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ICANN’s new gTLD fund at $352.3m

Kevin Murphy, November 2, 2012, Domain Policy

ICANN had $352.3 million in its new gTLD program bank account as of October 13, according to notes from a recent board meeting.

The numbers suggest that ICANN had only spent about $6 million on the program since the application window closed at the end of May.

With 1,930 applications at $186,000 a pop, excluding the seven refunds, ICANN should have grossed about $358 million.

The money is being held in a non-interest-bearing account, partly due to ICANN’s insistence that the program is not an exercise in self-enrichment.

Notes from the October 13 Board Finance Committee meeting also reveal that ICANN plans to revise its 2013 budget to account for the accelerated gTLD timetable.

The current budget was prepared before Digital Archery was scrapped and ICANN expected to process its applications in batches over two years. It now expects one batch lasting one year.

New gTLD winners will be decided by lottery after all

Kevin Murphy, October 11, 2012, Domain Policy

ICANN will use a lottery to decide the order in which to process new gTLD applications, after a surprising U-turn.

ICANN this morning published a proposal that would prioritize applications based on a $100-a-ticket prize draw that would run in early December.

The results of the draw would be used to sequence applications for Initial Evaluation and, if successful, contract negotiations, pre-delegation testing and eventual delegation.

ICANN says the draw would give it an exemption to California’s anti-lottery laws, which was the primary reason it has so far resisted chance-based solutions to the batching/sequencing problem.

It’s applied for a special “fundraising drawings” license based on its non-profit status, which it expects to be granted before the end of November.

The license appears to have certain restrictions that confuse matters for applicants — they won’t be able to buy their tickets over the internet.

They’ll have to pay, in-person, for a paper ticket. But ICANN says that it can supply proxies for applicants at no cost, eliminating the need to fly a representative to California.

The whole process will be manual, so there’s little risk of an embarrassing Digital Archery-style snafu.

Applications for internationalized domain names would be given priority.

The draw would be run at some point between December 4 and 15.

Under the proposal, the results of Initial Evaluation would start to be released from March next year, starting with IDNs, at a rate of about 150 per week.

ICANN has also decided to extend the period for official objections to March 13, 2013, two months more than the current plan, due to requests for more time from potential objectors.

But the extension is unlikely to appease these objectors, which will still have to file objections before they know whether applications have passed Initial Evaluation, wasting money.

New gTLD applicants that pass Initial Evaluation, are not in contention and have no objections will have the option to immediately sign the standard registry contract.

Applicants wishing to negotiate their contracts will be processed according to their draw number.

However, no contracts will be signed before the ICANN meeting in Beijing next April. This is because the Governmental Advisory Committee does not expect to issue its formal Advice on applications before then.

ICANN expects to sign contracts and do pre-delegation testing at a rate of about 20 per week, which is roughly within the maximum 1,000-per-year delegation rate it has committed to.

The effect of this is that the first new gTLDs are expected to go live in the DNS root in the second quarter of 2013, rather than the third quarter.

I believe most of the proposals will be welcomed by most applicants. A lottery was always the most favored solution.

There will be some criticisms, however.

There does not appear to be a method envisaged for swapping slots, for example, so portfolio applicants probably won’t get to choose which of their gTLDs is delegated first.

The whole proposal is open for public comment here.

New gTLD hopefuls set aggressive targets for ICANN

Kevin Murphy, August 22, 2012, Domain Registries

ICANN should start delegating new gTLDs in the first quarter of next year as previously planned and the Governmental Advisory Committee should work faster.

That’s according to many new gTLD applicants dropping their ideas into ICANN’s apparently semi-official comment box on application “metering” over the last week or so.

ICANN wanted to know how it should queue up applications for eventual delegation, in the wake of the death of batching and digital archery.

According to information released over the past couple of weeks, it currently plans to release the results of Initial Evaluation on all 1,924 still-active applications around June or July next year, leading to the first new gTLDs going live in perhaps August.

But that’s not good enough for many applicants. Having successfully killed off batching, their goal now is to compress the single remaining batch into as short a span as possible.

The New TLD Applicant Group, a new observer group recognized by ICANN’s Registry Stakeholder Group, submitted lengthy comments.

NTAG wants Initial Evaluation on all applications done by January 2013, and for ICANN to publish the results as they trickle in rather than in one batch at the end.

The suggested deadline is based on ICANN’s recent statement that its evaluators’ processing powers could eventually ramp up to 300 applications per month. NTAG said in its comments:

Notwithstanding ICANN’s statements to the contrary, there is not a consensus within the group that initial evaluation results should be held back until all evaluations are complete; in fact, many applicants believe that initial evaluation results should be released as they become available.

That view is not universally supported. Brand-centric consultancy Fairwinds and a couple of its clients submitted comments expressing support for the publication of all Initial Evaluation results at once.

January 2013 is an extremely aggressive deadline.

Under the batching-based schedule laid out in the Applicant Guidebook, 1,924 applications would take more like 20 months, not seven, to pass through Initial Evaluation.

NTAG could not find consensus on methods for sequencing applications among its members. Separate submissions from big portfolio applicants including Donuts, Uniregistry, TLDH and Google and smaller, single-bid applicants gave some ideas, however.

Donuts, for example, hasn’t given up on a game-based solution to the sequencing problem – including, really, Rock Paper Scissors – though it seems to favor a system based on timestamping.

The company is among a few to suggest that applications could be prioritized using the least-significant digits of the timestamp they received when they were submitted to ICANN.

An application filed at 15:01:01 would therefore beat an application submitted at 14:02:02, for example.

This idea has been out there for a while, though little discussed. I have to wonder if any applicants timed their submissions accordingly, just in case.

Comments submitted by TLDH, Google and others offer a selection of methods for sequencing bids which includes timestamping as well alphabetical sorting based on the hash value of the applications.

This proposal also supports a “bucketing” approach that would give more or less equal weight to five different types of application – brand, geographic, portfolio, etc.

Uniregistry, uniquely I think, reckons it’s time to get back to random selection, which ICANN abandoned due to California lottery laws. The company said in its comments:

Random selection of applications for review should not present legal issues now, after the application window has closed. While the window was still open, random selection for batches would have given applicants an incentive to file multiple redundant applications, withdrawing all but the application that placed earliest in the random queue and creating a kind of lottery for early slots. Now that no one can file an additional application, that lottery problem is gone.

Given that the comment was drafted by a California lawyer, I can’t help but wonder whether Uniregistry might be onto something.

Many applicants are also asking the GAC to pull its socks up and work on its objections faster.

The GAC currently thinks it can file its official GAC Advice on New gTLDs in about April next year, which doesn’t fit nicely with the January 2013 evaluation deadline some are now demanding.

ICANN should urge the GAC to hold a special inter-sessional meeting to square away its objections some time between Toronto in October and Beijing in April, some commenters say.

ICANN received dozens of responses to its call for comments, and this post only touches on a few themes. A more comprehensive review will be posted on DI PRO tomorrow.

Digital archery looked “silly” but had “minor risks”, ICANN board was told

Kevin Murphy, July 2, 2012, Domain Policy

While ICANN staff acknowledged that digital archery was perceived as “silly”, it told the board of directors that it was “straightforward” and “unambiguous and easy to execute”.

That’s according to the latest delayed release of meeting minutes and briefing documents detailing board-level discussions between the Costa Rica and Prague meetings.

There was significant debate at the board level about digital archery prior to its approval in March, with directors generally favoring an auction model instead, these documents reveal.

Digital archery as a method of batching new gTLD applications was approved by ICANN at the end of March. It was then suspended two weeks ago and finally killed off last Wednesday.

Back in March, the board of directors’ new gTLD program committee was presented with a strong case in favor of archery by ICANN staff.

According to March 28 briefing document (pdf):

Implementation of the auction model at this late date presents significant risk of: program delay, legal action and significant reputational impact as described below. Board working group members tend to agree with this viewpoint but there is a split of opinion. The digital archery model presents minor risks; primarily a minor reputational risk from the perceived awkwardness of the model.

Analysis indicates that the legal risk raised by a random selection program will be satisfactorily addressed. This is true even though the results appear to have an element of randomness.

Implementation of the digital archery model is essentially completed. It presents no schedule risk. Its operation is straightforward.

Hindsight is a wonderful thing, and it reveals in this case that digital archery was far from straightforward in its operation, and did in fact present schedule risk.

The new gTLD program is currently in semi-limbo while ICANN tries to figure out a way to sequence the processing of applications in a fair and timely way.

Other documents published following Prague include the lengthy minutes of a May 29 committee meeting at which directors argued with staff about how to geographically weight batches.

Staff pushed for a proportional system – where if 10% of applications came from a specific region, 10% of the first batch would be drawn from that region – the minutes reveal.

But several directors argued and won the case for the “round robin” scenario, which would have given advantage to applicants from under-represented regions instead.

Newly published minutes from May 6 also reveal that ICANN considered offering 1% interest on refunds to applicants that withdrew their applications before Reveal Day.

Digital archery is dead, but uncertainties remain

Kevin Murphy, June 28, 2012, Domain Policy

ICANN has killed off its unpopular “digital archery” scheme, which it had planned to use to rank and batch new top-level domain applications for evaluation.

But the organization has not yet replaced it with anything, leaving gTLD applicants without their much-sought-after certainty for at least the next three weeks.

In a resolution yesterday, ICANN’s New gTLD Program Committee approved the following resolution:

Resolved (2012.06.27.NG06), the New gTLD Program Committee directs the President and CEO to terminate the Digital Archery process as approved in Resolutions 2011.12.08.04-2011.12.08.07.

Given the discussions between the ICANN board and the rest of the community here at ICANN 44 in Prague this week, it would have been more surprising if archery had survived.

Not everyone is happy to see it go, of course.

Richard Schreier, CEO of erstwhile digital archery service provider Pool.com, took to the mic at the ICANN public forum this afternoon to ask that ICANN sticks to its decisions in future.

He further noted that the decision to scrap archery had been made without the input of applicants who are not in attendance at the meeting.

Now that archery has gone, the ICANN board has left a vacuum – nobody knows how applications will be prioritized for processing and evaluation.

Committee chair Cherine Chalaby said that ICANN will now open a comment period for all applicants, in order to help build a “roadmap” to “detail the next steps and timelines”.

This roadmap is due, it seems before the new gTLD committee’s next meeting, which is due to take place approximately three weeks from now.

This does not necessarily mean the program has been delayed, however. ICANN senior vice president Kurt Pritz said a few times this week that evaluators will start looking at apps July 12.