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Private auctions to be banned in next new gTLD round
ICANN plans to ban private auctions in the next new gTLD application round, chair Tripti Sinha has told governments.
The board of directors plans to accept the Governmental Advisory Committee’s recent advice to “prohibit the use of private auctions in resolving contention sets in the next round of New gTLDs”, Sinha told her GAC counterpart in a letter published this week.
This is a significant departure from the 2012 round, where many contention sets were resolved privately, with tens of millions of dollars changing hands. Simply applying for a gTLD, in order to lose an auction rather than actually running a registry, will quite possibly no longer be a business model.
What replaces private auctions is yet to be determined. ICANN plans to publish a paper and hold two community webinars in August to discuss alternatives, and reach a decision at its meeting in early September.
Sinha warned that if it cannot reach a conclusion by the September meeting, it might delay the publication of the Applicant Guidebook and thus the opening of the next application window.
It’s quite an aggressive deadline, given the complexity of the problem. ICANN is essentially trying to figure out a way to prevent unscrupulous actors from attempting to game the system for financial gain.
Ideas such as allowing good-faith joint ventures to be formed between competing applicants have been floated in recent months, but have faced scrutiny as they might permit side-deals to be inked that have the same effect as private auctions.
What seems certain is that “last resort” auctions — where ICANN gets all the money for its already $200 million war chest — will still be an option in the next round, which is current penciled in for the first half of 2026.
ICANN’s board plans to pass resolutions on the matter next Monday, so we should have a little more clarity by the start of August at the latest.
“Ideas such as allowing good-faith joint ventures to be formed between competing applicants…”
Because, sure, why not. After all, it’s not as if there are laws relevant to the topic of encouraging competitors to agree with each other. Surely a Versign/Afilias/PIR/Identity Digital/Centralnic joint agreement to run a few TLDs on a non-competitive basis will be just fine.
What could go wrong?
“Well, it looks like we all applied for the same TLD and ICANN is encouraging us to form a joint venture, because we can’t have an auction.”
“Okay, what are the terms of the joint ownership?”
“Well, we all start out with equal shares in the joint venture.”
“Can we exit the joint venture by selling our shares to the other owners?”
“Sure, why not.”
“But how do we set the price of any one joint owner’s shares if someone wants to exit?”
“Well, we do that with an auction of the shares of the joint venture among the existing share owners…”