[CPWG] Auctions // At-Large/ALAC positions to New gTLD Subsequent Procedures Supplemental Initial Report

[Olivier MJ Crépin-Leblond]

Dear colleagues,

on our last CPWG call, Christopher Wilkinson presented his opposition to
Auction being used as a mechanism of last resort to resolve contention
sets within the Program.

The current proposed ALAC response (
https://community.icann.org/x/Jh68BQ ) says:

*The ALAC supports the retention of auctions to be conducted by
ICANN-appointed auction service providers as a mechanism of last resort
to resolve contention sets within the Program in the first instance,
with more guidance and resources to be put in place to help applicants
get out of contentions sets voluntarily. The ALAC further proposes the
ICANN Community explore the introduction of a multiplier-enhanced
Vickrey auction in place of the regular highest-bid auction process as
the resolution mechanism of last resort.

*Multiplier enhanced Vickrey auctions are sealed bid auctions where the
applicants benefiting from Applicant Support Program, or Community
Priority Evaluation, have their secret bid automatically upgraded by a
fixed but capped multiplier (such as factor of 1.25 for example) (eg.
such an applicant’s bid of US$400,000 is automatically deemed as
US$500,000 when eventually ‘revealed’ in a Vickrey auction)

The ALAC response also says: "/The ALAC continues to hold the belief
that auctions, by design wherein the highest bid prevails, will
naturally favour applicants with access to the greatest financial
resources or deepest pockets and by extension, disadvantage less wealthy
applicants (such as Applicant Support Program applicants). Whereas it is
not always the case that the “best” applicant is the one with the most
resources./"

Christopher's proposed response says:

/2.1.c.1    In general I do not support auctions They favour the parties
with the 'deepest pockets'. They also burden the successful applicant
with financial liabilities, particularly if the auction has been
financed by debt or third party investment. Those additional costs will
be passed on to the eventual registrants through fees and charges.//
//
//It would be better if TLD registries were operated on a not-for-profit
basis in the public interest. This would also reduce the financial
incentive not to cooperate and to go to a forced auction.//
/
and

/2.1.d.2.1    Agreed. The RFP options should be thoroughly explored and
codified. In the case of geographical TLDs the RFP should be undertaken
by the public authority or other responsible entity in the geography
concerned. The successful applicant's registry should be incorporated in
that jurisdiction./

Thus Christopher favours a RFP process to choose the winner of a
contention set.

With only a few days to go until this Statement is frozen (19th Dec), we
need to reach a consensus on this - as I have heard several people
mention they do not want auctions, should a minority Statement be
included in response to this question? Let's please discuss this topic now.

Kindest regards,

Olivier


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