[Gnso-newgtld-wg] Notes and Action Items - New gTLD Subsequent Procedures PDP WG - 18 July 2019

Fri Jul 19 12:45:50 UTC 2019

Dear Group,

Please let me emphasize my warnings about “abuse” (systematic abuse, unintended abuse, circumstantial abuse, etc) of the new gTLD program:

*        “Warehousing” (registering masses of generic terms and three-letter codes in  order to resale them later, etc)

*        Malicious “generic brand” gTLD “tasting”.  Strings like three-letter combinations (think cnn, fox, ibm), “twitter” or “facebook” etc: All generic terms – nothing the companies could do about: as long as the applicant makes clear that the TMs aren’t violated. INTA should pay more attention. The fact that nothing “bad” happened in 2012 is rooted in: A high application fee, and nobody knew about the new GTLD program. Now EVERYBODY knows, and with a low application fee: evil doers will FLOCK to the new round. Especially for generic brands with multiple buyers, like “.united” or “.orange” (both applied for already, I know).

*        “Hobby gTLD Registry Operators”! In 2012 we had things like “.ceo” or “.whoiswho” or “.rich”. These ideas went exactly nowhere. With a low “fee floor” all kinds of people will come up with all kinds of “ingenious ideas” – which falter and result in registry defaults. That would SIGNIFICANTLY damage the trust into new gTLDs AND the DNS in general!

*        Last not least the “.fuck”-class of gTLDs! “.hate”, “.fuck”, “.asshole”, “.die”, “.gotohell” and what not. If there is a sufficient financial entry barrier: only with a solid business plan the application makes sense (the registry need many registrants to recover the initial cost). At 25k USD application fee you need only about 5,000 US $20 registrations and you “make money”. Especially if you run 10 of such strings.

At the end of yesterday’s call somebody asked about “refunds” and “fee floor”. ESPECIALLY if the fee floor were anywhere below US $50,000 we CAN NOT continue to provide “refunds”. I personally do not see ANY justification for ANY “refunds”: Make a plan, apply, live with it. If we had a US $25k floor and an 80% refund (after the “reveal” and before the evaluation) we would essentially enable “gTLD Tasting” at a bargain amount of US $5k! Governments (GAC) and INTA (Brand Protectors) PAY ATTENTION. At 5k “risk capital” per shot anybody can raise money for 25 applications – and let 20 “drop”: losing only US $100k! Then sell 1 of the other 5 for US 250k (by now the applicant already makes profit) and have the remaining 4 applications “for free”. Example would be: go for 25 city names – WITHOUT expressing that the application would target the city (hence: no letter of support would be needed, unless it’s a capital and those are almost all gone anyways). If of these 25 just 5 “make it” (no contention): BINGO! Sell the applications to media companies in those cities. With a bit of luck you can even force a few of the other 20 applicants (that are in contention) to pay you a ransom for withdrawing your application (if there is only one competitor and directly after the reveal). The same is true for “generic brands” such as delta, united, orange, etc! INTA: you should fight gTLD tasting as if it would be the devil. It’s your worst enemy. 

Please DO NOT create incentives for gTLD “tasters”. If the application fee floor would be ludicrously low as US $50,000 then: NOT ONE CENT of refund of that amount. This program has no entrance barrier WHATSOEVER – as bare minimum we need a financial one. We give away the right to operate a critical part of the DNS infrastructure. For 25k you don’t even get a “used” three letter .com domain! Why should you get a complete gTLD for it? We will devaluate the DNS if we do so! 

If the concern is, that some applicant entities have no financial resources: then create a support program for them.

The best would be to freeze the program at the 2012 status quo: 185k application fees. “Cost Recovery” sounds “cool” – but imagine you would distribute all “Central Park” (Manhattan) at “cost recovery” (0.1 Cent to the Dollar of value): ALL HELL WOULD BREAK LOSE. See it this way:
“Cost” is not just the money it costs to facilitate the new gTLD Program. There are other “costs” involved, some of which can’t even be valued in Dollars. 

If we want “quality”: Quality comes at a cost. 

Thanks,

Alexander

From: Gnso-newgtld-wg [mailto:gnso-newgtld-wg-bounces at icann.org] On Behalf Of Julie Hedlund
Sent: Freitag, 19. Juli 2019 00:20
To: gnso-newgtld-wg at icann.org
Subject: [Gnso-newgtld-wg] Notes and Action Items - New gTLD Subsequent Procedures PDP WG - 18 July 2019

Dear Working Group members,

Please see below the notes from the meeting today, 18 July 2019. These high-level notes are designed to help WG members navigate through the content of the call and are not a substitute for the recording, transcript, or the chat, which will be posted at: https://community.icann.org/display/NGSPP/2019-07-18+New+gTLD+Subsequent+Procedures+PDP. 

Kind regards,

Julie

Julie Hedlund, Policy Director

Notes and Action Items:

Action Items:

>From 15 July 2019:

ACTION ITEM 1: Applicant Freedom of Expression - Input on Implementation Guidelines - LRO:  Work on language for the high-level agreement to reflect fairness and balance.

ACTION ITEM 2: Universal Acceptance: Rewrite the high-level agreement text.  Include a link to the USAG work.

>From 18 July 2019:

ACTION ITEM 3: On this comment: Concerns: ICANN org - ICANN org is not aware of any “75 steps” document and is unclear about what “documentation related to the process used in setting fee in the 2012 round is being referenced in this section. It would be helpful if the PDP Working Group could clarify.  ACTION: To the WG to clarify.

Notes:

1. Updates to Statements of Interest: No updates provided.

2. Review of summary document: (continued) – See: https://docs.google.com/document/d/11mtncTwPLPx6vpbunACToRZy1vWyls-MxVAb3wqEYsk/edit?usp=sharing

Overarching process comment: Call out when decisions on whether or not to accept/support new ideas will be taken well ahead of the meeting where decisions will be made.  Note that these are called out as actions below.

a. Application Fees:

Outstanding Items - New Ideas/Concerns/Divergence

-- INTA comments seem to be contradictory:  Maybe saying that the cost that ICANN is going to expend per TLD application should come from other sources thus driving the cost down and encouraging frivolous application.  There are ways that the price could be below cost recovery.  INTA doesn’t support it being unnecessarily expensive.  So, not really divergence with the cost recovery summary.  It is okay with cost recovery if it includes all of the costs.

Comments on the scope of what should be included for cost-recovery:

ACTION: Any support for the three new ideas?

Application fee floor:

-- Question: Thought the idea of the floor is that it is separate from the application fee -- it is used to determine what happens with any excess funds.  Answer: It’s not a component of the fee (as we worded it in the Initial Report).  Is that every application would cost a different amount.  ICANN has to determine the total cost of the program but can’t divide it to figure out how much each application would be.  

-- Recommendations don’t address how to control warehousing.  But this is not meant to define TLD warehousing as part of the rationale to not have it go to low.

-- On this comment: Concerns: ICANN org - ICANN org is not aware of any “75 steps” document and is unclear about what “documentation related to the process used in setting fee in the 2012 round is being referenced in this section. It would be helpful if the PDP Working Group could clarify.  ACTION: To the WG to clarify.

Disbursement of excess fees (with no price floor):

ACTION: Any support for these new ideas?  To the extent that they are inconsistent with the above recommendations in the high-level agreements no need to spend more time on them.  

Circumstances where revenue-cost neutral amount results in a refund that is greater than the application fee floor value:

-- NOTE: for accounting reasons it might be better to have refunds (if any) in the form of discounts/NOTE

Disbursement of excess fees (with an application fee floor):

ACTION: Is there support for any of these new ideas?

**Next call start with the timing of disbursement of excess funds, page 6**

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