The displacement of ICANN gTLD auctions by Private Auctions
On the NCSG Policy meeting conference call today (Tuesday
14th April) I wrote in the Chat room that in any new (future) gTLD
round the
likelihood of ICANN gTLD string auctions is zero, and hence that
there will be no new
auction proceeds to be allocated for efforts like helping developing
and
under serviced areas of the globe. I was asked for background for
that assessment. Here is some
background and here are some links.
All of the approved contenders (the contention set) for a gTLD are
fully known to
each other and it is in their self-interest to sort out who actually
is awarded
the new gTLD string, without having to resort to an ICANN auction.
Initially,
when they could not sort it out the ICANN process held an auction
with the
winner (as per the terms of the auction) got the new gTLD string.
ICANN got the
net auction proceeds. There has been long discussion within the
ICANN community
with regard to how those auction proceeds might be used.
It did not take much thought for the private sector, auction
experts, and the contenders for the new gTLD strings to come up with
a better (more
self-serving) solution when negotiation, consensus, side payments,
and/or
whatever failed to narrow down the applicant list to one contender. [Note: This is not about the
situation
where an ICANN awarded gTLD is subsequently put up for auction.]
Rather than triggering an ICANN auction, the contenders
resort to a private auction among themselves. All contenders have to
agree, but
the benefits of agreeing are considerable. There is a private
auction (no public
disclosure) where the wining bid (as per the terms of the auction)
is divided
up among the losers (if losers is the right term in such a
scenario). Considerable sums
are involved, all is
perfectly legal. No auction proceeds go to ICANN, hence, under this
scenario, there will be no new proceeds to ICANN from any subsequent
new gTLD
round.