ICANN backs auction of disputed domains

[WhoNet]

ICANN backs auction of disputed domains

OUT-LAW News / 18/08/2008

The body behind the internet's addressing systems has said that it will settle disputes over who wins the right to new generic top level domains (gTLDs) by auction.

ICANN (International Corporation for Assigned Names and Numbers) has said that auctions will be used if two organisations vying for the right to a gTLD are tied on other grounds.

ICANN announced earlier this summer that it would no longer limit the number of gTLDs to 21, and that almost any word or phrase could be registered as a domain.

The move has been condemned as a "nightmare" for brand owners because many will feel compelled to buy their brand's name at each of numerous new TLDs expected to appear.

ICANN's announcement that auctions will settle disputes over who will have the right to register words as domains is likely to be just as controversial.

The body announced in June that anyone can register any word as a TLD as long as it meets four conditions. "It must respect prior rights and marks, it mustn't be confusingly similar to any existing TLD, for example a .KOM would be too close to a .COM, if it represents a community, it must be with the full agreement of that community, and it must respect morality and public order," said ICANN chairman Peter Dengate Thrush at the time of the announcement.

If two applications are tied then ICANN has now said it would use an auction to determine who wins the right to own the domain.

"ICANN intends to use auctions in the new gTLD process as a tie-breaking mechanism, not the primary allocation mechanism, for the resolution of string contention among competing new gTLD applicants for identical or similar strings," said a consultation document discussing the move. "Auction would be the final means of settling any contention cases that have not been resolved at any of the previous stages in the process."

A report produced by consultancy Power Auctions said that a four year old paper produced by the Organisation for Economic Cooperation and Development (OECD) had backed auctions as the most efficient way to distribute domains.

"On balance the economic arguments favour the use of auctions in some form, where scarcity exists, in relation to the goals set by ICANN for allocation procedures," said that report. "They are particularly strong in relation to allocation decisions concerning to existing resources and where a ‘tie-breaker’ is needed during a comparative selection procedure for a new resource. In all cases, the best elements of comparative selection procedures could still be incorporated, at a prequalification stage for registries, using straightforward, transparent, and objective procedures that preserve the stability of the Internet."

In its report, Power Auctions argued that auctions help to attach the correct value to domains. "Auctions are well suited to accomplishing the goal of allocative efficiency: putting scarce resources into the hands of those who value them the most," said the report. "As such, the results of auctions tend to create greater social value than alternative allocation mechanisms."

In order to ensure fairness, the report also proposed a system of handicaps in favour of some kinds of applicants.

"Various devices can be considered for favoring disadvantaged bidders in an auction," it said. "For example, a 25% bidding credit could be offered to community-based bidders whose community is located primarily in least-developed countries: a $300,000 bid from such a bidder would be viewed as equivalent to a $400,000 bid from a wealthy country."

http://www.out-law.com/page-9356

 

[Ronald Regging]

Liberalization of extensions will be the end for domainers.

 

[h2o]

Liberalization of extensions will be the end for domainers.

Well, the end of one thing is the beginning another. It will be the beginning of major confusion of which TDL goes with which name for average users who are so used to .com. .net. .org.

 

[bmugford]

I disagree with this. COM/NET/ORG are the only extensions know by 95% of computer users. It has hard enough to brand a new extension (.Travel anyone?)

It will take more than just the extension, it will take massive money behind it.

There could also be possible lawsuits from premium domain holders that delay this. The only extension that I could really see being that effective is .SEX to start with.

Any obscure extension will face the same fate as the current ones.

Liberalization of extensions will be the end for domainers.

 

[Dean]

Most will be just another .travel apart from .xxx/.sex. Something like a .blog would have been good but I think .me can take that place since its shorter and more brandable.

 

[Ronald Regging]

Major corporations are already trying to pass legislation like The Snowe Bill because they're tired of having to reg all of these domains as defensive TM regs. How do you think they are going to react when there are 20x more extensions? ICANN doesn't realize the damage they're doing. The entire industry will change and not for the better.

 

[Kate]

Liberalization of extensions will be the end for domainers.

Past experiences are not too encouraging...
Now I could imagine that some domainers will invest in the new extensions if they are open... business as usual :gl: