[Gnso-newgtld-wg] Auction of last resort and Private Resolutions

[Pruis, Elaine]

Hi,
The “auction of last resort” in 2012 was aptly named. Private resolution was encouraged. ICANN auctions were the very last possible remedy for contention sets. So it’s not surprising that 90% of contention sets were resolved privately. That was intentional.
Keeping the option for private resolutions is reasonable- it’s the gaming and buyouts we’ve been asked by the board to try to prevent.
If we want to avoid any of it, let’s do the Vickrey auction - put in a sealed bid with your application. Parties can try to make whatever deals they want after the TLD is delegated.  This eliminates horse trading or gaming or disadvantaging single applicants by paying portfolio applicants to lose.
Elaine


On Jun 26, 2020, at 11:32 AM, Aikman-Scalese, Anne <AAikman at lrrc.com> wrote:


Dear WG Members,
Re: private resolution of contention sets, I just wanted to mention again (as I did in chat on the last call) that apparently 90% of string contention sets were resolved before auction of last resort in the 2012 round.  (My source for this is the CCWG Auction Proceeds group so let me know if you disagree on this statistic.)  This means private resolution is by far “the rule” in resolving string contention.

It seems to me that promoting “joint ventures” of 2 or more applicants for the string will very easily result in “buy-outs” and “horse trading”.  An applicant who really wants to win will need only to structure a revised “change request” application in which (a) the other party becomes a “silent partner” or (b) is named a “key person” whose expertise is desirable  and who serves on the Board or the Advisory Board at a certain consulting fee.  The “silent partner” and/or Advisory Board member agrees in exchange to withdraw the competing application.  We should be thinking of ways to address this.  I had suggested the possibility of the “losing” applicant being required to pay a fee into an Applicant Support fund upon withdrawal of its application if it (or one of its principals) participates in the so-called “joint venture” revised application.

Separately, loose references to the organizational structure known as Joint Venture are probably ill-advised.  That form of corporate structure is rarely pursued in this day owing to the high degree of risk of liability taken on by each joint venturer for the acts or omissions of the other joint venturer(s).  Whatever we recommend as a matter of policy, it might be better to adopt some sort of neutral terminology such as “ revised business combination applicant” terminology.
Anne

Anne E. Aikman-Scalese

Of Counsel

520.629.4428 office

520.879.4725 fax

AAikman at lrrc.com<mailto:AAikman at lrrc.com>

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