ICANN to Auction New Generic Top Level Domains

By Patrick Vande Walle
Patrick Vande Walle

ICANN has just published a paper from its contractor PowerAuctions LLC, regarding the use of auctions to award new Top Level Domains (TLD) strings in case of contention.

I can understand what ICANN wants to avoid. In the past, it has been criticized for using the "beauty contest" model with the redelegation of the .net TLD. It was finally "redelegated" to its incumbent operator, although it was obvious to many industry observers that other bidders were as good, if not better on several points. There was a large part of subjectivity in the decision, simply because beauty criteria are a very personal matter.

However, the auction model is based on the idea that whoever wins the auction will be able to recoup its investment on the sale of domain name, and that the goal of the gTLD operator is to sell as many names as possible. It also promotes a capitalistic model, where only those with the most money will be granted generic strings, regardless of other considerations. There is no room for gTLDs wishing to remain purposely small.

It is not clear yet if the auction model will be the only one used by ICANN for all new gTLDs. It would be unfortunate if it were, because there are different TLD models and communities. Not all potential gTLD operators are looking to "get rich quick". Some may even care about the community they wish to serve, and actually put societal values before profits. How naive they are. What will matter is not how you are going to serve your community, but how much you are willing to pay ICANN for it.

By announcing it will go to an auction model, ICANN is actually creating potential for contention. After all ,it may be a wise investment decision for wealthy copycats to simply watch what early proposers of new gTLD strings are doing and how much support they proposal gets. Those early proposers have spent a lot of time and money over the last two years in participating in ICANN processes to launch this new TLD round. They have done all the dirty work. In the meantime, copycats have been silently watching. Once the auction opens, early proposers will have burnt all their cash and will not be able to compete with the copycats.

Advice to those early proposers: keep some cash to pay your lawyer's fees and get some undisputable proof you came up with the idea first. There's going to be blood, sweat and tears. Those who are going to steal your idea will hold no quarter.

A public forum has been established. Comments should be submitted to auction-consultation@ICANN.org

By Patrick Vande Walle, All around Internet governance troublemaker. Visit the blog maintained by Patrick Vande Walle here.

Related topics: Domain Names, ICANN, Registry Services, New TLDs

Comments

Additional news from ICANN ... Patrick Vande Walle  –  Aug 11, 2008 4:39 AM PDT

On another blog, an ICANN employee commented that : "individual review and comparative evaluation will still play a key role in the new gTLD process. The paper should have made clear that auctions are being considered as a tie-breaking mechanism, not the primary allocation mechanism. A community-based applicant may also elect to comparative evaluation. We will have more information out on this as part of the drat RFP.

This looks indeed slightly better.

"Clear Winner" Stuart Lawley  –  Aug 11, 2008 11:51 AM PDT

Patrick,
My understanding is that auction will be used if the process of comparative evaluation does not produce a "clear winner". With the potential for lawsuits against ICANN for declaring a party a "clear winner", my guess is most of the contentious applications may well end up going to auction.