ICANN's Governmental Advisory Committee (GAC) has issued a formal recommendation to the ICANN Board regarding private auctions of applicants for the next round of New gTLD Program. Domain Incite draws attention to the fact that the GAC's rhetoric has changed in the direction of tightening. If a year ago the Government Advisory Committee advocated “ban or strongly disincentivize” applicants for new domains to participate in such auctions, now we are talking about a complete ban on them.
It is perhaps worth recalling that in 2012, during the first round of the new domain program, the fate of the majority of applications for domains that were claimed by several candidates was decided through private auctions of applicants. Their mechanism assumed that the amount announced by the winning bidder was distributed among the losing participants. This approach gave rise to several problems at once. First, private auctions, which often involved millions of dollars in bids, dramatically reduced the chances of non-profit organizations or companies from developing countries gaining control of the domain they were interested in. Secondly, some applicants used such auctions to enrich themselves: they submitted applications for domains that they knew were not interesting, simply in order to lose the auction and receive a large sum. And thirdly, these issues have generated criticism from the community and could have a negative impact on the reputation of ICANN itself.
All of this was discussed at a joint meeting of the GAC and the At-Large Advisory Committee (ALAC) during the recently concluded ICANN 80 meeting in the capital of Rwanda, Kigali. ALAC Chairman Jonathon Zack, in particular, called the first phase of the new domains program a “millionaire's game.” It is likely that this joint meeting influenced the GAC to tighten its rhetoric regarding private bidder auctions.
However, the ICANN Board also has a negative attitude towards such auctions and would prefer that in controversial cases the fate of domains be decided at auctions held by ICANN itself (if only because in such auctions all the money goes into the budget of the corporation itself). But for now, the corporation’s management is still inclined to the formulation “ban or strongly disincentivize.” Such a possible measure could be the need to pay a certain amount for participation in private auctions - large enough to deprive these auctions of financial attractiveness in the eyes of the losers.
