susan Payne was reappointed IPC Secretary for another year. 2. String Contention Mechanisms of Last Resort:https://docs.google.com/document/d/16qDoiK6vydQp6a0v9tMvU2l5fcypJY24hCzTIVTj... [docs.google.com]<https://urldefense.proofpoint.com/v2/url?u=https-3A__docs.google.com_documen...> What is the issue we are trying to address: -- The Working Group has discussed a number of potential issues with the mechanisms of last resort used in the 2012 New gTLD Round. These issues are captured in the Supplemental Initial Report. -- Although the Working Group ultimately believes that when there is string contention, an auction process should be used to select the Registry Operator invited to enter into a Registry Agreement with ICANN, the Working Group is still discussing what forms of private resolution should be allowed (if any), the specific type of auction to be used, and the timing of such an auction. Policy Goals / What the WG is Seeking to Accomplish: -- The WG is largely supportive of existing Implementation Guideline F: 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. Other goals include: 1. Reduce the risk of “bidding wars” in which the winner ultimately overpays for the TLD. * 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. b. Which could include, making it easier to implement “multipliers” for certain types of applicants, such as those eligible for Applicant Support. -- 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: -- Do we still need iii)? An alternative may be, "The ICANN Board may use expert panels to make Community Priority Evaluation determinations." This may also be dependent on recommendations on the new appeals mechanism. -- ICANN Board says it does not make policy. Its decision would be subject to RFR and IRP - very messy so it may be better to stick with what we developed earlier. -- This isn’t about the Board making policy, but making it clear that it’s an auction process rather than the Board making a decision. -- There should be a reference instead to Auction of last resort. -- Agree they are good goals so suggest removing possible description What are we Proposing? -- The Working Group is leaning towards recommending a sealed-bid auction as the ultimate form of auction used as a mechanism to resolve string contention. When a sealed-bid auction is held where bids are submitted without knowing the bid of others in the auction (e.g., prior to evaluating any of the applications) it is also called a Vickrey Auction. A sealed-bid auction can also be used as a mechanism of last resort and at the end of the process. -- With a sealed-bid auction, each applicant submits a sealed bid, stating the amount that they are willing to pay for the TLD. The ultimate “winner” pays the amount submitted by the second-highest bidder.. -- Regardless of when the sealed bid auction is held, if there are one or more Community-based Applications, that/those application(s) would need to be processed first through Community Priority Evaluation before looking at the auction bids. Alternative 1 - Vickrey Auction (No Private Resolution) -- Addresses goals 1, 2, 4, and 6. -- The principle pro here is the seemingly near elimination of private resolution. However, the principle con is the substantial complications this approach introduces (see Additional Considerations, Mostly For Alternative 1 below). Other cons are that other forms of private resolution might be impacted (e.g., joint ventures, string change, etc.) in seeking to eliminate private resolution for financial benefit and that bids are submitted with no contextual information. Alternative 2 - Sealed-Bid Auction allowing Private Resolution -- It seems to be supportive of, or at least not impede, 1, 2, and 6, but in a less pronounced manner as it relates to Alternative 1; the maker of this Alternative has acknowledged that it does not fully address concerns around potential collusion and profiteering on application withdrawals. -- However, some benefits are likely derived by obtaining sealed bids (which can reduce the incentive for all parties to agree to private resolution, if an applicant already knows they have the highest bid). The other main pro here is simplicity - most other processes remain unaffected. Discussion: -- Re: Alternative 2: First bullet point and third bullet point seem incompatible. Third bullet point: “Applicants would still have an opportunity to resolve the contention set through other means such as private auction, a joint venture arrangement or to choose another string as was suggested for ‘brands’ of the same name.” -- Assuming you stayed in only those applicants who stayed in would be revealed on reveal day. So you could still have private resolution. -- For clarity, the third bullet could be swapped with the fourth bullet and add “post reveal day”. In third bullet point, after "opportunity", you would need to insert "after reveal day" or something to clarify that parties become known. -- Question: Wasn’t one of the proposals to outlaw private auctions? So not sure why we are still allowing private resolution. Answer: If we went with alternative 1 we would eliminate private resolution, but not for alternative 2. So that is one of the drawbacks with alternative 2. -- Thought alternative 2 was to allow participants to know how many contention sets there are. Add as a third alternative: Alternative three could remove some of the elements about private resolution. -- They may not resolve privately and should only have a limited period to resolve. If not resolved in a limited period, it should proceed to the sealed bid winner. I am not seeing the time limit in alternative 2 though. Is it there? -- Question: How would the timing work with a string contention objection process? -- How could private auctions be prevented? -- Objections should not be triggered until a winner (or a private resolution winner) is identified. -- Re: Alternative 2 there should be a limited time for private resolution. -- Helpful to put these alternatives out for public comment and indicate whether the WG has a preference. -- Re: Alternative 2 -- Question: For string confusion objections those would have to be heard right away. Additional Considerations: Public Comment: Comments from the public are solicited on all applications regardless of where they are placed in the queue. To do it otherwise would mean opening up separate public comment periods depending on whether there is a need to go to the second bidder, and that would be impossible to monitor. Discussion: -- Strongly support 1 public comment period, for the exact same length of time for all. -- Impractical to have multiple public comments. String Similarity Evaluation: Discussion: -- Don’t see how this fits with the notion of closed bids and timing. You have a scenario where you have some who know who they are bidding against and everyone else doesn’t. -- In the scenario where the result of a string similarity evaluation is that some would have insight into who is in the set -- this is an unfair result. -- Which is why getting every applicant to submit a bid at the point of application is something to consider, even though it may be cumbersome for many. -- What if this fact situation should default to sealed bid only? -- Why would they not be all announced at the same time? -- So we are proposing to treat some applicants differently from others? That does not seem to be in line with the Bylaws. -- Wouldn’t alternative 1 solve this issue? -- What about plurals? -- There was only one case in 2012 that was found to be similar (unicorn/unicom). -- Why string similarity evaluation after reveal day? Why not make it before reveal day? That is a possibility. -- is string similarity not subject to accountability mechanisms and appeals? would that not “reveal” it in some manner? -- Agree with that suggestion re string similarity evaluation occurring first and before reveal day. bids would have to be in before appeal. Objections: Objections on the highest bidder’s application must be filed within the objection period. With respect to objections to the other applications, ICANN would create a system for the filing of “an intent to file an objection.” Discussion: -- Question: What happens when someone indicates that they are filing a community objection and they are filing it against all of the applicants for a string. Answer: All applicants should have a chance to respond. Add text to relay your comment on "can indicate that an objection will apply to all applications for same string"? -- Objections should not come into full proceedings unless and until there is a winner - it's a huge waste of time and money if it does proceed but private parties need to know what the value of the string may be. -- Some concern about not having to submit the objections on a standard timeline, although support not engaging fees or panels until the objection is necessary, based on bidder ordering . -- “time” may benefit some as they build their case. Or could the “intent to file” require some key points that will be included in the objection filing? -- Question: We are agreeing on the principle that the intent to object is a good idea, but when would that happen? Would one party have to state the type of objection and the grounds? Could it just be a party filing very general intent to objection concerning a risk associated with that application. Would there be a panel for an intent to object process? Answer: Proposal was that the objection would be “bare bones”. There would be no panel if it was just an intent to object to one application, but if for all applications (to the string) then one could request a panel. You file your objection against the applicant first in the queue and an intent to file against the others in the queue. Or, you could say I have the same objection to all of the applicants/string. -- Important for private parties in resolution to know that there is an intent to object (but that doesn’t pertain to alternative 1 as there is no private resolution). -- The objection should be submitted within a certain time period. -- The nature of the applicant is important. It's not just the existence of the string. It depends on who is operating it and what the purpose of the tld as stated in the application in Question 18 answers and services to be provided in answer to Question 23. There should be an intent to object process prior to determining the order of the queue with no panel convened. Other complications: Objections if there is more than one Community Application String Confusion Objection Results in the Creation of a New Contention Set or Adds to an Existing Contention Set Appeals/Accountability Mechanisms Applicant Support Program Discussion: -- Seems that these are all related to the attempt to gain efficiencies to know the order of the contention sets. If you don’t need to know the order then you could leave the program untouched. If you go back to the goals knowing the order of the contention sets goes to goals 3, 4, and 5. -- Add a goal: “Increase efficiencies in application evaluation by way of understanding the contention set?” -- Note that alternative 1 would eliminate the goal to allow contention resolution. “If there is contention for strings, applicants may: i) resolve contention between them within a pre-established timeframe” _______________________________________________ Gnso-newgtld-wg mailing list Gnso-newgtld-wg@icann.org<mailto:Gnso-newgtld-wg@icann.org> https://mm.icann.org/mailman/listinfo/gnso-newgtld-wg _______________________________________________ By submitting your personal data, you consent to the processing of your personal data for purposes of subscribing to this mailing list accordance with the ICANN Privacy Policy (https://www.icann.org/privacy/policy) and the website Terms of Service (https://www.icann.org/privacy/tos). You can visit the Mailman link above to change your membership status or configuration, including unsubscribing, setting digest-style delivery or disabling delivery altogether (e.g., for a vacation), and so on. _______________________________________________ Gnso-newgtld-wg mailing list Gnso-newgtld-wg@icann.org<mailto:Gnso-newgtld-wg@icann.org> https://mm.icann.org/mailman/listinfo/gnso-newgtld-wg _______________________________________________ By submitting your personal data, you consent to the processing of your personal data for purposes of subscribing to this mailing list accordance with the ICANN Privacy Policy (https://www.icann.org/privacy/policy) and the website Terms of Service (https://www.icann.org/privacy/tos). You can visit the Mailman link above to change your membership status or configuration, including unsubscribing, setting digest-style delivery or disabling delivery altogether (e.g., for a vacation), and so on.
Apologies all, I am behind on responding to emails and listening to the recordings for calls that I’ve had to miss due to too many conflicts. I agree with Donna’s notes below. I think that “overpayment” is subjective and therefore avoiding it will be a moving target – making it a poor goal. Similarly, the “true value”of a TLD is what an applicant is willing to pay and is not easily determined in a vacuum. Alternative 1 is not acceptable because it: 1. Assumes the value of a TLD is stable over the application period and that the application period will not introduce any new hurdles or unexpected curveballs. 2. Assumes that money is only outcome sought by parties to a private resolution Alternative 2 may be an acceptable form of private resolution, if both/all parties in a contention set agree to this, but it should not be the only required form of private resolution. Additionally, perhaps a sealed bid auction could be an option for an ICANN auction as well, if the parties agree. Sincerely, Kristine Dorrain Kristine Dorrain| Amazon Senior Corporate Counsel 2021 7th Avenue Seattle, WA 98121 tel: 206-740-9339 dorraink@amazon.com<mailto:dorraink@amazon.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: Friday, December 6, 2019 12:57 PM 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 - 02 December 2019 Thanks for the notes Julie, these are particularly helpful as I wasn’t able to attend the call. I have listened to the recording and I wanted to address a couple of issues that were discussed and are captured in your notes. I don’t agree that Alternative 1 addresses the following goal: 1. 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. I personally struggle with this as a goal because it’s a subjective assessment that applicants from 2012 overpaid for a TLD. Only the successful applicant can make that judgement and if the applicant willingly entered into a private or ICANN auction of last resort they didn’t do so blindly: they had an opportunity to assess the market and combined with their own personal objectives for wanting a string made a judgement about how much they were willing to pay for the string. As I noted previously, my main issue with Alternative 1 is that the sealed bid has to be provided at the time of application, which is unfair to any applicant that ultimately finds themselves in a contention set. No-one can predict how many applications will be received and how many strings will end up in a contention set so the applicant has no information available at the time of submitting their application on which to assess the value of the TLD to them. It would be eminently fairer to all applicants to submit sealed bids at a time when more information is available that would allow them to make a more informed decision about the value of the TLD to them, which is ultimately why I proposed Alternative 2 originally. Donna Donna Austin Neustar, Inc. / Senior Policy Manager, Registry Solutions Mobile: +1 310 890 9655 donna.austin@team.neustar<mailto:donna.austin@team.neustar> / Website: home.neustar<http://www.home.neustar/> Follow Neustar: LinkedIn<http://www.linkedin.com/company/5349> / Twitter<http://www.twitter.com/neustar> Reduce your environmental footprint. Print only if necessary. ________________________________ The information contained in this email message is intended only for the use of the recipient(s) named above and may contain confidential and/or privileged information. If you are not the intended recipient you have received this email message in error and any review, dissemination, distribution, or copying of this message is strictly prohibited. If you have received this communication in error, please notify us immediately and delete the original message. From: Gnso-newgtld-wg [mailto:gnso-newgtld-wg-bounces@icann.org] On Behalf Of Julie Hedlund Sent: Monday, December 02, 2019 8:52 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 - 02 December 2019 Dear Working Group members, Please see below the notes from the meeting on 02 December 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/2019-12-02+New+gTLD+Subsequent+Procedures+PDP<https://urldefense.proofpoint.com/v2/url?u=https-3A__community.icann.org_display_NGSPP_2019-2D12-2D02-2BNew-2BgTLD-2BSubsequent-2BProcedures-2BPDP&d=DwMGaQ&c=MOptNlVtIETeDALC_lULrw&r=CwipU91YB6EkpFXK9ynnT_QUef4yC5p7jpsDm8cU97g&m=JoTKufMJCg61DXDXCrwRY_MAaLTb_ZSrDH7Fzgwjrls&s=_51UB1f5GcK4eSMvs-LveU9QVE2_2nruA-sSl33kYfs&e=>. Kind regards, Julie Julie Hedlund, Policy Director Notes and Action Items: Actions: ACTION ITEM 1: Add a third alternative. ACTION ITEM 2: Add another goal (#7): “Increase efficiencies in application evaluation by way of understanding the contention set?” ACTION ITEM 3: Create a flow chart with a fictional string to show how alternative 1 would work. ACTION ITEM 4: Update the list of goals. Notes: 1. Review Agenda/Statements of Interest: Susan Payne was reappointed IPC Secretary for another year. 2. String Contention Mechanisms of Last Resort: https://docs.google.com/document/d/16qDoiK6vydQp6a0v9tMvU2l5fcypJY24hCzTIVTj... [docs.google.com]<https://urldefense.proofpoint.com/v2/url?u=https-3A__docs.google.com_documen...> What is the issue we are trying to address: -- The Working Group has discussed a number of potential issues with the mechanisms of last resort used in the 2012 New gTLD Round. These issues are captured in the Supplemental Initial Report. -- Although the Working Group ultimately believes that when there is string contention, an auction process should be used to select the Registry Operator invited to enter into a Registry Agreement with ICANN, the Working Group is still discussing what forms of private resolution should be allowed (if any), the specific type of auction to be used, and the timing of such an auction. Policy Goals / What the WG is Seeking to Accomplish: -- The WG is largely supportive of existing Implementation Guideline F: 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. Other goals include: 1. Reduce the risk of “bidding wars” in which the winner ultimately overpays for the TLD. * 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. b. Which could include, making it easier to implement “multipliers” for certain types of applicants, such as those eligible for Applicant Support. -- 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: -- Do we still need iii)? An alternative may be, "The ICANN Board may use expert panels to make Community Priority Evaluation determinations." This may also be dependent on recommendations on the new appeals mechanism. -- ICANN Board says it does not make policy. Its decision would be subject to RFR and IRP - very messy so it may be better to stick with what we developed earlier. -- This isn’t about the Board making policy, but making it clear that it’s an auction process rather than the Board making a decision. -- There should be a reference instead to Auction of last resort. -- Agree they are good goals so suggest removing possible description What are we Proposing? -- The Working Group is leaning towards recommending a sealed-bid auction as the ultimate form of auction used as a mechanism to resolve string contention. When a sealed-bid auction is held where bids are submitted without knowing the bid of others in the auction (e.g., prior to evaluating any of the applications) it is also called a Vickrey Auction. A sealed-bid auction can also be used as a mechanism of last resort and at the end of the process. -- With a sealed-bid auction, each applicant submits a sealed bid, stating the amount that they are willing to pay for the TLD. The ultimate “winner” pays the amount submitted by the second-highest bidder.. -- Regardless of when the sealed bid auction is held, if there are one or more Community-based Applications, that/those application(s) would need to be processed first through Community Priority Evaluation before looking at the auction bids. Alternative 1 - Vickrey Auction (No Private Resolution) -- Addresses goals 1, 2, 4, and 6. -- The principle pro here is the seemingly near elimination of private resolution. However, the principle con is the substantial complications this approach introduces (see Additional Considerations, Mostly For Alternative 1 below). Other cons are that other forms of private resolution might be impacted (e.g., joint ventures, string change, etc.) in seeking to eliminate private resolution for financial benefit and that bids are submitted with no contextual information. Alternative 2 - Sealed-Bid Auction allowing Private Resolution -- It seems to be supportive of, or at least not impede, 1, 2, and 6, but in a less pronounced manner as it relates to Alternative 1; the maker of this Alternative has acknowledged that it does not fully address concerns around potential collusion and profiteering on application withdrawals. -- However, some benefits are likely derived by obtaining sealed bids (which can reduce the incentive for all parties to agree to private resolution, if an applicant already knows they have the highest bid). The other main pro here is simplicity - most other processes remain unaffected. Discussion: -- Re: Alternative 2: First bullet point and third bullet point seem incompatible. Third bullet point: “Applicants would still have an opportunity to resolve the contention set through other means such as private auction, a joint venture arrangement or to choose another string as was suggested for ‘brands’ of the same name.” -- Assuming you stayed in only those applicants who stayed in would be revealed on reveal day. So you could still have private resolution. -- For clarity, the third bullet could be swapped with the fourth bullet and add “post reveal day”. In third bullet point, after "opportunity", you would need to insert "after reveal day" or something to clarify that parties become known. -- Question: Wasn’t one of the proposals to outlaw private auctions? So not sure why we are still allowing private resolution. Answer: If we went with alternative 1 we would eliminate private resolution, but not for alternative 2. So that is one of the drawbacks with alternative 2. -- Thought alternative 2 was to allow participants to know how many contention sets there are. Add as a third alternative: Alternative three could remove some of the elements about private resolution. -- They may not resolve privately and should only have a limited period to resolve. If not resolved in a limited period, it should proceed to the sealed bid winner. I am not seeing the time limit in alternative 2 though. Is it there? -- Question: How would the timing work with a string contention objection process? -- How could private auctions be prevented? -- Objections should not be triggered until a winner (or a private resolution winner) is identified. -- Re: Alternative 2 there should be a limited time for private resolution. -- Helpful to put these alternatives out for public comment and indicate whether the WG has a preference. -- Re: Alternative 2 -- Question: For string confusion objections those would have to be heard right away. Additional Considerations: Public Comment: Comments from the public are solicited on all applications regardless of where they are placed in the queue. To do it otherwise would mean opening up separate public comment periods depending on whether there is a need to go to the second bidder, and that would be impossible to monitor. Discussion: -- Strongly support 1 public comment period, for the exact same length of time for all. -- Impractical to have multiple public comments. String Similarity Evaluation: Discussion: -- Don’t see how this fits with the notion of closed bids and timing. You have a scenario where you have some who know who they are bidding against and everyone else doesn’t. -- In the scenario where the result of a string similarity evaluation is that some would have insight into who is in the set -- this is an unfair result. -- Which is why getting every applicant to submit a bid at the point of application is something to consider, even though it may be cumbersome for many. -- What if this fact situation should default to sealed bid only? -- Why would they not be all announced at the same time? -- So we are proposing to treat some applicants differently from others? That does not seem to be in line with the Bylaws. -- Wouldn’t alternative 1 solve this issue? -- What about plurals? -- There was only one case in 2012 that was found to be similar (unicorn/unicom). -- Why string similarity evaluation after reveal day? Why not make it before reveal day? That is a possibility. -- is string similarity not subject to accountability mechanisms and appeals? would that not “reveal” it in some manner? -- Agree with that suggestion re string similarity evaluation occurring first and before reveal day. bids would have to be in before appeal. Objections: Objections on the highest bidder’s application must be filed within the objection period. With respect to objections to the other applications, ICANN would create a system for the filing of “an intent to file an objection.” Discussion: -- Question: What happens when someone indicates that they are filing a community objection and they are filing it against all of the applicants for a string. Answer: All applicants should have a chance to respond. Add text to relay your comment on "can indicate that an objection will apply to all applications for same string"? -- Objections should not come into full proceedings unless and until there is a winner - it's a huge waste of time and money if it does proceed but private parties need to know what the value of the string may be. -- Some concern about not having to submit the objections on a standard timeline, although support not engaging fees or panels until the objection is necessary, based on bidder ordering . -- “time” may benefit some as they build their case. Or could the “intent to file” require some key points that will be included in the objection filing? -- Question: We are agreeing on the principle that the intent to object is a good idea, but when would that happen? Would one party have to state the type of objection and the grounds? Could it just be a party filing very general intent to objection concerning a risk associated with that application. Would there be a panel for an intent to object process? Answer: Proposal was that the objection would be “bare bones”. There would be no panel if it was just an intent to object to one application, but if for all applications (to the string) then one could request a panel. You file your objection against the applicant first in the queue and an intent to file against the others in the queue. Or, you could say I have the same objection to all of the applicants/string. -- Important for private parties in resolution to know that there is an intent to object (but that doesn’t pertain to alternative 1 as there is no private resolution). -- The objection should be submitted within a certain time period. -- The nature of the applicant is important. It's not just the existence of the string. It depends on who is operating it and what the purpose of the tld as stated in the application in Question 18 answers and services to be provided in answer to Question 23. There should be an intent to object process prior to determining the order of the queue with no panel convened. Other complications: Objections if there is more than one Community Application String Confusion Objection Results in the Creation of a New Contention Set or Adds to an Existing Contention Set Appeals/Accountability Mechanisms Applicant Support Program Discussion: -- Seems that these are all related to the attempt to gain efficiencies to know the order of the contention sets. If you don’t need to know the order then you could leave the program untouched. If you go back to the goals knowing the order of the contention sets goes to goals 3, 4, and 5. -- Add a goal: “Increase efficiencies in application evaluation by way of understanding the contention set?” -- Note that alternative 1 would eliminate the goal to allow contention resolution. “If there is contention for strings, applicants may: i) resolve contention between them within a pre-established timeframe”
participants (7)
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Aikman-Scalese, Anne -
Austin, Donna -
Dorrain, Kristine -
Julie Hedlund -
Justine Chew -
Kurt Pritz -
McGrady, Paul D.