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051040040 New gTLD Subsequent Procedures Working Group call
Elaine Pruis
24:44
I love how cheery Terri is when introducing the call
Terri Agnew
24:51
Please review ICANN Expected Standards of Behavior here: https://www.icann.org/resources/pages/expected-standards-2016-06-28-en.
Jim Prendergast
26:52
Were we anticipating this document from the GAC? (I haven't had a chance to dive into it. have had my hand full trying to digest the new auctions proposal)
Katrin Ohlmer
28:19
@Jim: I think someone mentioned it last week.
Jim Prendergast
28:35
That's right - Jorge sent an email. Thanks
Paul McGrady
30:28
Helpful Jeff, thank you.
Cheryl Langdon-Orr
30:59
And the GAC did of course indicate that they were going to do their best to get us input in a 'side by side way to our topics at this stage of our deliberations this is a first (all be it detailed) go at this. for our use
Taylor Bentley
31:03
Jorge flagged it and it was mentioned in the communique
Taylor Bentley
31:49
+1 Cheryl. thanks
Paul McGrady
40:33
What was the harm? Was the harm ICANN didn't get the money? It got millions and is sitting on most of it (except for the part they raided to pay for the Obama spinoff.
Elaine Pruis
41:14
The harm is that single applicants got beat by portfolio applicants with money earned by losing other strings.
Jim Prendergast
42:12
I agree with Jeff - the focus on ICANN now is much different than it was prior to the 2012 round.
Donna Austin
42:50
not in all instances. one applicant could opt for auction of last resort and all money went to ICANN
christopher wilkinson
43:02
I think there should be a general absolute priority for single applicants.
Paul McGrady
45:01
I have seen no studies indicating that there will be more/less reputational harm by ICANN stockpiling even more millions of dollars in its auctions by banning private auctions.
Kathy Kleiman
45:52
Sorry to be late -- US Supreme Court's Booking.com oral argument just finished.
Paul McGrady
50:57
Draconian. Includes a Registry Death Penalty and Applicant Death Penalty..
Donna Austin, Neustar
53:25
We need to be careful not to scare off potential new entrants by making the rules complicated.
Donna Austin, Neustar
54:25
The resulting processes would be complicated.
Jim Prendergast
55:49
lost paul
Donna Austin, Neustar
56:00
I can hear Paul
Rubens Kuhl
56:01
I was hearing Paul
Jamie Baxter
56:08
i never lost Paul
Cheryl Langdon-Orr
56:19
neither did I
Jim Prendergast
57:26
may have been a Zoom phone audio issue as that's what I am dialed in on
Rubens Kuhl
57:39
The alternative to auction is the beauty pageant model, with all the issues that come with it.
Paul McGrady
58:46
What I "only" bid $100,000,000 which would just require a $10,000,000 deposit. I'd still win most/all of these.
Jim Prendergast
59:03
I don't think that's what is proposed. I think bids are sent once evals and contentions sets are done
Justine Chew
59:15
Hence auction ALWAYS favours deep-pocketed applicants.
Paul McGrady
59:37
@Donna, it means that an applicant new to ICANN would spend hundreds of thousands of dollars getting an application in only to be out bidded in a non-transparent process.
Alexander Schubert
59:52
Why wouldn't the big company win the TLD anyway? How would a live auction prevent that?
Rubens Kuhl
01:00:38
Jim, I understood it to resolve contention set first and do evaluation and objection only on the winner.
Rubens Kuhl
01:00:49
Differently from 2012.
Paul McGrady
01:01:48
Full bid amounts in deposit gets rid of small applicants entirely. Happy to speak to that if you like Jeff.
Donna Austin, Neustar
01:04:41
Option 1 is inherently unfair and biased towards those with a big 'slush fund'.
Donna Austin, Neustar
01:07:55
Agree with Paul.
Justine Chew
01:08:41
A reminder of the "multiplier" in bidding for applicants in need; this should not be lost.
Donna Austin, Neustar
01:10:03
@Justine, has a criteria been agreed for "applicants in need".
Paul McGrady
01:10:40
We need to solve the "giant guy always wins" problem, the "blind Brand" problem, and the Death Penalty problem.
Justine Chew
01:10:50
@Donna, applicants that have obtained Applicant Support has been suggested.
Donna Austin, Neustar
01:11:08
@Justine, perhaps it should be broader.
Elaine Pruis
01:11:12
Paul, does the proposal solve those if we change the penalty from death to $$
Justine Chew
01:11:19
@Donna, indeed!
Emily Barabas
01:12:37
The flow chart created by Jessica Hooper is available here: https://mm.icann.org/pipermail/gnso-newgtld-wg/attachments/20191205/f0f90133/SecondPriceSealedBidVickeryAuctionModel-ForSubProPDPDiscussion-0001.pdf
Emily Barabas
01:12:45
(as mentioned by Jeff)
Elaine Pruis
01:13:07
Yah the proposal allows for the most amount of info at bidding
Paul McGrady
01:13:15
@Elaine - depends on the $ amount. You can kill nearly any registry with a big enough monetary penalty.
Steve Chan
01:13:35
Correct
Paul McGrady
01:15:10
giant guy always wins
Justine Chew
01:18:04
@Paul I would have thought that's a good reason for applicants to not bid some ridiculous amount.
Alexander Schubert
01:18:32
Did smth like that that ever happened - applicants joining forces?
Paul McGrady
01:19:02
Were is the JV/creativity mentioned in this strawman?
Jim Prendergast
01:19:12
3 bullet in T&Cs
Julie Hedlund
01:19:23
@Paul: See bullet 1, sub-bullet 3
Paul McGrady
01:20:04
So creativity is in the warning section?
Paul McGrady
01:20:20
Yikes
Justine Chew
01:20:39
That's just formatting.
Paul McGrady
01:20:39
We need to build out an entire section on JV and other creative solutions
Elaine Pruis
01:21:11
@Paul, that’s what consultants are for ;)
martinsutton
01:22:24
I think the AGB includes and encourages creative ways to resolve contention prior to the auction of last resort.
Paul McGrady
01:22:30
@Elaine, I think we can buld it now- everything else is being built.
Kathy Kleiman
01:22:35
@Donna: that's a nice idea.
Cheryl Langdon-Orr
01:22:36
Interesting question @Donna
martinsutton
01:22:44
So we may not need to repeat again in the T&Cs warning..
Justine Chew
01:23:31
At-Large asked for consideration for an applicant which gets Applicant Support to get priority in a contention set.
Alan Greenberg
01:23:57
We are not getting that far with only rehashing the old conversations, so something new is good!
Rubens Kuhl
01:24:26
A business model analysis is pretty much a beauty pageant.
Phil Buckingham
01:25:25
we should severely limit the number of applications that any applicant can make .
Donna Austin, Neustar
01:25:36
I'm concerned that we're losing sight of the intent of the program, which is to increase competition and innovation. New entrants in a contention set might need a leg up.
Alan Greenberg
01:26:24
A multiplyer of the largest number of applications in the contention set divided by your number?
martinsutton
01:26:35
I recall there was concern during previous discussions regarding the business model analysis and that these would be subjective.
Alexander Schubert
01:27:06
Have we already discussed the option 2 (of 2)?
Justine Chew
01:27:51
@Jeff, promise? ;) just kidding
martinsutton
01:28:27
There were also discussions to help minimise contention sets whereby applicants could amend the string under strict circumstances
Donna Austin, Neustar
01:28:59
To Jeff's last point, we still need to find a solution to a situation where there is not a new entrant in the contention set.
Jamie Baxter
01:29:57
if emphasis is on innovation, then why not prioritize those applications in the contention set that show a clear path to innovation and not just standard operations
Cheryl Langdon-Orr
01:30:04
noted @Donna
Jim Prendergast
01:30:26
old hand sorry
Rubens Kuhl
01:30:42
Innovation can be good or bad, as the TLDs hit with TM-PDDRP have shown.
martinsutton
01:30:43
@Jamie - some may not want to reveal the extent of their innovations at that stage as it could, from a competitive standpoint
Justine Chew
01:31:13
@Martin, it's hard - one can't have it both ways.
martinsutton
01:31:43
@Justine - agree, that’s why discussions and ideas have been extensive
Justine Chew
01:32:03
@Martin, sure, we agree on that.
Rubens Kuhl
01:32:03
Actually, the financial evaluation as described in the draft report does not ask for a business model evaluation.
Kathy Kleiman
01:34:55
can see option 2?
Elaine Pruis
01:35:11
Pauls “blind brand” problem
Justine Chew
01:35:14
That would still exclude other forms of resolution.
christopher wilkinson
01:35:16
@ Rubens - Then it should.
Paul McGrady
01:35:20
Interesting idea Donna. Might help deal with the Blind Brand problem
Rubens Kuhl
01:35:22
In option 2, by the time a sealed bid is put in, you know how many applicants are there in the contention set.
christopher wilkinson
01:36:18
Blind brands - The TM holder would get some ro
christopher wilkinson
01:36:37
Priority by the evaluators
Kathy Kleiman
01:37:38
can we both options
Kathy Kleiman
01:37:52
can we see both options?
Annebeth Lange
01:38:08
Sorry to be late, hi everyone
Paul McGrady
01:38:50
@Donna, can you pull back the sealed bid at any time and revert back to 2012 Auction?
Kathy Kleiman
01:39:24
on the screen...
Kathy Kleiman
01:39:34
tx!!
martinsutton
01:39:50
Lost audio Jeff
martinsutton
01:39:56
Your back
Terri Agnew
01:39:58
Jeff’s audio is back
Jim Prendergast
01:40:09
My preference from day one has been for option 1 but in the spirit of compromise, I could get my head around option 2. Its not ideal for the reasons Donna point out.
Justine Chew
01:40:14
To clarify, with all the proposals, there isn't room for JVs and like? Or applicants in contention sets are expected to consider a JV with parties whose identity are withheld?
Rubens Kuhl
01:40:31
@Paul, I believe pulling back from the sealed bid would put the 2nd bid as winner, not to cause an auction of last resort.
Justine Chew
01:40:55
Option 2 does.
Elaine Pruis
01:40:56
So option 2 with Ts and Cs, for no private auction? Is that what Donna just suggested/
Paul McGrady
01:40:57
@Jeff, I don't think we are at the "live with" stage yet. We still need to build out JV/creative section first,
Donna Austin, Neustar
01:41:15
I cannot live with Option 1.
Paul McGrady
01:41:43
+1 Donna. Option 1 is no good. Option 2 might be, depending on how its fully built out.
Steve Chan
01:41:45
FYI, the allowance for joint ventures is actually discussed in greater detail in the Applicant Change Requests section.
Justine Chew
01:41:55
Option 2 with T&Cs and not private auctions sound good.
Justine Chew
01:43:12
@Steve, correct, then Option 1 is not a viable consideration, given the "developments" in the Application Change Request section.
Justine Chew
01:44:09
Without revealing applicant identifies
Justine Chew
01:44:16
*identities
Elaine Pruis
01:44:53
Ah ok, so less opportunity for “collusion"
Rubens Kuhl
01:47:12
Perhaps establishing a time limit for the bids ? Like they expire after a year and each one still interested in the string has to update the bid.
Jim Prendergast
01:47:58
seems like there is growing support for Option 2 with T&Cs and no private auctions so now we need to flesh it out some more.
Paul McGrady
01:48:26
We can at least work to try to perfect Option 2, but Option 1 seems like a non-starter. Option 1 just guarantees ICANN gets even more $ to sit on.
Justine Chew
01:49:40
Pull out
Donna Austin, Neustar
01:49:56
I don't think there's anything that would compel them to continue down a path.
Elaine Pruis
01:50:26
the new proposal is preferable to Option 2—you have more info at time of bidding, and profiteering is prohibited
Kathy Kleiman
01:50:33
+1 Jim
Anne Aikman-Scalese
01:51:49
So a party could be paid to withdraw. And parties can negotiate agreements as to who is withdrawing on which competing application, i.e. horse trading will work in some cases, right?
Elaine Pruis
01:51:51
ok, that works.
Phil Buckingham
01:51:58
so if there is a delay, material change of circumstances you have another sealed bid ?
Donna Austin, Neustar
01:52:31
we can scroll down to the new proposal
Donna Austin, Neustar
01:52:44
can we
Donna Austin, Neustar
01:52:53
thanks
Justine Chew
01:53:14
Sounds like we might be listing prohibitions?
Justine Chew
01:53:26
Or what is permissible?
Steve Chan
01:53:28
One of the issues raised with Option 2 is that the contention set composition may be impacted by String Confusion objections.
Justine Chew
01:54:42
Yes, @jeff
Alan Greenberg
01:54:44
We are past the 90 minutes... Perhaps ask for comments on the list.
Emily Barabas
01:54:57
this meeting is scheduled for 120 mins
Jeffrey Neuman
01:55:08
@Alan - we are scheduled for 120 mins today
Elaine Pruis
01:56:08
agree
Paul McGrady
01:56:16
@Jeff, thanks!
Alan Greenberg
01:56:21
Sorry, on my calendar the text said 120 but the meeting length was 90.
Donna Austin, Neustar
01:57:08
which option is Option 2? Your new proposal?
Kathy Kleiman
01:57:10
can't hear
Emily Barabas
01:57:17
Apologies if there was an error on the staff side, Alan
Steve Chan
01:57:18
Jeff, your audio is fading out
Cheryl Langdon-Orr
01:57:22
audio
Cheryl Langdon-Orr
01:57:26
is faded out
Terri Agnew
01:57:29
@Jeff, your audio is low. Can you move closer to the mic?
Cheryl Langdon-Orr
01:57:38
back
Terri Agnew
01:57:39
Audio seems to be back to normal
Anne Aikman-Scalese
01:58:37
I think that Donna has a good point.
Justine Chew
01:59:02
Option 2, timing of bid should precede reveal.
christopher wilkinson
01:59:21
Preferences:
christopher wilkinson
01:59:50
1. Full evaluation of all with pdriorities
christopher wilkinson
02:00:02
2. Option 2 as amemded
christopher wilkinson
02:00:15
3. Option 1 excluded.
Rubens Kuhl
02:00:23
Bidders should know the number of competitors, where there are community or geo applications in the set, and the name collision risk result.
Paul McGrady
02:00:43
@Donna - thanks. Lots to think about.
Jim Prendergast
02:00:45
but they wouldn't know the identities of the bidders?
Kathy Kleiman
02:01:12
Agree completely with Donna and Justine; timing should be before reveal.
Elaine Pruis
02:01:37
Unless applicants decide to go public with their applications
christopher wilkinson
02:02:17
Priorities should include Single applicants; ASP
Donna Austin, Neustar
02:02:24
What's the last problem?
Rubens Kuhl
02:02:31
Elaine, yes. There should be no non-disclosure obligations, but ICANN wouldn't be able to validate a claim from an applicant that an application was submitted.
Jim Prendergast
02:02:37
blind bids give smaller applicants a chance to win since they cant get snuffed out by portfolios or big platforms
Terri Agnew
02:02:42
Alexander Schubert has rejoined
christopher wilkinson
02:02:45
Communities, TM+Brand,
Jeffrey Neuman
02:03:02
If you have a string confusion objection and the contention set gets changed later where someone didn't have to submit a bid, but now has to
Rubens Kuhl
02:03:18
Or .niledelta community application.
Rubens Kuhl
02:04:53
I don't see that as a problem.
Phil Buckingham
02:05:28
last time shop & shopping
Rubens Kuhl
02:05:50
.kid and .kids too
Cheryl Langdon-Orr
02:06:26
Yes Thanks @Donna
Elaine Pruis
02:06:31
That’s a reasonable solution
Kathy Kleiman
02:06:52
makes sense
Rubens Kuhl
02:07:31
I believe this is option 1...
Donna Austin, Neustar
02:07:42
Because it's inherently unfair and biased towards those with a lot of resources.
Phil Buckingham
02:08:35
good idea , Alexander . do we actually need a reveal day ???
Rubens Kuhl
02:08:55
Not only portfolio applicants. Even a single-string applicant might bid differently knowing how many there are.
Sophie Hey
02:09:42
Alexander the problem with submitting a bid with the application is you are asking applicants (of all sizes) to disclose sensitive commercial information unnecessarily
Justine Chew
02:09:49
@Alex, how would that not disadvantage single applicants, applicants in need in forcing them to place a deposit for their bid?
Alan Greenberg
02:11:46
I agree that having to submit a (potentially very large) bid at application time is problematic.
Paul McGrady
02:12:01
How can you know what a string is worth? For a brand. it truly depends on whether or not there is a risk that a bad actor would end up with it. Option 1 is completely unhelpful. Option 2, modified, might be a path forward, depending on how it ends up.
Sophie Hey
02:12:44
+1 Paul
Rubens Kuhl
02:12:52
ASP might be financially-challenged, but that's not always the case of single-string applicants.
Rubens Kuhl
02:13:01
Some could be, some not.
Donna Austin, Neustar
02:13:45
that's true Rubens, but a single-string applicant will add competition to the pool of registries
Taylor Bentley
02:14:58
great idea, we definitely want that option
Taylor Bentley
02:15:30
getting all to withdraw is too steep a baseline for that option to be useful
martinsutton
02:15:42
Thx Jeff
martinsutton
02:16:34
Apologies, I have to drop early. Good discussions and ideas.
Taylor Bentley
02:16:35
interesting use cases, thx everyone
Anne Aikman-Scalese
02:17:08
I can think of a number of ways to include a bidder or bidders in an application "in name only" and essentially pay them to become "silent partners". How could we police that activity? Very commonly we can say that X key individual from the other party or parties are becoming Board members or Advisory Board members or whatever. Then you pay them but you are actually paying them to withdraw their application.
Justine Chew
02:19:30
Yes, @Donna, it's hard to properly consider this auctions topic without thinking about the ramifications of Application Change Requests.
Justine Chew
02:20:53
@Alexander, what you said still doesn't absolve applicants from the burden of having to "pre-arrange" deposit for bid.
Paul McGrady
02:20:56
If so, that is less horrible
Paul McGrady
02:21:28
@Jeff, will Staff capture our progress and resend around an updated strawman.
Donna Austin, Neustar
02:21:33
I agree with Paul: more work to be done here.
Rubens Kuhl
02:21:40
In the case of sealed bids there is no need for deposits.
Rubens Kuhl
02:22:09
If that applicant doesn't pay the full bid at contracting, the process restarts with the 2nd largest bid.
Katrin Ohlmer
02:22:54
+1 Alan
Donna Austin, Neustar
02:23:02
The ($185,000) application fee is the deposit.
Cheryl Langdon-Orr
02:23:09
Lots of great discussion today! But More work to be done on this large and often complex topic... Thanks everyone... Bye for now
Paul McGrady
02:23:11
Interesting Alan!!
Justine Chew
02:23:20
It is normal to take a deposit to participate in an auction
Cheryl Langdon-Orr
02:23:44
Is it?
Justine Chew
02:24:03
No pay, no play. :)
christopher wilkinson
02:24:21
What time on Thursday?
Kathy Kleiman
02:24:23
will you recirculate everything?
Cheryl Langdon-Orr
02:24:38
my auction experience is limited obviously
Rubens Kuhl
02:24:43
For an ascending auction it's usual to have deposit, but that's not the case for sealed bids.
Anne Aikman-Scalese
02:24:45
Justine and I both had suggested edits to Paul's proposal
Terri Agnew
02:25:17
New gTLD Subsequent Procedures Working Group call on Thursday, 07 May 2020 at 03:00 UTC for 90 minutes.
Kathy Kleiman
02:25:19
Great, tx!
Annebeth Lange
02:25:43
Bye