NEWS New gTLD applicants ponder private auctions
Applicants for contested new generic top-level domains (gTLDs) are showing interest in using private auctions to determine who wins the rights to a disputed string.
Of nearly 2,000 applications, there are 751 covering 230 duplicated names. Google and Amazon are among several applicants for strings such as .cloud and .app, while two companies want the .merck domain.
T e Internet Corporation for Assigned Names and Numbers (ICANN) is encouraging these parties to work together to resolve confl icts. It does not oppose private auctions but has said it will hold its own auctions as a last resort. T e organisation plans to reserve all proceeds from auctions until “the uses of funds are determined”.
But applicants are worried about giving ICANN more money aſt er already paying $185,000 to register a bid, said head of new gTLD products at
consultant
NetNames, Ben Anderson. “Some people are deeply distrustful of ICANN and resent giving it more money,” he said.
T is is partly because it is unclear how ICANN would decide to spend the money and because some people have raised concerns over confl icts of interests during the process, said Kristina Rosette, an attorney at Covington & Burling.
At least three companies—Sedo, Cramton Associates and Right Of T e Dot—are off ering private auctions, all of which would allow losing applicants to recoup some of their investment. All providers state that winners would pay the amount of the second-highest bid. Depending on the provider, the money would be split either equally or proportionately (ratio to winning bid) between the losers.
Right Of T e Dot is off ering three models: ‘ascending clock’, ‘sealed bid’ and ‘live auction’. T e company’s founders, Michael Berkens and Monte Cahn, said the sealed bid mechanism is the least likely to be “gamed”. T e sealed bid requires applicants to send money in a secure
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package via courier, with an attorney placing the packages in a safe until the auction takes place. All sealed bids would be opened at the same session.
But “probably the best” model would be the ‘ascending clock’, said Rosette. Under this mechanism, off ered by at
least two of the
providers, the auctioneer increases the price and the bidders can either agree to it or drop out. T e last remaining applicant pays whatever the second-highest bidder was willing to pay.
Roland LaPlante, chief marketing offi cer at Afi lias registry, said the auctions introduced “an interesting element of game theory, which is a sign of further innovation”.
One of the most pressing questions for applicants, if they decide to participate in private auctions, is when to enter them. If applicants withdraw their applications before ICANN posts initial evaluation
(IE) results,
expected to be between March and June 2013, ICANN will refund 70 percent of the $185,000 application fee. But if they wait aſt er until the IE stage closes, applicants will recoup only 35 percent.
T is means resolving auctions before March will be an attractive option for companies wishing to reclaim much of
their investment. However, a situation could arise where one company wins an auction but fails to pass ICANN’s IE stage. T is may lead to problems over resolving the ownership of the gTLD.
“We are urging people not to go to auction before IE closes,” said Berkens and Cahn. “T e vast
majority of interested parties want to wait until aſt er IE.”
While ICANN believes that “most” contentions will be resolved before auction, Anderson said some private auctions were likely. “I have been involved in some negotiations—some are going well, others are at an impasse. We are close to a few agreements, but
the private auctions make perfect sense.”
www.worldipreview.com
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