GTLD Auctions: Difference between revisions

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Cramton's original model proposed to run auctions during the first quarter of 2013, before ICANN announced the results of their Initial Evaluation. Such a model would allow losing bidders to receive 70% back from their ICANN application fee, but would pose difficulties if winning applicants later discovered their applications were rejected. Other applicants will have withdraw already, and the new gTLD would be left without an owner. The former model also lumped all TLDs that an individual applicant had applied for in one package. Criticisms stating that such a model would benefit larger companies led to a change, so that auctions will now proceed on a TLD-by-TLD basis, with all auctions being simultaneously resolved at the same time.<ref name="domainincite"></ref>

~~Proponents~~ of the private auction model ~~argue that it cheaper and quicker than~~ the ICANN model, which ~~should~~ be ~~used as~~ a ~~last resort~~.

Applicants also have to decide on when they wish to enter into private auctions. Those who withdraw their applications before ICANN posts its Initial Evalution results will receive a 70% refund of their $185,000 application fee; those who wait until after the IE stage will only receive a 35% refund.<ref name="worldipreview"></ref>

Benefits of the private auction model include the following:<ref name="circleid">[http://www.circleid.com/posts/20121203_gtld_contention_set_auctions_private_auction_alternatives/ gTLD Contention Set Auctions: Private Auction Alternatives], CircleID.com. Published 3 December 2012. Retrieved 6 December 2012.</ref>

* Elimination of ICANN Process Delays: Resolving contentions externally allows for more efficient application processing.

* Recovery of Funds: Non-winning bids receive a portion of the winning bid.

* Partial Application Fee: Those who not win their TLD may be eligible to receive a partial refund from ICANN, in addition to payouts from the winning bids.

Drawbacks of the private auction model include the following:<ref name="circleid"></ref>

* Jurisdiction: Enforcement of agreements across jurisdictions could be challenging, particularly if a participant fails to make good on its agreement.

* Funding: According to a CircleID article: "In the case where applicants have numerous strings in contention, a portion of the winning bid will be paid to non-winning applicants that can be used in subsequent auctions in which the winning bidder will be participating in. For example, if Company X is the winning bid for Auction A against Company Y and later, Company X and Company Y are in Auction B, Company Y now has additional funds received from Company X to use in Auction B."

* Participation: All parties within a contention set must agree and participate.

* Failure: If a bid is entered early and the winning bidder fails to pass ICANN's evaluation process, the string could go unclaimed.

[[Donuts]] co-founder [[Jon Nevett]] says that Donuts will handle as many of its contention sets as possible via this method, as auctions will be cheaper and faster for applicants than ICANN's original method. "The cost of losing an ICANN auction is greater than the cost of losing a private auction," Nevett said. "If you lose an ICANN auction you get nothing, zero, you lose your asset... [but with private auctions] it doesn't hurt as much to lose, so the theory is the second-place guys won't stretch as much."<ref name="domainincite"></ref>

Applicants also have to decide on when they wish to enter into private auctions. Those who withdraw their applications before ICANN posts its Initial Evalution results will receive a 70% refund of their $185,000 application fee; those who wait until after the IE stage will only receive a 35% refund.<ref name="worldipreview"></ref>

==References==

@@ Line 19: / Line 19: @@
 Cramton's original model proposed to run auctions during the first quarter of 2013, before ICANN announced the results of their Initial Evaluation. Such a model would allow losing bidders to receive 70% back from their ICANN application fee, but would pose difficulties if winning applicants later discovered their applications were rejected. Other applicants will have withdraw already, and the new gTLD would be left without an owner. The former model also lumped all TLDs that an individual applicant had applied for in one package. Criticisms stating that such a model would benefit larger companies led to a change, so that auctions will now proceed on a TLD-by-TLD basis, with all auctions being simultaneously resolved at the same time.<ref name="domainincite"></ref>
-Proponents of the private auction model argue that it cheaper and quicker than the ICANN model, which should be used as a last resort.
+Applicants also have to decide on when they wish to enter into private auctions. Those who withdraw their applications before ICANN posts its Initial Evalution results will receive a 70% refund of their $185,000 application fee; those who wait until after the IE stage will only receive a 35% refund.<ref name="worldipreview"></ref>
+Benefits of the private auction model include the following:<ref name="circleid">[http://www.circleid.com/posts/20121203_gtld_contention_set_auctions_private_auction_alternatives/ gTLD Contention Set Auctions: Private Auction Alternatives], CircleID.com. Published 3 December 2012. Retrieved 6 December 2012.</ref>
+* Elimination of ICANN Process Delays: Resolving contentions externally allows for more efficient application processing.
+* Recovery of Funds: Non-winning bids receive a portion of the winning bid.
+* Partial Application Fee: Those who not win their TLD may be eligible to receive a partial refund from ICANN, in addition to payouts from the winning bids.
+Drawbacks of the private auction model include the following:<ref name="circleid"></ref>
+* Jurisdiction: Enforcement of agreements across jurisdictions could be challenging, particularly if a participant fails to make good on its agreement.
+* Funding: According to a CircleID article: "In the case where applicants have numerous strings in contention, a portion of the winning bid will be paid to non-winning applicants that can be used in subsequent auctions in which the winning bidder will be participating in. For example, if Company X is the winning bid for Auction A against Company Y and later, Company X and Company Y are in Auction B, Company Y now has additional funds received from Company X to use in Auction B."
+* Participation: All parties within a contention set must agree and participate.
+* Failure: If a bid is entered early and the winning bidder fails to pass ICANN's evaluation process, the string could go unclaimed.
 [[Donuts]] co-founder [[Jon Nevett]] says that Donuts will handle as many of its contention sets as possible via this method, as auctions will be cheaper and faster for applicants than ICANN's original method. "The cost of losing an ICANN auction is greater than the cost of losing a private auction," Nevett said. "If you lose an ICANN auction you get nothing, zero, you lose your asset... [but with private auctions] it doesn't hurt as much to lose, so the theory is the second-place guys won't stretch as much."<ref name="domainincite"></ref>
-Applicants also have to decide on when they wish to enter into private auctions. Those who withdraw their applications before ICANN posts its Initial Evalution results will receive a 70% refund of their $185,000 application fee; those who wait until after the IE stage will only receive a 35% refund.<ref name="worldipreview"></ref>
 ==References==
 {{reflist}}