[SubPro-IRT] Follow-up: ASP Bid Credit Options

Sat Jun 22 11:09:15 UTC 2024

RE: justine's blanket sealed-bid strategy just might have strong legs.

Such an ICANN Auction would only require a single US$ amount to be specified in a sealed bid, which is proposed to be submitted for every gTLD string application submitted.

It would reducing "gaming the process" options to almost zero.

Worth exploring.  It cuts the drama in the contention set resolution to zero, but then ICANN is not reality TV.

Sam L.

⁣Internet Elder, Internet Ecologist, 416 816-2852

On Jun 22, 2024, 1:51 a.m., at 1:51 a.m., Justine Chew <justine.chew.icann at gmail.com> wrote:
>Dear Kristy,
>
>Apologies for missing your timeline for input; I will preface by
>admitting
>that I am uncertain whether the following will allow you and your team
>to
>continue working on the ASP bid credit.
>
>I am responding in *my personal capacity*, having not had an
>opportunity to
>consult the ALAC/At-Large. For the same reason, the following remarks
>are
>made on *an interim basis* but are substantially in line with the newly
>issued ALAC Advice on Contention Resolution
><https://atlarge.icann.org/en/advice_statements/13945> (see attached).
>By
>"interim basis" I mean that the ALAC might wish to subsequently put
>forward
>a different or modified proposal.
>
>As mentioned during the SubPro IRT Call #48, I am of the opinion that
>the
>notion of a Bid Credit / Multiplier is intrinsically linked to that of
>auctions, in that one cannot conclusively discuss the Bid Credit /
>Multiplier without first understanding how the auction would work.
>
>After considering the elements to the 2 proposed mechanisms of A. Bid
>credit and B. Set-asides, I conclude that both are seemingly more
>complicated than what is needed. Let me pose the following as food for
>thought.
>
>  1. Referring to what was introduced in SubPro PDP Recommendation 35.4
>(albeit Rec 35.4 was not submitted by GNSO Council to the ICANN Board
>for
>   consideration) - the notion of ICANN Auctions (of Last Resort) being
> conducted using the *second-price sealed-bid auction method or what is
>known to many as the Vickrey auction*, with certain rules and
>procedural
>   steps.
> 2. *Such an ICANN Auction would only require a single US$ amount to be
>specified in a sealed bid, which is proposed to be submitted for every
>gTLD
>string application submitted.* The rationale for this is found in the
>ALAC
>   Advice on Contention Resolution
>   <https://atlarge.icann.org/en/advice_statements/13945>.
>   3. Submission of this sealed bid must be done as early as possible,
>preferably at the same time a string application is submitted but
>certainly
>   prior to any indication of possible contention sets being formed.
> 4. Any applicant that does not submit a sealed bid for its gTLD string
>application will be deemed to submit a bid of zero and will not be able
>to
>   participate in any ensuing ICANN Auction involving that gTLD string.
>5. Once the application submission period closes, the String Similarity
>  Evaluation for all applied-for strings must be completed prior to any
>application information being revealed to anyone other than the
>evaluators
>   and ICANN org.
>   6. After the end of the String Similarity Evaluation period,
>non-confidential information submitted by applicants in their
>applications
>   will be published (i.e., “Reveal Day”), including the composition of
>contention sets and the nature of the applications, (e.g.,
>community-based
>   applications, .Brand applications, etc.)
>   7. Concurrently, all applicants whose applications are identified as
>   being in contention sets will be informed of the number of other
>applications in their contention set and requested to place a deposit
>with
>ICANN Org. Deposits must be collected within a fixed amount of time
>after
>   Reveal Day.
>   8. The deposit collected would likely need to be a flat sum for all
>   participants in order to preserve the confidentiality of the amount
>  specified in each sealed bid. If the deposit payable by ASP supported
>   applicants is not "discounted" by the Bid Credit / Multiplier, then
>   it would have to be low enough to not become a barrier for those
>   applicants.
>   9. Applicants may at any time withdraw their sealed bids but are not
>   allowed to change their sealed bids or put in fresh bids.
> 10. There will be neither ascending-clock bidding nor ascending-amount
>bidding. Each ICANN Auction shall only entail the unsealing of sealed
>bids
>   of participating applicants.
>11. On the ICANN Auction date, the applicant that submitted the highest
>   sealed bid amount (inclusive of the Bid Credit / Multiplier for ASP
>   supported applicants) pays the second-highest bid amount.
>12. If an ASP supported applicant is determined to have won an auction,
>   it pays the second-highest bid amount discounted by the Bid Credit /
>   Multiplier. For eg, if the Bid Credit / Multiplier was X and an ASP
>   supported applicant placed a bid US$100k then its bid is effectively
>US$100k multiple by X, and if it won that auction where the
>second-highest
>   bid was US$90k, then it would pay US$90 divided by X.
>
>Now, skipping ahead to the Bid Credit / Multiplier itself
>
>13. Since applicants are limited to just the single sealed bid, the
>need
>for complicated calculations for a bid credit / multiplier can be
>avoided.
>14. A. Bid credit and B. Set-asides both rely on "a target win
>rate". However, it has been said that the use of such a target win rate
>to
>influence the outcome of ICANN Auctions is not provided for by
>consensus
>policy, so, *it seems that the only role, if at all, of a target win
>rate
>is an aspirational one* (as suggested by Sam Lanfranco)* just for
>purposes
>of establishing an actual FIXED bid credit / multiplier to be made
>available to all ASP supported applicants participating in an ICANN
>Auction*
>.
>
>15. ICANN sets the one fixed bid credit / multiplier for all ASP
>supported
>applicant bids *(this is where I see NERA's input as critical)* and the
>same fixed bid credit / multiplier is added to all ASP supported
>applicants’ auction bids as the means to increase their chances of
>prevailing at auction.
>16. The aspirational target win rate does not determine the outcome of
>how
>many supported applicants prevail in ICANN Auctions – that is dependent
>solely on whether an ASP supported applicant’s auction bid with the
>fixed
>bid credit / multiplier applied bests all other bids placed for that
>auction.
>
>
>I am sure there will be other considerations, but for now, I'm happy to
>discuss on any of the points above with you and other IRT colleagues,
>to
>the extent feasible.
>
>Kind regards,
>Justine
>
>
>
>On Wed, 19 Jun 2024 at 06:48, Kristy Buckley <kristy.buckley at icann.org>
>wrote:
>
>> Greetings IRT members,
>>
>> It was a pleasure meeting with you in Kigali. Thank you again for
>your
>> inputs to the ASP bid credit discussion.
>>
>> As a follow up from that conversation, there seemed to be interest in
>> exploring whether and how we could combine aspects of Options A and B
>from
>> the presentation during
>>
><https://community.icann.org/download/attachments/322994373/ASP%20Bid%20Credit_Multiplier%20for%20IRT.pdf?version=1&modificationDate=1718109969000&api=v2>IRT
>> Meeting #48
>>
><https://community.icann.org/download/attachments/322994373/ASP%20Bid%20Credit_Multiplier%20for%20IRT.pdf?version=1&modificationDate=1718109969000&api=v2>.
>> For those who expressed interest in that request, we would like to
>solicit
>> your feedback on what particular aspects you would like to look at
>> combining so that we can consult the auction experts on those ideas.
>>
>> Please send any additional questions or comments regarding the ASP
>bid
>> credit on-list by 20:00 UTC Friday, 21 June 2024. This will allow us
>to
>> continue moving that work forward.
>>
>> Kind Regards,
>>
>> Kristy Buckley, on behalf of the ASP Project Team
>>
>>
>>
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>
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