[CPWG] [GTLD-WG] Further to WT5 discussion

Sat Nov 17 17:20:14 UTC 2018

Thanks Bastiaan. Currently, as I am understanding it, an applicant who 
does not want to use the string for geo purposes does NOT have to 
explicitly commit to anything. They simply don't go there, they don't 
acknowledge the geo possibilities at all. .Shanghai can be a clothing 
line and there is no need for a perspective buyer to discuss the city 
issue at all. That, to me, is where the "loophole" is. It is entirely 
possible, even probable in many parts of the world, that the city in 
question does not have ICANN or gTLDs on its radar. You can't say that 
the city had no interest if they were not watching, never knew about it.

It would interesting to float the idea that domainers should be 
prohibited, in the contract, from ever making a profit from a geo-name. 
I have a feeling that this would be furiously opposed at many levels. 
You are also suggesting also that cities get the "first right of 
refusal" to take over that name -- with no added costs beyond what the 
name cost in the first place -- this could be 10 years later. Again, I 
don't it would fly at all. The business constituency would go crazy.

IMHO, the best way to address the issue is to make sure all applications 
for non-capital city names get a letter of support or non-objection from 
the city in the first place. If the city does not object -- and it might 
even be offered nice gifts to not object -- that's their decision -- 
then the application goes ahead. If the goal is to prevent scalping or 
whatever you want to call it, this is a lot cleaner than trying to tie 
up profits indefinitely or putting any other kind of language in the 
contract that constrains the rights of the successful applicant. We are 
always looking for predictability. I don't see a better solution.

This doesn't mean all problems are solved. There would still be problems 
around which of the various cities in the world with the same name would 
have priority, etc. etc. -- all of which would have to be addressed. But 
I believe there can be mechanisms put in place to address these things.

Marita

On 11/17/2018 4:23 AM, Bastiaan Goslings wrote:
> Hi Marita, all
>
> Without being an expert here -it’s probably time for me to have a closer look at the AGB- I’m not sure whether I would call this a ‘loophole’ as the rule seems to be there intentionally there. I also would not speculate about unknown ’intentions’ or an agenda that an applicant most likely will not be transparant about.
>
> The way I understand the below is that, as the policy currently stands, an applicant does not need a letter of support or non-objection from the relevant authority as long as it explicitly commits to not use the string to represent the city. A ‘city’ being the example here. Once the applicant receives confirmation that they can operate the gTLD this of course excludes others from doing so, including the city itself. This implies to me that the city had no interest (to gain the right) to operate the gTLD.
>
> If the applicant does not use the gTLD, and it seems they are waiting for others to buy from them the right to do so at an inflated price, and the city decides it does want to have the right to use the gTLD to represent its municipality, then Jonathan’s suggestion to ‘have a rule that city can only be sold it's name is for the base price’ makes sense to me. However I then think the city should have a clear privilege to buy the right, as the original applicant would otherwise sell to the highest bidder.
>
> (I am not sure how to cover the scenario, and I do not know if the .shanghai example fits into this, where the applicant (‘legal entity’) at a profit sells all its shares, in chunks smaller than 15%, to others who intend to operate the gTLD, but for purposes _not_ related to the city)
>
> regards
> Bastiaan
>
>
>
>
>
>
>
>
>
>> On 17 Nov 2018, at 02:46, Jonathan Zuck <JZuck at innovatorsnetwork.org> wrote:
>>
>> Oh we all knew it fell within the current rules but believed there might be a better way to deal with it. For example, we could have a rule that city can only be sold it's name is for the base price.
>>
>> Jonathan Zuck
>> Executive Director
>> Innovators Network Foundation
>> www.Innovatorsnetwork.org
>>
>> From: GTLD-WG <gtld-wg-bounces at atlarge-lists.icann.org> on behalf of Marita Moll <mmoll at ca.inter.net>
>> Sent: Friday, November 16, 2018 6:59:58 PM
>> To: CPWG
>> Subject: [GTLD-WG] [CPWG] Further to WT5 discussion
>>   
>> Colleagues: My presentation at our last meeting suggested that we support revising the AGB wording re: applications for non-capital city names by closing the loop-hole that allows applicants who apply for city names to avoid seeking a letter of support or non-objection from the relevant authority as long as there is no intention to use the string to represent the city. I argued that the reason this wording should be changed is to prevent the owner from then selling the name for a substantial profit to the public authority (city) involved.
>>
>> There was a suggestion at the time that it was an unnecessary measure as there was probably language prohibiting this kind of property "flipping" in the contract. I have posed this question to WT5 and, so far, it seems pretty clear (see thread below) that staking a claim to a geo-name with the intention of reselling it at an inflated price is entirely inside the current rules.
>>
>> Do we think this kind of activity is in the interests of end-users or should we support the change?
>>
>> Marita
>>
>>
>>
>> -------- Forwarded Message --------
>> Subject:	Re: [Gnso-newgtld-wg-wt5] applicant contractual obligations
>> Date:	Fri, 16 Nov 2018 15:54:48 -0500
>> From:	Marita Moll <mmoll at ca.inter.net>
>> To:	gnso-newgtld-wg-wt5 at icann.org
>>
>>
>> Thanks Alexander and anyone else who weights in. Sorry for my misuse of terms -- language is an issue, even for English speakers (sigh).
>>
>> But you realized what I was getting at and answered my question. And so, the suggestion that there might be contract language in place which would prevent the "flipping" (as it is known in the real estate business) of names is incorrect. Indeed, the current situation almost seems to encourage such activity.
>>
>> Marita
>>
>>
>> On 11/16/2018 2:12 PM, Alexander Schubert wrote:
>>> Hi Marita,
>>>
>>> Please clarify your question. "Domain name holder" - what is that supposed
>>> to be? Sounds like a "registrant" of a 2nd level domain? But as we are only
>>> discussing gTLDs on top level you probably mean the "registry operator"?
>>>
>>> After the 2012 round I am very sure that EVERY SINGLE APPLICATION will be
>>> applied for  by using a separate, unique legal entity: "Legal entities" can
>>> be minted by the dozen in no time in most jurisdictions.
>>>
>>> So in other words: You can bet that an applicant entity (and subsequently
>>> registry operator) has a unique legal entity as owner of the gTLD (a legal
>>> entity that is not involved in ANY other business operation but that gTLD).
>>> So there is no real need to "sell the name" (I suppose you mean "the gTLD")
>>> - you can simply sell the LEGAL ENTITY; or its shares! If cleverly done that
>>> doesn't even need to be reported to ICANN: Only if shares of larger than 15%
>>> are being sold, ICANN would look into it (not even sure if that is true
>>> AFTER delegation - please if somebody knows: let us know). So you COULD in
>>> theory at ANY point of time after the submission of your application "sell
>>> the gTLD" (application, applicant, registry operator, whatever stage it is
>>> in) to others, if it's being done in 15% share packages to 7 entities e.g. 6
>>> times 15% and one time 10% each to different "owners"). Please correct me if
>>> I am wrong!
>>>
>>> So if you plan to apply for ".shanghai": Just don't designate it as geo-TLD,
>>> DO NOT MENTION the word "city" or "China" at all. Then you do NOT need to
>>> provide a "letter of non-objection". Once you are sure you are the "winner"
>>> (e.g. you where the only applicant, or you won a private auction) you can
>>> now approach the biggest real estate magnate in Shanghai, or the biggest
>>> media conglomerate: and sell the application by transferring ownership of 7
>>> share packages! It's really THAT simple.  I am warning of this since MONTH.
>>> Again: if I am mixing facts here: point it out to me.
>>>
>>> Thanks,
>>>
>>> Alexander
>>>
>>>
>>>
>>>
>>>
>>> -----Original Message-----
>>> From: Gnso-newgtld-wg-wt5 [
>>> mailto:gnso-newgtld-wg-wt5-bounces at icann.org
>>> ] On
>>> Behalf Of Marita Moll
>>> Sent: Friday, November 16, 2018 6:35 PM
>>> To:
>>> gnso-newgtld-wg-wt5 at icann.org
>>>
>>> Subject: [Gnso-newgtld-wg-wt5] applicant contractual obligations
>>>
>>> Hello. I am wondering whether there is anything in the contract of a domain
>>> name holder that prevents that holder from selling the name to a higher
>>> bidder. I am asking this as it came up in a recent conversation in our
>>> community and, given our lengthy discussions here about domain name
>>> parking/scalping of city or other geo-names, I have assumed that there were
>>> no such restrictions. But, being fairly new here, I was unable to confirm or
>>> deny this idea.
>>>
>>> Thanks for any clarification
>>>
>>> Marita
>>> _______________________________________________
>>> Gnso-newgtld-wg-wt5 mailing list
>>>
>>> Gnso-newgtld-wg-wt5 at icann.org
>>> https://mm.icann.org/mailman/listinfo/gnso-newgtld-wg-wt5
>>>
>>>
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