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<p class="MsoNormal">All,<o:p></o:p></p>
<p class="MsoNormal"><o:p> </o:p></p>
<p class="MsoNormal">In preparation for Monday’s Working Group call, you have probably noticed that the topic of Auctions / Mechanisms of Last resort (Topic 35: “Auctions” for short) is listed as the last topic of discussion.<o:p></o:p></p>
<p class="MsoNormal"><o:p> </o:p></p>
<p class="MsoNormal">Leadership had a call on Friday (we now have 2 calls per week, in addition to the full working group 2 calls per week so that we can be prepared for the meetings. During that call, Leadership reviewed each of the comments on Auctions.
<o:p></o:p></p>
<p class="MsoNormal"><o:p> </o:p></p>
<p class="MsoNormal"><b><span style="background:yellow;mso-highlight:yellow">How to Move Forward: Below you see my summary of the comments – which should
<u>not</u> substitute for your review of the comments. We would like to put together a small group to work on seeing if there is a way to take into consideration all of the comments to come up with a proposed solution that could address most of the comments
while also keeping in mind the questions posed by the Board. We would like to give 14 days for this group to see if they can come up with improvements to the recommendations. If they can come up with a proposal, that will then be brought back to the full
WG at that point in time.</span> <span style="background:yellow;mso-highlight:yellow">
Therefore, we are not inclined to cover Auctions in great detail on the call.</span><o:p></o:p></b></p>
<p class="MsoNormal"><b><o:p> </o:p></b></p>
<p class="MsoNormal"><span style="color:#548235;mso-style-textfill-fill-color:#548235;mso-style-textfill-fill-alpha:100.0%">**Word of Caution: For those that believe that if we cannot come to an agreement on this issue, that the ICANN Board will just adopt
the status quo (namely, the way it was implemented in 2012), I would STRONGLY encourage you to read their comments – especially the first comment on asking the Working Group in essence to justify why the WG believes that funds generated from the resolution
of contention sets should not be used to “benefit the global Internet community rather than competing applicants.”
<u>Leadership believes that this is an implicit message from the Board that unless we can come up with a good reason to allow private auctions, it is not something that they look upon with favor</u>. We can be wrong of course, but this is what we read into
their comments.<o:p></o:p></span></p>
<p class="MsoNormal"><o:p> </o:p></p>
<p class="MsoNormal"><b><u>GENERAL OBSERVATIONS FROM COMMENTS<o:p></o:p></u></b></p>
<p class="MsoNormal"><o:p> </o:p></p>
<p class="MsoNormal">Some observations are as follows:<o:p></o:p></p>
<p class="MsoNormal"><o:p> </o:p></p>
<ol style="margin-top:0in" start="1" type="1">
<li class="MsoListParagraph" style="margin-left:0in;mso-list:l0 level1 lfo1">The only complete support was voiced by a few individuals.<o:p></o:p></li><li class="MsoListParagraph" style="margin-left:0in;mso-list:l0 level1 lfo1">The IPC viewed the recommendations as not ideal, but could in theory accept. But that said they are not in favor of using sealed bids for brands (See Below).<o:p></o:p></li><li class="MsoListParagraph" style="margin-left:0in;mso-list:l0 level1 lfo1">A number of groups has no opinion, some of whom however, stated that that was because their own members had differing opinions.<o:p></o:p></li></ol>
<p class="MsoListParagraph"><o:p> </o:p></p>
<ol style="margin-top:0in" start="4" type="1">
<li class="MsoListParagraph" style="margin-left:0in;mso-list:l0 level1 lfo1"><u>ICANN Board Comments:<o:p></o:p></u></li></ol>
<p class="MsoNormal"><u><o:p><span style="text-decoration:none"> </span></o:p></u></p>
<ol style="margin-top:0in" start="4" type="1">
<ol style="margin-top:0in" start="1" type="a">
<li class="MsoListParagraph" style="margin-left:0in;mso-list:l0 level2 lfo1"><span style="font-size:10.0pt;font-family:"Arial",sans-serif;color:black">The Board encourages the PDP WG to provide a rationale why the resolution of contention sets should not be
conducted in a way such that any net proceeds would benefit the global Internet community rather than other competing applicants.</span><o:p></o:p></li><li class="MsoListParagraph" style="margin-left:0in;mso-list:l0 level2 lfo1"><span style="font-size:10.0pt;font-family:"Arial",sans-serif;color:black">If private resolution is allowed, they would like to know why we only bring some of the aspects of the private
resolution into the program (i.e., some transparency requirements, intent, etc.).
</span><o:p></o:p></li><li class="MsoListParagraph" style="margin-left:0in;mso-list:l0 level2 lfo1"><span style="font-size:10.0pt;font-family:"Arial",sans-serif;color:black"> Wants to know if promises/statements in support of the notion of “bona fide” intent can be changed at a later
time or is it just a promise/statement that covers that specific moment and time.</span><o:p></o:p></li><li class="MsoListParagraph" style="margin-left:0in;mso-list:l0 level2 lfo1"><span style="font-size:10.0pt;font-family:"Arial",sans-serif;color:black">Concerned about subjectively trying to determine the state of mind of applicants – Wants the WG “to provide
a clear problem statement of what types of behavior or abuse the requirement of bona fide applications is meant to address; then could then use such a statement to provide objective criteria for assessing the bona fide nature of an application.</span><o:p></o:p></li><li class="MsoListParagraph" style="margin-left:0in;mso-list:l0 level2 lfo1"><span style="font-size:10.0pt;font-family:"Arial",sans-serif;color:black">Wants us to confirm that a statement of bona fide intent is required of ALL applications as opposed to just
those in auctions. – </span><span style="font-size:10.0pt;font-family:"Arial",sans-serif;color:red">Leadership believes intent was for ALL applications.</span><o:p></o:p></li><li class="MsoListParagraph" style="margin-left:0in;mso-list:l0 level2 lfo1"><span style="font-size:10.0pt;font-family:"Arial",sans-serif">Board provides a hypothetical of an applicant that applies for 20 TLDs, but only intends on operating 5 of them.
</span><o:p></o:p></li></ol>
</ol>
<p class="MsoListParagraph" style="margin-left:1.5in;text-indent:-1.5in;mso-text-indent-alt:-9.0pt;mso-list:l0 level3 lfo1">
<![if !supportLists]><span style="mso-list:Ignore"><span style="font:7.0pt "Times New Roman"">
</span>i.<span style="font:7.0pt "Times New Roman""> </span></span><![endif]><span style="font-size:10.0pt;font-family:"Arial",sans-serif">Does that mean that for the 15 they don’t take that they were not made with a bona fide intent?</span><o:p></o:p></p>
<p class="MsoListParagraph" style="margin-left:1.5in;text-indent:-1.5in;mso-text-indent-alt:-9.0pt;mso-list:l0 level3 lfo1">
<![if !supportLists]><span style="mso-list:Ignore"><span style="font:7.0pt "Times New Roman"">
</span>ii.<span style="font:7.0pt "Times New Roman""> </span></span><![endif]><span style="font-size:10.0pt;font-family:"Arial",sans-serif">Does ICANN need to get all investors and those with controlling interests in every application to certify intent.</span><o:p></o:p></p>
<ol style="margin-top:0in" start="4" type="1">
<ol style="margin-top:0in" start="7" type="a">
<li class="MsoListParagraph" style="margin-left:0in;mso-list:l0 level2 lfo1"><span style="font-size:10.0pt;font-family:"Arial",sans-serif">To SUM UP: Wants more Objectivity.</span><o:p></o:p></li></ol>
</ol>
<p class="MsoListParagraph" style="margin-left:1.0in"><span style="font-size:10.0pt;font-family:"Arial",sans-serif;color:black"></span><o:p></o:p></p>
<ol style="margin-top:0in" start="5" type="1">
<li class="MsoListParagraph" style="margin-left:0in;mso-list:l0 level1 lfo1">After those comments, the rest of the comments are all over the place. I don’t mean that in a negative way, its just that they cover the wide range of the spectrum from:<o:p></o:p></li></ol>
<p class="MsoListParagraph"><o:p> </o:p></p>
<ol style="margin-top:0in" start="5" type="1">
<ol style="margin-top:0in" start="1" type="a">
<li class="MsoListParagraph" style="margin-left:0in;mso-list:l0 level2 lfo1"><u>Private Resolution of Contention Sets</u><o:p></o:p></li></ol>
</ol>
<p class="MsoListParagraph" style="margin-left:1.5in;text-indent:-1.5in;mso-text-indent-alt:-9.0pt;mso-list:l0 level3 lfo1">
<![if !supportLists]><span style="mso-list:Ignore"><span style="font:7.0pt "Times New Roman"">
</span>i.<span style="font:7.0pt "Times New Roman""> </span></span><![endif]>NCSG does not believe that parties should be able to pay each other for withdrawing apps – Not in Favor of Private Auctions<o:p></o:p></p>
<p class="MsoListParagraph" style="margin-left:1.5in;text-indent:-1.5in;mso-text-indent-alt:-9.0pt;mso-list:l0 level3 lfo1">
<![if !supportLists]><span style="mso-list:Ignore"><span style="font:7.0pt "Times New Roman"">
</span>ii.<span style="font:7.0pt "Times New Roman""> </span></span><![endif]>Galway Strategy Group – cites Board comments and believes private auctions will cause reputational harm to ICANN.<o:p></o:p></p>
<p class="MsoListParagraph" style="margin-left:1.5in;text-indent:-1.5in;mso-text-indent-alt:-9.0pt;mso-list:l0 level3 lfo1">
<![if !supportLists]><span style="mso-list:Ignore"><span style="font:7.0pt "Times New Roman"">
</span>iii.<span style="font:7.0pt "Times New Roman""> </span></span><![endif]>Article 19 does not support private auctions<o:p></o:p></p>
<p class="MsoListParagraph" style="margin-left:1.5in;text-indent:-1.5in;mso-text-indent-alt:-9.0pt;mso-list:l0 level3 lfo1">
<![if !supportLists]><span style="mso-list:Ignore"><span style="font:7.0pt "Times New Roman"">
</span>iv.<span style="font:7.0pt "Times New Roman""> </span></span><![endif]>ALAC concerned about gaming the process through private auctions and thus does not support them.<o:p></o:p></p>
<p class="MsoListParagraph" style="margin-left:1.5in;text-indent:-1.5in;mso-text-indent-alt:-9.0pt;mso-list:l0 level3 lfo1">
<![if !supportLists]><span style="mso-list:Ignore"><span style="font:7.0pt "Times New Roman"">
</span>v.<span style="font:7.0pt "Times New Roman""> </span></span><![endif]>GoDaddy not concerned with issues raised on private auction<o:p></o:p></p>
<p class="MsoListParagraph" style="margin-left:1.5in"><o:p> </o:p></p>
<ol style="margin-top:0in" start="5" type="1">
<ol style="margin-top:0in" start="2" type="a">
<li class="MsoListParagraph" style="margin-left:0in;mso-list:l0 level2 lfo1"><u>Mechanism of the Last Resort Auction</u><o:p></o:p></li></ol>
</ol>
<p class="MsoListParagraph" style="margin-left:1.5in;text-indent:-1.5in;mso-text-indent-alt:-9.0pt;mso-list:l0 level3 lfo1">
<![if !supportLists]><span style="mso-list:Ignore"><span style="font:7.0pt "Times New Roman"">
</span>i.<span style="font:7.0pt "Times New Roman""> </span></span><![endif]>BRG (Brand Registry Group), BC and IPC do not supporting sealed bids
<o:p></o:p></p>
<p class="MsoListParagraph" style="margin-left:1.5in;text-indent:-1.5in;mso-text-indent-alt:-9.0pt;mso-list:l0 level3 lfo1">
<![if !supportLists]><span style="mso-list:Ignore"><span style="font:7.0pt "Times New Roman"">
</span>ii.<span style="font:7.0pt "Times New Roman""> </span></span><![endif]>BC and ALAC prefer Vickrey Auction<o:p></o:p></p>
<p class="MsoListParagraph" style="margin-left:1.5in;text-indent:-1.5in;mso-text-indent-alt:-9.0pt;mso-list:l0 level3 lfo1">
<![if !supportLists]><span style="mso-list:Ignore"><span style="font:7.0pt "Times New Roman"">
</span>iii.<span style="font:7.0pt "Times New Roman""> </span></span><![endif]>Commercial and Noncommercial entities should not be in auction with each other – GAC<o:p></o:p></p>
<p class="MsoListParagraph" style="margin-left:1.5in;text-indent:-1.5in;mso-text-indent-alt:-9.0pt;mso-list:l0 level3 lfo1">
<![if !supportLists]><span style="mso-list:Ignore"><span style="font:7.0pt "Times New Roman"">
</span>iv.<span style="font:7.0pt "Times New Roman""> </span></span><![endif]>Concerned that the only way to change or withdraw their bid is to withdraw the entire application - RySG<o:p></o:p></p>
<p class="MsoListParagraph" style="margin-left:1.0in"><o:p> </o:p></p>
<ol style="margin-top:0in" start="5" type="1">
<ol style="margin-top:0in" start="3" type="a">
<li class="MsoListParagraph" style="margin-left:0in;mso-list:l0 level2 lfo1"><u>“Bona Fide” Intentions</u><o:p></o:p></li></ol>
</ol>
<p class="MsoListParagraph" style="margin-left:1.5in;text-indent:-1.5in;mso-text-indent-alt:-9.0pt;mso-list:l0 level3 lfo1">
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</span>i.<span style="font:7.0pt "Times New Roman""> </span></span><![endif]>Standard too vague – Article 19<u>
</u><o:p></o:p></p>
<p class="MsoListParagraph" style="margin-left:1.5in;text-indent:-1.5in;mso-text-indent-alt:-9.0pt;mso-list:l0 level3 lfo1">
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</span>ii.<span style="font:7.0pt "Times New Roman""> </span></span><![endif]>Criteria provided are subjective and can be gamed (thus not predictable) – BC<o:p></o:p></p>
<p class="MsoListParagraph" style="margin-left:1.5in;text-indent:-1.5in;mso-text-indent-alt:-9.0pt;mso-list:l0 level3 lfo1">
<![if !supportLists]><span style="mso-list:Ignore"><span style="font:7.0pt "Times New Roman"">
</span>iii.<span style="font:7.0pt "Times New Roman""> </span></span><![endif]>Wants both ICANN and Evaluators to ask CQs on Bona Fide intentions – GoDaddy<o:p></o:p></p>
<p class="MsoListParagraph" style="margin-left:1.5in;text-indent:-1.5in;mso-text-indent-alt:-9.0pt;mso-list:l0 level3 lfo1">
<![if !supportLists]><span style="mso-list:Ignore"><span style="font:7.0pt "Times New Roman"">
</span>iv.<span style="font:7.0pt "Times New Roman""> </span></span><![endif]>Not sufficiently defined; neither are the punitive measures; Does not believe this addresses Board concerns - GAC<o:p></o:p></p>
<p class="MsoListParagraph" style="margin-left:1.5in;text-indent:-1.5in;mso-text-indent-alt:-9.0pt;mso-list:l0 level3 lfo1">
<![if !supportLists]><span style="mso-list:Ignore"><span style="font:7.0pt "Times New Roman"">
</span>v.<span style="font:7.0pt "Times New Roman""> </span></span><![endif]>Does not believe that bona fide intent is incredibly difficult to quantify – RySG<o:p></o:p></p>
<p class="MsoListParagraph" style="margin-left:1.5in;text-indent:-1.5in;mso-text-indent-alt:-9.0pt;mso-list:l0 level3 lfo1">
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</span>vi.<span style="font:7.0pt "Times New Roman""> </span></span><![endif]>Bona Fide requirements are completely unenforceable – Galway Strategy Group<o:p></o:p></p>
<p class="MsoListParagraph" style="margin-left:1.5in;text-indent:-1.5in;mso-text-indent-alt:-9.0pt;mso-list:l0 level3 lfo1">
<![if !supportLists]><span style="mso-list:Ignore"><span style="font:7.0pt "Times New Roman"">
</span>vii.<span style="font:7.0pt "Times New Roman""> </span></span><![endif]>Too Subjective – ALAC<o:p></o:p></p>
<p class="MsoNormal"><o:p> </o:p></p>
<p class="MsoNormal">**I have not included ICANN Org comments in this summary because in general they do not take a view on these issues, but rather ask detailed questions on implementing the bona fide intention aspect and whether this needs a specific evaluation,
etc. In other words, if we continue down the ‘Bona Fide” Intention path, then we will need to address these questions (or refer them to the IRT_).<o:p></o:p></p>
<p class="MsoListParagraph" style="margin-left:1.5in"><o:p> </o:p></p>
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<p class="MsoNormal" style="text-align:justify"><span style="font-family:"Arial",sans-serif;color:#06175F">Jeffrey J. Neuman</span><span style="font-size:12.0pt;font-family:"Times New Roman",serif"><o:p></o:p></span></p>
<p class="MsoNormal" style="text-align:justify"><span style="font-family:"Arial",sans-serif;color:black">Founder & CEO</span><span style="font-size:12.0pt;font-family:"Times New Roman",serif"><o:p></o:p></span></p>
<p class="MsoNormal" style="text-align:justify"><span style="font-family:"Arial",sans-serif;color:#06175F">JJN Solutions, LLC</span><span style="font-size:12.0pt;font-family:"Times New Roman",serif"><o:p></o:p></span></p>
<p class="MsoNormal" style="text-align:justify"><span style="font-family:"Arial",sans-serif;color:black">p: +1.202.549.5079</span><span style="font-size:12.0pt;font-family:"Times New Roman",serif"><o:p></o:p></span></p>
<p class="MsoNormal" style="text-align:justify"><span style="font-family:"Arial",sans-serif;color:black">E:
</span><span style="font-size:12.0pt;font-family:"Times New Roman",serif"><a href="mailto:jeff@jjnsolutions.com"><span style="font-size:11.0pt;font-family:"Arial",sans-serif;color:#1155CC">jeff@jjnsolutions.com</span></a><o:p></o:p></span></p>
<p class="MsoNormal" style="text-align:justify"><span style="font-family:"Arial",sans-serif;color:black">http://jjnsolutions.com</span><span style="font-size:12.0pt;font-family:"Times New Roman",serif"><o:p></o:p></span></p>
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