ICANN is “sympathetic” to the view that private auctions between competing new gTLD applicants are a Bad Thing that should be discouraged in the next application round.
Director Alan Barrett told the GNSO Council at ICANN 79 today that the board of directors, following Governmental Advisory Committee advice, has hired a consultant and is looking at ways to design an ICANN-run “last resort” auction in a way that “disincentivizes” the use of private auctions.
In the 2012 round, many contention sets were settled with private auctions, with tens of millions of dollars changing hands. Losing auctions was a real money-spinner for several portfolio applicants. When ICANN conducted the auctions, ICANN got the money.
Last June, the GAC advised ICANN to “ban or strongly disincentivize private monetary means of resolution of contention sets, including private auctions”, and Barrett said ICANN is considering how to fulfill that advice.
“We don’t know the answers yet, but what I can say is that we are looking at it and we are sympathetic to the idea of disincentivizing private auctions,” Barrett said.
He added that ICANN is looking at how it might discourage competing applicants from settling their contention sets using joint ventures “in a bad faith kind of way”.
“There’s the risk that applicants might use a joint venture in a bad faith kind of way, as a way of transferring money from one applicant to another, in much the same way as private actions could have done,” he said. “We want to figure out a way of allowing good-faith joint ventures.”
My sense is that whatever ICANN comes up with will have to have a substantial carrot component, or an equally big stick. The domain industry can be incredibly devious at times, and if there’s a way to make a big chunk of change filing unsuccessful new gTLD applications, somebody will figure it out.
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