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Terri Agnew's Personal Meeting Room - Shared screen with speaker view
Julie Bisland
32:29
elcome to the New gTLD Subsequent Procedures Working Group call on Thursday, 17 October 2019 at 20:00 UTC for 90 minutes.
Maxim Alzoba
33:05
hello all
Julie Bisland
33:27
Thank you, Kristine, noted!
julie.hedlund
34:45
We can get a link
julie.hedlund
34:57
We’ll need to find it first :-)
Cheryl Langdon-Orr
35:06
Should be in the usual GNSO COuncil page I aassumed
Julie Bisland
35:12
the presentation is posted on the GNSO Calendar: https://gnso.icann.org/en/group-activities/calendar#oct
Cheryl Langdon-Orr
35:19
but yes we can distribute to our list
julie.hedlund
35:21
thanks Julie B!
Steve Chan
36:00
And directly here: https://gnso.icann.org/sites/default/files/policy/2019/presentation/Pre-ICANN66%20GNSO%20EPDP%20slides_FINAL.en_.pdf
Julie Bisland
36:11
Here’s the PDF: https://gnso.icann.org/sites/default/files/policy/2019/presentation/Pre-ICANN66%20GNSO%20EPDP%20slides_FINAL.en_.pdf
Julie Bisland
36:56
well, or use Steve’s link :)
Steve Chan
37:18
Or Julie’s. Her link is certainly better than mine.
Paul McGrady
37:40
Council would need to play traffic cop, not this WG.
Jim Prendergast
37:43
that's a very important distinction - helpful
Cheryl Langdon-Orr
38:29
Exactly @Paul
julie.hedlund
39:46
The document on the screen is here: https://docs.google.com/document/d/15S_sUuP_gmKqba26tU9kYQ8mVF76W_3CSl4raxSgvm8/edit?usp=sharing,
Cheryl Langdon-Orr
44:40
I believe ALAC was silent on timing
Kristine Dorrain (Amazon Registry)
44:56
Mulitple ROs share Neustar's view.
Steve Chan
45:09
The blue text in the IPC comment was intended to identify the new idea part, since there was agreement and new idea.
Justine Chew
45:14
That is correct @Cheryl
Steve Chan
46:53
Hi Jeff, hand up.
Cheryl Langdon-Orr
47:16
Phew @Justine good to know I have not lost touch (as yet) ;-)
Donna Austin, Chair RySG
50:44
Good points from Kristine.
Steve Chan
51:33
Oops, I forgot about the timer! Jim, I’ll start using that for you.
Steve Chan
51:44
No offense :)
Donna Austin, Chair RySG
52:16
Jim, can you explain why that is the case?
Jeff Neuman (Com Laude)
52:30
@Jim - true. We should be calling it a sealed bid auction.
Jeff Neuman (Com Laude)
52:49
Vickrey is a specific type of sealed bid auction
Cheryl Langdon-Orr
53:02
Yes Thanks @Jim we will watch our nomenclature more carefully from now on
Kristine Dorrain (Amazon Registry)
53:21
helpful nomenclature, Jim
Justine Chew
54:01
Agreed Jim. That's why I said last meeting, bids must be put in without applicant identity in a contention set being revealed.
Cheryl Langdon-Orr
54:29
From a personal POV @Jim re your evaluation desirability and resource Mx POV I wholeheartedly agree with you
Justine Chew
57:24
Because we didn't consider the tiiming of bids, ALAC"s reference to and support for Vickrey auction is a qualified one (along with the multiplier).
Jim Prendergast
57:30
unless two parties submitted the same exact bid - there wouldn't be any contention sets. Highest bidder gets its at second highest bid.
Sarah Langstone
58:10
If I recall, didn't the independent auction expert that this group invited to talk to this group suggest that Vickery would be their recommendation?
Kristine Dorrain (Amazon Registry)
58:37
I thought I heard Jeff say the last resort auction would be after private mechanisms were exhausted, but perhaps I misunderstood.
Cheryl Langdon-Orr
58:59
Medical shorthand... Sorry Rx, Mx Cx etc.,
Paul McGrady
59:02
@Jim - except in cases where one of the bidders is a Community Based application that has to go through Community Evaluation.
Kristine Dorrain (Amazon Registry)
59:55
Thanks for clarifying.
Kathy Kleiman
01:00:06
What's the timing up for discussion now?
Kathy Kleiman
01:00:10
of submitting the bids?
Rubens Kuhl
01:00:56
A name being found to be a geo name would also trigger a similar situation to community priority.
Sophie Hey
01:01:09
On the timing of bids for sealed bid auctions. The willingness to pay for a string is confidential information. We shouldn't be expecting applicants to disclose that information unless it is necessary (ie to resolve a contention set)
Jim Prendergast
01:01:37
@ Paul - correct so you do CPE upfront (instead of waiting several months) and if CPE wins - its theirs. If not - its to the bids
Justine Chew
01:02:01
Agree with Jim
Kathy Kleiman
01:02:21
Data breaches?
Rubens Kuhl
01:02:51
The applicant could deposit an encrypted bid that requires a key that the applicant would only provide in the case of contention.
Sophie Hey
01:02:56
@Kathy not unprecedented
Justine Chew
01:03:31
@Martin, !! on data breaches, but even so, once a sealed bid in put in, it can't be changed.
Rubens Kuhl
01:03:32
This would make data breaches ineffective in revealing that information, but would assure that the bid being used in the auction was the one that was deposited.
Martin Sutton
01:04:28
@Kathy - there were data breaches relating to the application system in the last round. Hence, any process for sealed bids would need to be secure.
Justine Chew
01:04:42
On what happens if the "successful" applicant doesn't make good on their bid, then the next highest bidder gets the string?
Kristine Dorrain (Amazon Registry)
01:05:59
@Sophie, good point.
Cheryl Langdon-Orr
01:06:02
I assume so @Justine but again, this needs to be more fiully explored in Implementation if not the Recommendation(s) [if any] made on this matter
Cheryl Langdon-Orr
01:06:52
Points well made @Jim (again personal POV) that is part of the Predictability for all applicants etc., outcome I believe
Kristine Dorrain (Amazon Registry)
01:08:22
Jeff please read Sophie's comment.
Jim Prendergast
01:08:27
new hand
Donna Austin, Neustar
01:08:55
In ICANN's auction of last resort the applicants had to prove they had the funds to participate, how does that happen with sealed bids?
Kristine Dorrain (Amazon Registry)
01:09:12
@Cheryl, what if the idea received more funding such that you could increase your bid?
Jim Prendergast
01:09:39
@donna - I don't see why you couldn't build that in
Justine Chew
01:10:13
So long as withdrawal isn't predicated on receiving a financial benefit for the same.
Jeff Neuman (Com Laude)
01:10:20
@Donna - It did not ask you to prove you had the amount, it just asked you to put 10% of your maximum bid down (if I recall)
Cheryl Langdon-Orr
01:10:30
that is in the crystal ball gazing and length of a piece of string calculations that business often has to consider @Kristina, and Yes I am empathetic to these m atters
Donna Austin, Neustar
01:10:42
@Jeff, at least that was a commitment.
Kristine Dorrain (Amazon Registry)
01:10:51
@Alan, but you solve that with a sealed bid auction...why do applications need to PRE-EVALUATE their applications?
Jeff Neuman (Com Laude)
01:11:39
@Donna - that can be done in this process as well if that is what the group wants
Rubens Kuhl
01:12:57
Why I don't like people "leeching" the program, we shouldn't adopt anti-gaming rules that kill the patient, like what happened with Applicant Support. I happen to like the sealed bid idea and support its adoption, but getting the string its best chance of success is more important than anti-gaming.
Kristine Dorrain (Amazon Registry)
01:13:12
+1 rubens
Jim Prendergast
01:13:13
everyone could get to market faster. Don't have to wait fo 10 evealuations for 10 different .coin applications
Kathy Kleiman
01:13:55
Vickrey: "This type of auction is strategically similar to an English auction and gives bidders an incentive to bid their true value."
Kathy Kleiman
01:13:59
Makes sense to me.
Justine Chew
01:14:26
Yup, remember we have to get through all evaluations to establish whether there is a contention set to begin with.
Kristine Dorrain (Amazon Registry)
01:14:59
@Kathy, that's fine in a 1:1 scenario.
Kristine Dorrain (Amazon Registry)
01:15:19
I'm asking the group to consider that folks may have fallbacks and may prioritize applications differently over time.
Kristine Dorrain (Amazon Registry)
01:15:52
If I lose vickrey auctions 1 & 2, I really need to get #3 and I can no longer adjust to accommodate my new reality
Kristine Dorrain (Amazon Registry)
01:16:05
I could not have anticipated that
Jim Prendergast
01:17:31
Personal prediction - if we have another round where dozens of parties walk away with millions losing auctions, ICANN will start to get some serious external regulatory looks about how they are conducting this.
Martin Sutton
01:18:22
I think this is a great discussion and personally I am more comfortable with a sealed bid approach for last resort, just the timing issue needs more consideration.
Donna Austin, Neustar
01:18:44
I agree Martin.
Kristine Dorrain (Amazon Registry)
01:18:48
Q for you Jim: How many private auction winners have recouped their expenses do you think?
Kristine Dorrain (Amazon Registry)
01:19:15
That is, how much appetite are you anticipating for high-dollar private resolutions?
Jim Prendergast
01:19:43
I have no clue - no one but the parties participating know how much was spent to win strings.
Cheryl Langdon-Orr
01:19:59
It does seem though that we may be making some sort of Recommendation around sealed bid options however More to follow obviously... Excellent discussion Team, Thanks You
Jim Prendergast
01:20:00
But those that lost and walked away probably did pretty well
Donna Austin, Neustar
01:21:18
So a sealed bid is not the only way to overcome that situation, you could also raise the amount of the application.
Rubens Kuhl
01:24:21
Board comment is contradictory. They mention new procedures, but actually rise issues with the 2012 implementation.
Cheryl Langdon-Orr
01:25:42
Good observation @Rubens
Kathy Kleiman
01:26:05
Donna - are you suggesting we raise application fees to preserve private auctions?
Rubens Kuhl
01:29:10
.apple: https://www.iana.org/domains/root/db/apple.html
Justine Chew
01:29:20
@Alexander, technically brand owners can file Legal Rights objections.
Alexander Schubert
01:30:29
Apple can file stuff all day long; nobody cares if I want. apple to sell fruits.
Kathy Kleiman
01:31:14
I thought we are planning fees on a cost-recovery basis.
Kristine Dorrain (Amazon Registry)
01:31:22
I'm sorry all, this is super important but I have to jump for another meeting.
Paul McGrady
01:31:31
Is whether or not making money on private auctions is good or bad ever been put to the community? Or are we dealing here with a presumed orthodoxy?
Alexander Schubert
01:31:32
Cost recovery basis is a bad idea
Kristine Dorrain (Amazon Registry)
01:31:46
+1Paul
Rubens Kuhl
01:32:00
Cost-recovery is both this WG consensus and 2012 implementation, so it's here to stay.
Kathy Kleiman
01:32:33
@Staff: could you kindly repost the link to the full doc on screen? Tx!
Steve Chan
01:32:47
@Kathy, sure: https://docs.google.com/document/d/15S_sUuP_gmKqba26tU9kYQ8mVF76W_3CSl4raxSgvm8/edit#
Alexander Schubert
01:32:57
Paul: we are trying to improve the way the INTERNET USER is navigating the Internet - NOT to enrich vulture capitalists.
Jim Prendergast
01:33:18
@Paul - I don't think the question was ever asked so it's a good question to put to the community in the next comment period.
Sarah Langstone
01:33:23
Not sure if I misheard the conversation, but I just wanted to point out that application fees and sealed bids are separate; the application fee is the application fee - and in addition to paying the application fee, an applicant would include a "sealed bid amount" in the application itself which would only come into play if the applicant finds themselves in a contention set
Donna Austin, Neustar
01:33:26
@Paul, and has anyone done an analysis of the extent to which applicants really profitted from the program.
Rubens Kuhl
01:34:16
Paul, in general $ paid in private auctions made less $ available to marketing.
Cheryl Langdon-Orr
01:34:55
Soory been dropping in and out of Zoom with Unstable Internet recently
Jim Prendergast
01:35:19
@Donna - if you though getting the providers to talk about auctions was tough - try getting the auction participants to disclose. I'm pretty sure there are NDAs galore on that but I would welcome such a study. might be insightful.
Kathy Kleiman
01:39:36
Who opposes private financial resolution or has concerns?GACICANN Board has “concerns”Some RySGNCSGALAC.in(from document on screen)
Alexander Schubert
01:40:24
Good consideration.
Rubens Kuhl
01:41:33
Kathy, the dilemma is that some forms of private resolution are seen as good (like two applicants forming a JV) while others are seen as bad (like private auctions), but private resolution encompass them all.
Justine Chew
01:41:51
@Martin, your point would still require a ban on private auction resolution to begin with.
Kathy Kleiman
01:42:38
@Rubens: "private financial resolution" seems to be synonym for private auctions.
Rubens Kuhl
01:43:17
Kathy, it's. But private resolutions come in many flavours, some with money, some without.
Jeff Neuman (Com Laude)
01:43:33
@Sarah - yes, the Vickrey Auction would eliminate essentially the last resort
Justine Chew
01:44:24
Just restating the "problem": how do we deal with applicants who have no intention of running a TLD but are just speculating for financial gain.
Martin Sutton
01:44:41
@Justine - it would not ban private auctions if sealed bids only took place as a last resort (i.e. not Vickrey)
Martin Sutton
01:45:03
so it goes back to timing of sealed bids
Kathy Kleiman
01:45:24
@Rubens: my guess is there is nothing ICANN can do to stop two companies from merging, e.g., two Fortune 500 companies (whether they have competing applications or not)
Justine Chew
01:45:34
@Martin, I am suggesting we should!
Jim Prendergast
01:45:38
its only Vickery if its submitted at application
Paul McGrady
01:46:42
My brain hurts...
Alexander Schubert
01:47:07
Paul: Probably day and night.
Paul McGrady
01:47:48
@Alexander - ha! lol
Martin Sutton
01:48:07
@Paul I will see you “brain hurts” and raise you with a migraine
Paul McGrady
01:48:40
@Martin - I fold
Rubens Kuhl
01:49:33
Would they know if one of the other applicants is a billion dollar company ?
Justine Chew
01:49:39
@Martin, I raise you with "pulling hair out"
Jeff Neuman (Com Laude)
01:49:51
ALL - have you seen my hair recently :)
Jim Prendergast
01:50:24
the problem with that scenario is it allows for collusion between applicants. You bid high on this one and Ill bid high on another. Collusive private auctions could be very problematic in the eyes of competition authorities.
Cheryl Langdon-Orr
01:50:40
I too will appear older (not wiser) and greyer at ICANN 66 ;-)
Alexander Schubert
01:50:56
My notion again: If ICANN uses a Vickery auction then why not notifying the highest bidder ASAP (without reveiling how much they have to pay / aka the 2nd bid amount) - then that applicant might see an incentive to NOT enter into private contention resolution (aka private auction); but going with the Vickery auction of ICANN.
Kathy Kleiman
01:51:50
Huh, Jeff?
Rubens Kuhl
01:51:58
Alexander, matching that idea with partial contention sets could be challenging.
Donna Austin, Neustar
01:52:03
With the Vickery model, doesn't the money go to ICANN?
Jim Prendergast
01:52:09
I have zero confidence in that preventin it
Cheryl Langdon-Orr
01:52:13
There are no doubt Implementation aspects we can explore if we go down this pathway of course... But identification of concerns and risks needs to come first
Kathy Kleiman
01:54:28
Could Donna repeat this idea?
Anne Aikman-Scalese
01:55:08
It seems a constructive suggestion by Donna since identity of other applicants would not be known - the only thing known is "You are in a contention set - submit your sealed bid."
Justine Chew
01:55:17
Requirement to put in a sealed bid is subject to establishment of a contention set, and identity of applicants still not revealed.
Justine Chew
01:56:52
I'm just not sure where and when "private resolution" (minus private auction) features in this.
Kurt Pritz
01:57:38
I think vickrey auctions would be very daunting and discouraging to newcomers to this area. (Here is an asset that costs $100,000 but how many millions are you willing to pay?) I think (as a policy) these are the types of participants we are trying to attract. To make sealed bids palatable, the bidding should take place close to the award when the value of the asset can be evaluated.
Jim Prendergast
01:58:20
.ping
Rubens Kuhl
01:58:32
.pong
Anne Aikman-Scalese
01:58:40
LRO would be after Reveal day
Donna Austin, Neustar
01:58:44
@Paul, those things would need to be worked out.
Martin Sutton
01:58:55
Good point Paul
Alexander Schubert
01:59:10
Good point Paul
Cheryl Langdon-Orr
01:59:49
Seems however like we are needing to continue to explore this matter and that we may then find a recommendation worthy of general support if we do
Jim Prendergast
02:00:54
we need to talk about this - this topic is too detailed and our email conversations are not working - you said so this morning to GNSO.
Julie Bisland
02:01:34
NEXT CALL: Tuesday, 22 October 2019 at 03:00 UTC for 90 minutes
Anne Aikman-Scalese
02:01:40
@Paul - If you win the LRO after the reveal, then the party or parties who lost should get knocked out of contention. And you don't pay bid if they are all gone.
Robin Gross
02:01:58
Thanks, all, bye!
Donna Austin, Neustar
02:02:06
agree Anne
Cheryl Langdon-Orr
02:02:07
Excellent discussion today... Thanks everyone, appreciate you efforts in all this, Much more to follow obviously, do continue in the mailing list, and Bye for now...
Alexander Schubert
02:02:07
Bye