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

[Justine Chew]

Thanks for this Olivier.

All,

If I could just pose a reminder, in my positions presentation I did
highlight more than once the point about auctions being unfair to
applicants without deep pockets -- and to bring a long story short, I
attempted to meld a few aspects together by taking the earlier consensus
for Vickrey auction to help discourage attempts at speculative applications
and suggesting the addition of the multiplier feature intended to help to
level the playing field for less wealthy applicants (namely ASP and CPE
applications).

Note also that because some members felt that a criteria-based Request for
Proposal (RFP) process would necessarily involved value judgment being made
by evaluators (whoever they may be) which is in practice difficult to
implement - CPE from 2012 as the case in point - so they thought the
Vickrey auction option might lead to less 'dubious' results.

And finally, in the draft statement we have advocated that greater effort
should be put into guiding and facilitating resolution of contention sets
through (permissible) voluntary resolution mechanisms (again criteria
proposed to be more fully explored) so as to minimize the number of
contention sets going through to auction (ie. Vickrey auction).

So, perhaps I should have started off with that .... as a proposed revision
of the blue text paragraph which Olivier highlighted (which was meant to
act of a summary of the ensuing paragraphs of explanation) ....

*The ALAC proposes that** 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** but emphasizes
that more guidance and resources to be put in place to help applicants get
out of contentions sets voluntarily in order to avoid going through to
auctions for resolution. In the event a Vickrey auction is to proceed, then
it should be **conducted by ICANN-appointed auction service providers.*

I can re-write the draft statement subject to the outcome of this
discussion.

Thank you.

Justine
-----


On Fri, 14 Dec 2018 at 17:11, Seun Ojedeji <seun.ojedeji at gmail.com> wrote:

> Hello Olivier,
>
> Thanks for bringing this to our attention. I share the concern of CW but I
> think the proposed text may be an incomplete solution.
>
> Unless RFP is an acronym with different meaning within ICANN, if it means
> Request For Proposal then it needs to be clear how the selection will be
> done between all submitted RFPs as I think that is the difficult part. It
> may be good to hear details/summary of how CW envisage this happening.
>
> Regards
>
> Sent from my mobile
> Kindly excuse brevity and typos
>
> On Fri, 14 Dec 2018, 09:45 Olivier MJ Crépin-Leblond <ocl at gih.com wrote:
>
>> 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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