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

Sat Nov 17 22:41:29 UTC 2018

Hi there,

Let’s look at the issue from a neutral perspective:

City name based gTLDs will be insanely attractive in the COMING round. They weren’t attractive in the last round to the VC funded portfolio applicants as the “letter of non-objection” was too cumbersome, and ALL generic top premium keywords were available. So why bother with city names?

In the coming round (2020/2021) this changed: City name based gTLDs proved to be solid! Almost all premium generic keywords are taken. 

So there will be many who want to “invest” in city name based gTLDs:

*         Portfolio applicants

*         “Speculators”

*         Or entities that just feel: “Hey, I can do that” (e.g. a media company in the city)

The letter if non-objection has drawbacks:

*         Often cities want public tenders

*         Some cities want to introduce something I call “gTLD tax” – in other words: they want to participate in the profits!

*         Some of the applicants try to “bribe” the city (happened a LOT in the 2012 round btw): “Hey, you get 75% of all profits if you let us do what we want to do” (then of course the “profits” were artificially diluted, but the city doesn’t know).

*         In any case: almost always the acquisition of the  letter of non-object requires TIME, ENERGY and MONEY! And usually creates a business disadvantage in the end!

So many applicants will try to AVOID having to get that letter in 2020/2021! It saves money, time, energy and it creates a business advantage compared to those who abide by the rules!

And actually you don’t have much to completely avoid the letter if non-objection! We are always talking about the “non-geo use provision”; which allows to apply and operate a city name based gTLD WITHOUT letter of non-objection, IF there is no geo-use intent! But in reality it’s NOT that you have to declare that “non-geo use”; it’s actually the OTHER way around: Only IF you mention the city and use for the city in the application, the geo names panel will ask for the letter of non-objection!

Example:

“.shanghai”    (a worldwide known mega city with 24 Million people! If it were a country, then only 50 other countries were larger population wise and 180 countries were SMALLER!)

If you want to apply for “.shanghai” then simply do like “DONUTS” in 2012! Go to ANY DONUTS application and look up the “mission” for the gTLD! Go to the “.bike” application, and try to find the word “bicycle”! NOT THERE! Or the word “bike”: NOT THERE! Instead it reads:

“DONUTS’ INTENTION FOR THIS TLD

As a senior government authority has recently said, “a successful applicant is entrusted with operating a critical piece of global Internet infrastructure.”  Donuts’ plan and intent is for this TLD to serve the international community by bringing new users online through opportunities for economic growth, increased productivity, the exchange of ideas and information and greater self-expression.”

Yap: you do not find the words bicycle or bike in the ENTIRE application (minus when the string is named of course: “.bike”).

If Donuts had applied for “.shanghai” instead e.g. “.bike”: they would have gotten that gTLD – no questions asked!

So back to Marita:
The biggest problem isn’t that somebody might want to “resell” the application (or applicant entity). It’s a problem that those who will do it “right” will enter into SIGNIFICANT work and business disadvantages – while others simply avoid the letter altogether! Both then end up in auction (because the letter of non-objection doesn’t create a priority); and guess who will then be financially stronger?

Thanks,

Alexander

From: GTLD-WG [mailto:gtld-wg-bounces at atlarge-lists.icann.org] On Behalf Of Marita Moll
Sent: Saturday, November 17, 2018 2:00 AM
To: CPWG <cpwg at icann.org>
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  <mailto:mmoll at ca.inter.net> <mmoll at ca.inter.net>

To: 

gnso-newgtld-wg-wt5 at icann.org <mailto: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 <mailto: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
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