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

Mon Jun 29 16:36:47 UTC 2020

Mike,

Respectfully,  I don’t agree that  trying to prevent flooding of the  next round with applications for TLDs that are never intended to be operated and are solely for the purpose of getting a payout in a private auction only benefits a few very vocal members of the WG.  That objective seems beneficial to the community generally from my perspective.

That said, I don’t agree with Ruben’s proposal and think that we need to be careful of creating limitations that might have unintended consequences including limiting innovation.  I think simpler mechanisms like a Vikrey auction will have better outcomes.

Best regards.

Marc H. Trachtenberg
Shareholder
Greenberg Traurig, LLP | 77 West Wacker Drive | Suite 3100 | Chicago, IL 60601
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From: Gnso-newgtld-wg [mailto:gnso-newgtld-wg-bounces at icann.org] On Behalf Of Mike Rodenbaugh
Sent: Monday, June 29, 2020 11:26 AM
To: Susan Payne <susan.payne at valideus.com>
Cc: gnso-newgtld-wg at icann.org
Subject: Re: [Gnso-newgtld-wg] Auction of last resort and Private Resolutions

*EXTERNAL TO GT*
I am in favor of more or less the status quo.  I don't think any real problem was proved in the last round, to support changing the rules this time.  It is better (more efficient, fast and fair) for everyone to play by the same rules we are accustomed to, rather than change them to benefit a few, very vocal members of this WG.

[Logo]

Mike Rodenbaugh

address:

548 Market Street, Box 55819

San Francisco, CA 94104

email:

mike at rodenbaugh.com<mailto:mike at rodenbaugh.com>

phone:

+1 (415) 738-8087

On Mon, Jun 29, 2020 at 9:07 AM Susan Payne <susan.payne at valideus.com<mailto:susan.payne at valideus.com>> wrote:
Also dissenting Elaine, as were many on the calls we have had.

Susan Payne
Head of Legal Policy
Valideus
D: +44 (0) 20 7421 8255
E: susan.payne at valideus.com<mailto:susan.payne at valideus.com>

From: Gnso-newgtld-wg <gnso-newgtld-wg-bounces at icann.org<mailto:gnso-newgtld-wg-bounces at icann.org>> On Behalf Of Rubens Kuhl
Sent: 29 June 2020 16:22
To: gnso-newgtld-wg at icann.org<mailto:gnso-newgtld-wg at icann.org>
Subject: Re: [Gnso-newgtld-wg] Auction of last resort and Private Resolutions

I agree with Paul's assessment on consensus level.

Which I believe it's unfortunate, and I would personally prefer stronger limitations on private resolutions, such as only allowing two brand TLDs to form a joint-venture (or other legal mechanism).

Rubens

On 29 Jun 2020, at 12:03, McGrady, Paul D. <PMcGrady at taftlaw.com<mailto:PMcGrady at taftlaw.com>> wrote:

There is no, and never has been, any consensus for banning private auctions.  As the last call made clear, there can be some guardrails around applications to make sure that they are not for the sole purpose of participating in private auctions and that the applicants have a bona fide interest in running the registry.

As for tweaking the auction of last resort (via Vickery or otherwise) that really is a separate topic.  Happy to discuss on the call.

Best,
Paul

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From: Gnso-newgtld-wg <gnso-newgtld-wg-bounces at icann.org<mailto:gnso-newgtld-wg-bounces at icann.org>> On Behalf Of Jim Prendergast
Sent: Monday, June 29, 2020 9:01 AM
To: Jean Guillon <jean at guillon.com<mailto:jean at guillon.com>>; Pruis, Elaine <epruis at verisign.com<mailto:epruis at verisign.com>>
Cc: gnso-newgtld-wg at icann.org<mailto:gnso-newgtld-wg at icann.org>
Subject: Re: [Gnso-newgtld-wg] Auction of last resort and Private Resolutions

After all is said and done - the Vickery auction is the most elegant solution.

It results in far fewer required evaluations, allowing greater refunds to more applicants.  If you are the 3rd or lower bidder for a string, you don’t have to pay of a useless evaluation of an application that will not proceed.
It eliminates possibility of collusion between applicants in contention sets and eliminates the concerns about what may or may not happen with JVs.
Treats every TLD as its own asset and doesn’t provide any advantage to large portfolio applicants over single string applicants.
It’s clean, fast and in almost every case, can be settled in weeks, not years.

Are there corner cases that will require an adjustment for community and other one off scenarios with objections?  Yes – but for 95+% of applicants in a contention set, it just works.

Unless of course you are in this process to make $$$ from losing auctions, whether to walk away or roll it into other auctions.  But making life easier or more efficient for those applicants is not the purpose of this program.

Fair and transparent distribution of critical internet infrastructure is.

We had really good discussions about this months ago, including a tweak from Donna on Vickery that seemed to have broad support, including from me.  I’m not sure how we are back at this again.

Jim Prendergast
The Galway Strategy Group
+1 202-285-3699

From: Gnso-newgtld-wg <gnso-newgtld-wg-bounces at icann.org<mailto:gnso-newgtld-wg-bounces at icann.org>> On Behalf Of Jean Guillon
Sent: Sunday, June 28, 2020 4:30 PM
To: Pruis, Elaine <epruis at verisign.com<mailto:epruis at verisign.com>>
Cc: gnso-newgtld-wg at icann.org<mailto:gnso-newgtld-wg at icann.org>
Subject: Re: [Gnso-newgtld-wg] Auction of last resort and Private Resolutions

I read things such as :"a “key person” whose expertise is desirable  and who serves on the Board or the Advisory Board at a certain consulting fee" and
"the possibility of the “losing” applicant being required to pay a fee into an Applicant Support fund upon withdrawal of its application"
These are good ideas but from an applicant perspective it complexifies greatly the application procedure.

I don't think that applicants should have to deal with more complex (and costly) procedures that only Icann insiders are able to explain.

The only thing missing in the next guidebook is a clear and simplified procedure for .BRANDs

The next AGB should be more simple, not more complex.

Jean Guillon

Le dim. 28 juin 2020 à 20:47, Pruis, Elaine via Gnso-newgtld-wg <gnso-newgtld-wg at icann.org<mailto:gnso-newgtld-wg at icann.org>> a écrit :
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<mailto: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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