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<p class="MsoNormal"><span lang="EN-US" style="color:#1F497D;mso-fareast-language:EN-US">Dear all<o:p></o:p></span></p>
<p class="MsoNormal"><span lang="EN-US" style="color:#1F497D;mso-fareast-language:EN-US"><o:p> </o:p></span></p>
<p class="MsoNormal"><span lang="EN-US" style="color:#1F497D;mso-fareast-language:EN-US">Just to note that the GAC, through its consensus input of September 29<sup>th</sup> 2020, reiterated longstanding views which are very critical with private auctions, I
quote:<o:p></o:p></span></p>
<p class="MsoNormal"><span lang="EN-US" style="color:#1F497D;mso-fareast-language:EN-US"><o:p> </o:p></span></p>
<h5 style="margin-left:36.0pt;text-indent:-18.0pt;mso-list:l1 level1 lfo4"><![if !supportLists]><span lang="EN" style="font-size:13.0pt;line-height:115%;color:#244061;text-decoration:none"><span style="mso-list:Ignore">●<span style="font:7.0pt "Times New Roman"">
</span></span></span><![endif]><span lang="EN-US" style="color:#1F497D;mso-fareast-language:EN-US">“</span><b><span lang="EN" style="font-size:13.0pt;line-height:115%;color:#244061">Auctions: Mechanisms of Last Resort/Private Resolution of Contention Sets:
Topic 35 in </span></b><span lang="EN"><a href="https://gnso.icann.org/sites/default/files/file/field-file-attach/draft-final-report-new-gtld-subsequent-20aug20-en.pdf"><b><span style="font-size:13.0pt;line-height:115%;color:windowtext;text-decoration:none">Draft
Final Report</span></b></a></span><b><span lang="EN" style="font-size:13.0pt;line-height:115%"><o:p></o:p></span></b></h5>
<p class="MsoNormal" style="margin-top:10.0pt;text-align:justify"><span lang="EN-US" style="color:black">While the GAC acknowledges that, in an attempt to reduce potential gaming, the PDP WG recommendation 35.3 includes the need for applications to be submitted
with a “bona fide” intention to operate a TLD, the GAC recommends further discussion on how this intention will be ensured and implemented, and notes that punitive measures for non compliance or submission of a “bona fide” intention are not sufficiently defined.
The GAC expresses concerns on whether the “bona fide” intention and Contention Resolution Transparency Requirements sufficiently answer the ICANN Board concerns relative to the permission of private resolutions (including auctions) as a mechanism to resolve
string contention. </span><span lang="EN-US" style="font-size:12.0pt;color:black"><o:p></o:p></span></p>
<p class="MsoNormal" style="text-align:justify"><span lang="EN-US" style="color:black"><o:p> </o:p></span></p>
<p class="MsoNormal" style="text-align:justify"><span lang="EN-US" style="color:black">Regarding Auctions of Last resort, the GAC reaffirms its view that they should not be used in contentions between commercial and non-commercial applications,
<span style="background:yellow;mso-highlight:yellow">and reiterates that private auctions should be strongly disincentivized.</span>”
<o:p></o:p></span></p>
<p class="MsoNormal" style="text-align:justify"><span lang="EN-US" style="color:black"><o:p> </o:p></span></p>
<p class="MsoNormal" style="text-align:justify"><span lang="EN-US" style="color:black">Kindly<o:p></o:p></span></p>
<p class="MsoNormal" style="text-align:justify"><span lang="EN-US" style="color:black"><o:p> </o:p></span></p>
<p class="MsoNormal" style="text-align:justify"><span lang="EN-US" style="color:black">Jorge
</span><u><span lang="EN-US" style="color:#1155CC"><o:p></o:p></span></u></p>
<p class="MsoNormal"><span lang="EN-US" style="color:#1F497D;mso-fareast-language:EN-US"><o:p> </o:p></span></p>
<p class="MsoNormal"><span lang="EN-US" style="color:#1F497D;mso-fareast-language:EN-US"><o:p> </o:p></span></p>
<div>
<div style="border:none;border-top:solid #E1E1E1 1.0pt;padding:3.0pt 0cm 0cm 0cm">
<p class="MsoNormal"><b><span lang="DE">Von:</span></b><span lang="DE"> Gnso-newgtld-wg <gnso-newgtld-wg-bounces@icann.org>
<b>Im Auftrag von </b>Jim Prendergast<br>
<b>Gesendet:</b> Mittwoch, 13. Januar 2021 23:47<br>
<b>An:</b> gnso-newgtld-wg@icann.org<br>
<b>Betreff:</b> [Gnso-newgtld-wg] Challenge to designation on Recommendation 35.2<o:p></o:p></span></p>
</div>
</div>
<p class="MsoNormal"><o:p> </o:p></p>
<p class="MsoNormal"><span lang="EN-US" style="font-size:12.0pt">Cheryl and Jeff <o:p>
</o:p></span></p>
<p class="MsoNormal"><span lang="EN-US" style="font-size:12.0pt"><o:p> </o:p></span></p>
<p class="MsoNormal"><span lang="EN-US" style="font-size:12.0pt">Thanks for the call yesterday explaining the process by which you made consensus designations. I appreciated the tremendous effort that went into this exercise.<o:p></o:p></span></p>
<p class="MsoNormal"><span lang="EN-US" style="font-size:12.0pt"><o:p> </o:p></span></p>
<p class="MsoNormal"><span lang="EN-US" style="font-size:12.0pt">Purpose of this email is to challenge the designation of Recommendation 35.2 which is currently deemed Consensus. While I may refer to determinations for recommendations, it is not my intent
to challenge those with this email. <o:p></o:p></span></p>
<p class="MsoNormal"><span lang="EN-US" style="font-size:12.0pt"><o:p> </o:p></span></p>
<p class="MsoNormal"><span lang="EN-US" style="font-size:12.0pt">For reference, 35.2 reads as follows<o:p></o:p></span></p>
<p class="MsoNormal" style="margin-left:36.0pt"><span lang="EN-US" style="font-size:12.0pt">Recommendation 35.2: Consistent with the Application Change processes set forth under Topic 20: Application Change Requests, the Applicant Guidebook (AGB) must reflect
that applicants will be permitted to creatively resolve contention sets in a multitude of manners, including but not limited to business combinations or other forms of joint ventures and private resolutions (including private auctions).<o:p></o:p></span></p>
<p class="MsoNormal" style="margin-left:72.0pt"><span lang="EN-US" style="font-size:12.0pt">• All private resolutions reached by means of forming business combinations or other joint ventures resulting in the withdrawal of one or more applications are subject
to the Application Change processes set forth under Topic 20: Application Change Requests.<o:p></o:p></span></p>
<p class="MsoNormal" style="margin-left:72.0pt"><span lang="EN-US" style="font-size:12.0pt">• Any materially modified application resulting from a private resolution will be subject to a new operational comment period on the changes as well as a new period
to file objections; provided however, objections during this new period must be of the type that arise due to the changing circumstances of the application and not merely the type of objection that could have been filed against the surviving application or
the withdrawn applications in the contention set during the initial objection filing period.<o:p></o:p></span></p>
<p class="MsoNormal" style="margin-left:72.0pt"><span lang="EN-US" style="font-size:12.0pt">•All contention sets resolved through private resolution shall adhere to the transparency requirements set forth in the Contention Resolution Transparency Requirements
in the relevant recommendation.<o:p></o:p></span></p>
<p class="MsoNormal"><span lang="EN-US" style="font-size:12.0pt"><o:p> </o:p></span></p>
<p class="MsoNormal"><span lang="EN-US" style="font-size:12.0pt">My challenge touches on the following points – inconsistency of determinations between recommendations and
<a name="_Hlk61437132">Leadership’s desire to preserve other parts of the recommendation</a>.
<o:p></o:p></span></p>
<p class="MsoNormal"><b><span lang="EN-US" style="font-size:12.0pt"><o:p> </o:p></span></b></p>
<p class="MsoNormal"><b><span lang="EN-US" style="font-size:12.0pt">Inconsistent determinations<o:p></o:p></span></b></p>
<p class="MsoNormal"><span lang="EN-US" style="font-size:12.0pt">In discussing the determination to classify recommendation 35.4 as Strong Support but Significant Opposition, Leadership talked about the number comments received, the diversity of those comments
and a consultation of public comments. Further examination shows that the majority the 11 comments on the consensus call came from members of the IPC which should not surprise anyone as they also filed a
<a href="https://docs.google.com/spreadsheets/d/1kmZRLAsW6wlTyQ8LA3KhOQzU1UABL9zCPWw39Yc9lB8/edit#gid=1091535370">
public comment</a> on this. The only other comment on this recommendation was a support of the IPC response to Public Comment by PETILLION Law Firm, an IPC member. The balance of the consensus call comments came from individuals, RySG members and an ALAC
member.<o:p></o:p></span></p>
<p class="MsoNormal"><span lang="EN-US" style="font-size:12.0pt"><o:p> </o:p></span></p>
<p class="MsoNormal"><span lang="EN-US" style="font-size:12.0pt">Compare that to the comments that came in on 35.2. While there may not been the same number of emails that came in on 35.4, you had more diversity than what was accepted for 35.4. There were
consensus call responses from individuals as well as members of the ALAC, RySG, and the GAC. In the public comments, you had opposition to Private auctions from the following ICANN SO/AC/SGs
<o:p></o:p></span></p>
<ul style="margin-top:0cm" type="disc">
<li class="MsoNormalCxSpMiddle" style="color:black;margin-bottom:8.0pt;mso-add-space:auto;line-height:105%;mso-list:l2 level1 lfo3">
<span lang="EN-US" style="font-size:12.0pt;line-height:105%;color:windowtext">Non-Commercial Stakeholder Group - “…</span><span lang="EN-US" style="font-size:12.0pt;line-height:105%">we support the move to set aside private actions.” “Private auctions should
simply be banned, and other solutions such as Vickrey auctions and “sealed bid, second price auctions” through the ICANN-run auction process should be adopted for the fairness and integrity of the auction process.”<o:p></o:p></span></li><li class="MsoNormalCxSpMiddle" style="color:black;margin-bottom:8.0pt;mso-add-space:auto;line-height:105%;mso-list:l2 level1 lfo3">
<span lang="EN-US" style="font-size:12.0pt;line-height:105%">Business Constituency - "As we said in 2018, the BC recommends that private auctions be eliminated.”<o:p></o:p></span></li><li class="MsoNormalCxSpMiddle" style="color:black;margin-bottom:8.0pt;mso-add-space:auto;line-height:105%;mso-list:l2 level1 lfo3">
<span lang="EN-US" style="font-size:12.0pt;line-height:105%">At-Large Advisory Committee - The ALAC remains concerned about efforts to “game” the application process, in part, through the use of private auctions. We disagree with the SubPro WG recommendation
to allow them and believe that attempts to determine “good faith” will ultimately be little more than window dressing. Further, the proposed “sealed bid, second price auction” compromise, while superior to the status quo, represents a highly watered down version
of the far superior traditional Vickrey auction. The ALAC implore the working group to revisit the prohibition of private auctions and implement a true Vickrey auction solution.”<o:p></o:p></span></li></ul>
<p class="MsoNormal"><span lang="EN-US" style="font-size:12.0pt;color:black">When asked if leadership had consulted these responses to the public comments, we were told that unless someone from one of those SO/ACs/SGs specifically replied on the consensus call,
they were not consulted. By that standard, the opposition from the Business Constituency and the NCSG was ignored and not used to calculate the designation.
<o:p></o:p></span></p>
<p class="MsoNormal"><span lang="EN-US" style="font-size:12.0pt;color:black"><o:p> </o:p></span></p>
<p class="MsoNormal"><span lang="EN-US" style="font-size:12.0pt;color:black">This discounting of a comment from a SO/AC/SG is especially troubling because as many in this this working group have said, as an individual, we cannot speak for an SO/AC/SG but when
the SO/AC/SG does speak, like the NCSG, BC and ALAC have, it should carry weight. Many of us also know how difficult it is to get a diverse group of voices within an SO/AC/SG to agree to submit a statement on behalf of the entire group. To hear these were
not considered is disappointing.</span><span lang="EN-US" style="font-size:12.0pt"><o:p></o:p></span></p>
<p class="MsoNormal"><b><span lang="EN-US" style="font-size:12.0pt"><o:p> </o:p></span></b></p>
<p class="MsoNormal"><b><span lang="EN-US" style="font-size:12.0pt">Leadership’s desire to preserve other parts of the recommendation
<o:p></o:p></span></b></p>
<p class="MsoNormal"><span lang="EN-US" style="font-size:12.0pt">During our discussion, I agreed with Leadership’s assertion that there was not opposition in spirit to the ability to settle contention sets via “private resolution” which could include joint
ventures and other arrangements as well as all the other provisions included in the recommendation. But the drafting of the recommendation and the inclusion of “and private resolutions (including private auctions)” poisons the entire recommendation.
<o:p></o:p></span></p>
<p class="MsoNormal"><span lang="EN-US" style="font-size:12.0pt"><o:p> </o:p></span></p>
<p class="MsoNormal"><span lang="EN-US" style="font-size:12.0pt">I understand the desire of leadership to not have to discard what are very good recommendations but in response to leadership’s direction to be very specific, people were specific in their opposition
to private auctions and not to the entire recommendation. If WG members had known that we had to object to the entire recommendation, as opposed to being specific, the responses would have been different. I fear that in a desire to preserve the rest of the
recommendation, leadership is discounting the opposition to Private Auctions. While understandable, that potential bias cannot stand.<o:p></o:p></span></p>
<p class="MsoNormal"><span lang="EN-US" style="font-size:12.0pt"><o:p> </o:p></span></p>
<p class="MsoNormal"><span lang="EN-US" style="font-size:12.0pt">Thanks for your consideration.<o:p></o:p></span></p>
<p class="MsoNormal"><span lang="EN-US" style="font-size:12.0pt"><o:p> </o:p></span></p>
<p class="MsoNormal"><span lang="EN-US" style="font-size:12.0pt">Jim Prendergast<o:p></o:p></span></p>
<p class="MsoNormal"><span lang="EN-US" style="font-size:12.0pt">The Galway Strategy Group<o:p></o:p></span></p>
<p class="MsoNormal"><span lang="EN-US" style="font-size:12.0pt"><a href="mailto:jim@galwaysg.com">jim@galwaysg.com</a><o:p></o:p></span></p>
<p class="MsoNormal"><span lang="EN-US" style="font-size:12.0pt">+1 202-285-3699<o:p></o:p></span></p>
<p class="MsoNormal"><span lang="EN-US" style="font-size:12.0pt">@jimpren<o:p></o:p></span></p>
<p class="MsoNormal"><span lang="EN-US" style="font-size:12.0pt"><o:p> </o:p></span></p>
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