Changes

In response to the need for private auction models to determine winners of contention sets for each [[new gTLD]], numerous companies have offered their own models in contrast to ICANN's private auctions, which were offered as a last resort. Cramton Associates was one of the companies offering private auction models, along with [[Sedo]] and [[Right Of The Dot]]. All three groups offered slight variations on implementation and services but shared commonalities in their proposed models. In all cases, the winner will pay the amount of the second-highest bid, and money will be split either equally or proportionally between the losers, so that all applicants receive a percentage of their initial investment back.<ref name="worldipreview">[http://www.worldipreview.com/newsstory.asp?ID=46 New gTLD applicants ponder private auctions], WorldIPreview.com. Published 14 November 2012. Retrieved 6 December 2012.</ref> All applicants must agree to participate in a private auction model in order for it to proceed; otherwise, the contention set will be managed via ICANN's auction system, in which all proceeds go to ICANN as "excess funds" that will be redistributed at a later date.<ref>[http://www.slate.com/articles/technology/future_tense/2012/11/icann_s_gtld_auction_proceeds_should_be_used_to_bring_mesh_technologies.html ICANN, Make a Difference], Slate.com. Published 27 November 2012. Retrieved 6 December 2012.</ref>

In response to the need for private auction models to determine winners of contention sets for each [[new gTLD]], numerous companies have offered their own models in contrast to ICANN's private auctions, which were offered as a last resort. Cramton Associates was one of the companies offering private auction models, along with [[Sedo]] and [[Right Of The Dot]]. All three groups offered slight variations on implementation and services but shared commonalities in their proposed models. In all cases, the winner will pay the amount of the second-highest bid, and money will be split either equally or proportionally between the losers, so that all applicants receive a percentage of their initial investment back.<ref name="worldipreview">[http://www.worldipreview.com/newsstory.asp?ID=46 New gTLD applicants ponder private auctions], WorldIPreview.com. Published 14 November 2012. Retrieved 6 December 2012.</ref> All applicants must agree to participate in a private auction model in order for it to proceed; otherwise, the contention set will be managed via ICANN's auction system, in which all proceeds go to ICANN as "excess funds" that will be redistributed at a later date.<ref>[http://www.slate.com/articles/technology/future_tense/2012/11/icann_s_gtld_auction_proceeds_should_be_used_to_bring_mesh_technologies.html ICANN, Make a Difference], Slate.com. Published 27 November 2012. Retrieved 6 December 2012.</ref>

During [[ICANN 45]] in Toronto, auction expert [[Peter Cramton]] of Cramton Associates outlined an "ascending clock" model, where a price is increased by the auctioneer at each stage; bidders and sellers can then either drop out or bid on the increased amount.<ref name="domainincite">[http://domainincite.com/10828-heres-how-donuts-wants-to-resolve-its-158-new-gtld-contention-fights Here's how Donuts wants to resolve its 158 new gTLD contention fights]. Domain Incite. Published 2012 October 23. Retrieved 2012 November 13.</ref> This model is also preferred by Right Of The Dot, who also proposed "sealed bid" and "live auction" models. In a sealed bid model, applicants securely send money via a courier and packages are stored in a safe place until they are opened at the auction session.<ref name="worldipreview"></ref>

During [[ICANN 45]] in Toronto, Peter Cramton outlined an "ascending clock" model, where a price is increased by the auctioneer at each stage; bidders and sellers can then either drop out or bid on the increased amount.<ref name="domainincite">[http://domainincite.com/10828-heres-how-donuts-wants-to-resolve-its-158-new-gtld-contention-fights Here's how Donuts wants to resolve its 158 new gTLD contention fights]. Domain Incite. Published 2012 October 23. Retrieved 2012 November 13.</ref> This model is also preferred by Right Of The Dot, who also proposed "sealed bid" and "live auction" models. In a sealed bid model, applicants securely send money via a courier and packages are stored in a safe place until they are opened at the auction session.<ref name="worldipreview"></ref>

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>

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>