[Gnso-newgtld-wg] Suggested language for Supplemental interim report related to feedback on auctions from the recently closed comment period.

[Cheryl Langdon-Orr]

Thanks very much for this text Jim, appreciated...



On Sat, Oct 20, 2018, 16:54 Jim Prendergast <jim at galwaysg.com> wrote:

> Jeff and Cheryl – in the spirit of not only identifying problems but also
> providing solutions, see below proposed language that reflects my concerns
> as expressed during the last plenary call and earlier in the meeting about
> including feedback on auctions from the Initial Report.
>
>
>
> Replace the second to last paragraph of section 1.2b which starts with:  *Private
> resolutions, including private auctions, have been noted as a particular
> area of concern by a number of community members…… *
>
>
>
> *With the Following ……*
>
>
>
> While not specifically asking for feedback on private resolutions
> (including private auctions) during the recently closed comment period on
> the Initial Report, the Working Group did receive feedback by a number of
> community members, as well as the ICANN Board.  The group has not had a
> chance to deliberate on this feedback as of yet but provides appropriate
> excerpts below for the benefit of the community as they consider this
> topic:
>
>
>
> *ICANN Board – full comment at
> https://mm.icann.org/pipermail/comments-gtld-subsequent-procedures-initial-03jul18/2018q3/000046.html
> <https://mm.icann.org/pipermail/comments-gtld-subsequent-procedures-initial-03jul18/2018q3/000046.html>
> *
>
> Regarding question 2.7.4.e.2 on “gaming” or abuse of private auction, the
> Board believes that applications should not be submitted as a means to
> engage in private auctions, including for the purpose of using private
> auctions as a method of financing their other applications. This not only
> increases the workload on processing but puts undue financial pressure on
> other applicants who have business plans and financing based on their
> intention to execute the plan described in the application. In particular,
> we are concerned about how gaming for the purpose of financing other
> applications, or with no intent to operate the gTLD as stated in the
> application, can be reconciled with ICANN's Commitments and Core Values.
>
>
>
> *IPC – full comment at
> https://mm.icann.org/pipermail/comments-gtld-subsequent-procedures-initial-03jul18/2018q3/000063.html
> <https://mm.icann.org/pipermail/comments-gtld-subsequent-procedures-initial-03jul18/2018q3/000063.html>
> *
>
> The IPC believes it would be beneficial to study abusive behavior and/or
> gaming that may have occurred in the 2012 round, as well as further
> resolution mechanisms outside of  auctions.
>
>
>
> *ALAC – full comment at
> https://mm.icann.org/pipermail/comments-gtld-subsequent-procedures-initial-03jul18/2018q3/000065.html
> <https://mm.icann.org/pipermail/comments-gtld-subsequent-procedures-initial-03jul18/2018q3/000065.html>
> *
>
> At this point, the community does not know enough about abuse that may
> have occurred in the 2012 round of auctions, both ICANN and private ones.
> Even the legality of private auctions is in question. A study should be
> completed to resolve these issues. Alternatively, ICANN should explore
> other contention resolution mechanisms outside of auctions that may serve
> as more equitable (e.g., like a draw).
>
>
>
> *RySG – Full Comment at
> https://mm.icann.org/pipermail/comments-gtld-subsequent-procedures-initial-03jul18/2018q3/000052.html
> <https://mm.icann.org/pipermail/comments-gtld-subsequent-procedures-initial-03jul18/2018q3/000052.html>
> *
>
> The Registry Stakeholder Group believes that insufficient discussion and
> analysis has yet taken place in the Subsequent Procedures PDP WG on the
> important topic of considerations for resolution of contention sets. These
> include auctions of last resort, private auctions and other alternatives
> although a lottery solution seems to have been rejected, but without
> sufficient explanation as to the basis.
>
> The SubPro WG has never considered the legality of private auctions. Some
> members of the RySG think SubPro WG should consider the legality of such
> auctions as part of its work going forward.
>
> Without significant completion of the work from the CCWG new gTLD Auction
> Proceeds it is difficult to assess the opportunities and risks of
> successful last resort auctions. While the auctions of last resort have
> worked as a process, there may need to be additional transparency processes
> put in place.
>
> Known issues that have been discussed in the Sub Pro PD WG include;
> • During the 2012 new gTLD application round, the private auction process
> was not created until after applications were submitted. However, in
> subsequent procedures, applicants will be aware of the potential financial
> benefit of ‘losing’ in auction and it may become a commonplace component of
> an applicant’s application strategy
> • Concerns that private auctions are not in the public interest because
> the proceeds are shared by auction participants
> • All auctions favor well-funded applicants and communities and minority
> interests are underrepresented
> • The legality of Private Auctions have not yet been considered or
> determined.
>
> We are mindful also that private auctions have permitted competitors to
> split among themselves hundreds of millions of dollars that might otherwise
> have been put to use for the public benefit if such auctions were held by
> ICANN as auctions of last resort. While acknowledging concerns about
> private auctions, the Initial Report contains one short paragraph,
> addressing none of these concerns in detail and providing no substantive
> advice or recommendations. In light of the magnitude of the issues raised
> by private auctions an updated and complete initial report should be
> considered as any final report that does not address the many issues
> surrounding private auctions should be considered deficient.
>
> The RySG observes that several CC2 comments have been filed, but we do not
> believe sufficient investigation or deliberations on these comments, or the
> issues they raise, have occurred, nor has the Sub-Pro PDP WG, to our
> knowledge, obtained sufficient data upon which appropriate deliberations
> could take place.
>
>
>
>
>
> Jim Prendergast
>
> The Galway Strategy Group
>
> jim at galwaysg.com
>
> +1 202-285-3699
>
> @jimpren
>
>
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