English beats Portuguese in $2.2m .hotels auction

Booking.com has won the right to operate .hotels after an auction concluded a protracted fight over the gTLD.
In an ICANN-run auction yesterday, Booking.com prevailed with a winning bid of $2.2 million.
Its sole competitors was Travel Reservations (formerly Despegar Online), which had applied for the Portuguese word .hoteis.
In 2012, a String Similarity Review panel concluded that .hotels and .hoteis look too similar to coexist, due to the likelihood of confusion between I and l in sans-serif fonts.
Neither applicant agreed with that decision, knowing that it would result in a expensive auction, and Booking.com filed a Request for Reconsideration and then, in March 2013, an Independent Review Process complaint.
After two years, it lost the IRP. But the panel said it had “legitimate concerns” about the fairness of the SSR process and ordered ICANN to pay half of its costs.
Now, Booking.com has had to fork out another $2.2 million for the string.
That’s not particularly expensive as ICANN-auctioned gTLDs go. Eight of the 13 other strings ICANN has auctioned have sold for more.
ICANN’s auction proceeds to date now stands at $63,489,127, which is being held in a separate bank account for purposes yet to be determined.

Booking.com uses .africa precedent to challenge .hotels ruling

Booking.com has become the first new gTLD applicant to publicly cite the recent .africa Independent Review Process ruling in an attempt to overturn an adverse ICANN decision.
The challenge relates to the decision by ICANN, under the rules of the new gTLD program, to place applications for .hotels and .hoteis into a contention set due to their potential for visual confusion.
The two strings are heading to auction, where the winner will likely have to fork out millions.
In a missive to ICANN (pdf) last week, Booking.com outside attorney Flip Petillion said that the .africa IRP ruling shows that ICANN has to revisit its decision-making over .hotels.
The letter highlights a wider issue — how can ICANN follow community-established rules whilst sticking to its rather less well-defined Bylaws commitment to be “fair”?
Petillion wrote:

ICANN — and the BGC — has maintained the position 1) that the fact the process established by ICANN was followed is sufficient reason to reject that challenge and 2) that the fact that the process allowed neither for Booking.com to be heard nor for a review of the decision by the ICANN Board is of no relevance.
In the interim, IRP panels have confirmed that this process-focussed position is unsustainable. The ICANN Board has an overriding responsibility for making fair, reasoned and non-discriminatory decisions under conditions of full transparency.

He cites the .africa IRP decision to support this assertion.
Booking.com is the applicant for .hotels, while a different company, Travel Reservations (formerly Despegar Online), has applied for .hoteis, the Portuguese translation.
While both applicants are happy for the two gTLDs to co-exist on the internet, ICANN’s third-party String Similarity Review panel, part of the new gTLD evaluation process, ruled that they cannot.
They’re just too similar — in standard browser sans-serif fonts they can be indistinguishable — and would likely lead to user confusion, the panel decided in February 2013.
Booking.com challenged this decision with a Request for Reconsideration, which was dismissed.
It then filed an IRP, but that concluded this March with the panel awarding a grudging win to ICANN, which it orders should split the costs of the case.
In April, the ICANN board adopted the IRP panel’s findings, saying that the two applicants should remain in the contention set.
Booking.com, along with Travel Reservations, filed a second RfR, challenging the board’s decision, but this was rejected by ICANN’s Board Governance Committee in June.
The ICANN board has not yet formally adopted the BGC’s recommendations — I expect it to consider them at its next scheduled meeting, July 28 — hence Booking.com’s last-ditch attempt to get ICANN to change its mind.
Petillion wrote:

Simply following the processes and procedures developed by ICANN cannot alone be sufficient grounds for declining to review a decision. If the requirements of fairness, reasoned decision making, non-discrimination and transparency have not been met in the implementation of the process and procedures, the ICANN Board must, when invited to, conduct a meaningful review.

In the .africa case, the IRP panel ruled that ICANN should have asked the Governmental Advisory Committee for its rationale for objecting to DotConnectAfrica’s .africa bid, even though there’s nothing in the new gTLD rules or ICANN Bylaws specifically requiring it to do so.
However, in the Booking.com case, the IRP panel raised serious questions about whether the String Similarity Review rules were consistent with the Bylaws, but said that the time to challenge such rules had “long since passed”.
In both cases, ICANN followed the rules. Where the two panels’ declarations diverge is on whether you can win an IRP challenging the implementation of those rules — for DotConnectAfrica the answer was yes, for Booking.com the answer was no.
In a new gTLD program that has produced long lists of inconsistencies; IRP panel decisions appear to be but the latest example.
The question now is how the ICANN board will deal with the BGC recommendation to reject Booking.com’s latest RfR.
If it summarily approves the BGC’s resolution, without doing some extra due diligence, will it be breaking its Bylaws?

ICANN wins .hotels/.hoteis confusion appeal but has to pay up anyway

The proposed new gTLDs .hotels and .hoteis are too confusingly similar to coexist on the internet.
That’s the result of an Independent Review Process decision this week, which denied .hotels applicant Booking.com’s demand to have ICANN’s string confusion decision overturned.
But the IRP panel, while handing ICANN a decisive victory, characterized the string confusion and IRP processes as flawed and said ICANN should have to pay half of the panel’s $163,000 costs.
Booking.com filed the IRP a year ago, after the new gTLD program’s String Similarity Panel said in February 2013 that .hotels was too similar to rival Despegar Online’s proposed .hoteis.
.hoteis is the Portuguese translation of .hotels. Neither string was contested, so both would have been delegated to the DNS root had it not been for the confusion decision.
In my view, the String Similarity Panel’s decision was pretty sound.
With an upper-case i, .hoteIs is virtually indistinguishable from .hotels in browsers’ default sans-serif fonts, potentially increasing the ease of phishing attacks.
But Booking.com, eager to avoid a potentially costly auction, disagrees with me and, after spending a year exhausting its other avenues of appeal, filed an IRP in March 2013.
The IRP decision was handed down on Tuesday, denying Booking.com’s appeal.
The company had appealed based not on the merits of the SSP decision, but on whether the ICANN board of directors had acted outside of its bylaws in establishing an “arbitrary” and opaque SSP process.
That’s because the IRP process as established in the ICANN bylaws does not allow appellants to changed a decision on the merits. IRP panels are limited to:

comparing contested actions of the Board to the Articles of Incorporation and Bylaws, and with declaring whether the Board has acted consistently with the provisions of those Articles of Incorporation and Bylaws.

The IRP panel agreed that the SSP process could have been fairer and more transparent, by perhaps allowing applicants to submit evidence to the panel and appeal its decisions, saying:

There is no question but that that process lacks certain elements of transparency and certain practices that are widely associated with requirements of fairness.

But the IRP panel said Booking.com was unable to show that the ICANN board acted outside of its bylaws, highlighting the limits of the IRP as an appeals process:

In launching this IRP, Booking.com no doubt realized that it faced an uphill battle. The very limited nature of the IRP proceedings is such that any IRP applicant will face significant obstacles in establishing that the ICANN Board acted inconsistently with ICANN’s Articles of Incorporation or Bylaws. In fact, Booking.com acknowledges those obstacles, albeit inconsistently and at times indirectly.
…
Booking.com has failed to overcome the very obstacles it recognizes exist.

The IRP panel quoted members of ICANN’s New gTLD Program Committee extensively, highlighting comments which questioned the fairness of the SSP process.
In contrast to usual practice, where the losing party in an IRP bears the costs of the case, this panel said the $163,000 costs and $4,600 filing fee should be split equally between ICANN and Booking.com:

we can — and we do — acknowledge certain legitimate concerns regarding the string similarity review process raised by Booking.com, discussed above, which are evidently shared by a number of prominent and experienced ICANN NGPC members.
…
In view of the circumstances, each party shall bear one-half of the costs of the IRP provider

Booking.com and Despegar will now have to fight it out for their chosen strings at auction.
The full decision can be read in PDF format here. Other documents in the case can be found here.
The TL;DR version: ICANN wins because it has stacked the appeals deck in its favor and the IRP process is pretty much useless, so we’re going to make them pay up for being dicks.

.hotels applicant files IRP on ICANN

New gTLD applicant Booking.com has filed an Independent Review Process complaint against ICANN.
ICANN and Booking.com attorney Flip Petillion of Crowell & Moring confirmed the filing with DI this evening. Earlier Belgian newspaper reports of a full-on lawsuit appear to be inaccurate.
The IRP — ICANN’s final appeals process, designed to avoid lawsuits — is related to the .hotels contention set.
Booking.com’s uncontested application for .hotels was placed into a contention set with Despegar Online’s bid for .hoteis (the Portuguese translation) by ICANN’s independent String Similarity Panel in February 2013.
The panel ruled that the two strings are too confusingly similar to coexist on the internet, due to the similarity between the letters I and L.
That means the two applicants either had to resolve their differences privately, which apparently hasn’t happened, or enter into a potentially expensive ICANN auction of last resort.
Booking.com seemingly wants to avoid that auction, hence the IRP.
It’s the second IRP to be filed by a new gTLD applicant in this round, after DotConnectAfrica’s January filing.
ICANN tells me the IRP documents will be posted on its web site later today.