<div dir="ltr">Dear Kristy,<br><br>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. <br><br>I am responding in <b><u>my personal capacity</u></b>, having not had an opportunity to consult the ALAC/At-Large. For the same reason, the following remarks are made on <b><u>an interim basis</u></b> but are substantially in line with the newly issued <a href="https://atlarge.icann.org/en/advice_statements/13945" target="_blank">ALAC Advice on Contention Resolution</a> (see attached). By "interim basis" I mean that the ALAC might wish to subsequently put forward a different or modified proposal. <br><br>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. <br><br>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.<div><ol><li>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 <b>second-price sealed-bid auction method or what is known to many as the Vickrey auction</b>, with certain rules and procedural steps.</li><li><b>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 <u>every</u> gTLD string application submitted.</b> The rationale for this is found in the <a href="https://atlarge.icann.org/en/advice_statements/13945" target="_blank">ALAC Advice on Contention Resolution</a>.</li><li>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.</li><li>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.<br></li><li>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.</li><li>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.) </li><li>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. </li><li>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. </li><li>Applicants may at any time withdraw their sealed bids but are not allowed to change their sealed bids or put in fresh bids.</li><li>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. </li><li>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. </li><li>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. </li></ol></div><div><div>Now, skipping ahead to the Bid Credit / Multiplier itself</div></div><div><br></div><blockquote style="margin:0 0 0 40px;border:none;padding:0px"><div>13. Since applicants are limited to just the single sealed bid, the need for complicated calculations for a bid credit / multiplier can be avoided.</div><div>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, <b>it seems that the only role, if at all, of a target win rate is an aspirational one</b> (as suggested by Sam Lanfranco)<b> 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</b>.</div></blockquote><blockquote style="margin:0 0 0 40px;border:none;padding:0px"><div>15. ICANN sets the one fixed bid credit / multiplier for all ASP supported applicant bids <b>(this is where I see NERA's input as critical)</b> 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.</div><div>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.</div></blockquote><div> <br>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.<br><br><div><div dir="ltr" class="gmail_signature" data-smartmail="gmail_signature"><div dir="ltr"><font color="#000000">Kind regards,</font><br><font color="#000000">Justine</font><br><b><br></b></div></div></div><br></div></div><br><div class="gmail_quote"><div dir="ltr" class="gmail_attr">On Wed, 19 Jun 2024 at 06:48, Kristy Buckley <<a href="mailto:kristy.buckley@icann.org" target="_blank">kristy.buckley@icann.org</a>> wrote:<br></div><blockquote class="gmail_quote" style="margin:0px 0px 0px 0.8ex;border-left:1px solid rgb(204,204,204);padding-left:1ex"><div>
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<p><span id="m_-403991518529329740m_7018633720753244589m_5020396867278407191m_1996443771549381307m_-296056312744922278m_7194133742462578602docs-internal-guid-be0bc2b4-7fff-21d7-2ca6-ee09f89d8af3"></span></p>
<p dir="ltr" style="line-height:1.38;margin-top:0pt;margin-bottom:0pt"><span>Greetings
IRT members, </span></p>
<br>
<p dir="ltr" style="line-height:1.38;margin-top:0pt;margin-bottom:0pt"><span>It
was a pleasure meeting with you in Kigali. Thank you again for your inputs to the ASP bid credit discussion. </span></p>
<br>
<p dir="ltr" style="line-height:1.38;margin-top:0pt;margin-bottom:0pt"><span>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
</span><a href="https://community.icann.org/download/attachments/322994373/ASP%20Bid%20Credit_Multiplier%20for%20IRT.pdf?version=1&modificationDate=1718109969000&api=v2" style="text-decoration-line:none" id="m_-403991518529329740m_7018633720753244589m_5020396867278407191m_1996443771549381307m_-296056312744922278m_7194133742462578602LPlnk124868" target="_blank"><span></span></a><a href="https://community.icann.org/download/attachments/322994373/ASP%20Bid%20Credit_Multiplier%20for%20IRT.pdf?version=1&modificationDate=1718109969000&api=v2" target="_blank">IRT
Meeting #48</a><span>. 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. </span></p>
<br>
<p dir="ltr" style="line-height:1.38;margin-top:0pt;margin-bottom:0pt"><span>Please
send any additional questions or comments regarding the ASP bid credit on-list by
</span><span>20:00 UTC Friday, 21 June 2024.
</span><span style="font-size:11pt;font-family:Arial,sans-serif;background-color:transparent;font-variant-numeric:normal;font-variant-east-asian:normal;font-variant-alternates:normal">This will allow us to continue</span><span> moving
that work forward. </span></p>
<br>
<p dir="ltr" style="line-height:1.38;margin-top:0pt;margin-bottom:0pt"><span>Kind
Regards, </span></p>
<p dir="ltr" style="line-height:1.38;margin-top:0pt;margin-bottom:0pt"><span>Kristy
Buckley, on behalf of the ASP Project Team </span></p>
<div><span><br>
</span></div>
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<p></p>
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