Auctions to Determine New Top Domain Applicants

September 4, 2008
Lexero LLC

 

Given that ICANN recently voted to expand the possibilities for gTLDs, the oversight organization must now deal with the logistics of selecting and assigning administrators for each of the soon to be available gTLDs.

One issue is the possibility that two potential organizations may want to be responsible for allocating the same gTLD. For example, perhaps Group A, a non-profit group, wants “.money” for purposes of identifying sites concentrating on proper personal financial management. Group B, a financial services firm, wants “.money” for identifying financial advisors, stockbrokers and other finance professionals. ICANN’s solution for such a quandary: auctions.

ICANN has determined that, assuming all other things are equal, the competing parties will determine the winner of the coveted extension by auction. This is a method that has been used by new extensions in recent years to determine ownership of particular domains. For example, the “.mobi” extension famously auctioned off several of its “premium names,” as opposed to opening them up in a “landrush” public registration format.

The primary problem with an auction is the concern that our fictitious “Group A” would not have the financial means to compete with “Group B” for our example ".money" gTLD. ICANN attempts to resolve this problem by implementing a system of handicaps. These handicaps would favor for example, “community-based bidders whose community is located primarily in [the] least-developed countries.”

Are these procedures enough to ensure fairness? More than likely, they will be more than enough, because it is quite unlikely that there will be many disputes at all. One can imagine certain gTLDs, like “.sex,” may be disputed, but the chances are good that there will be no need for auction handicaps when the proposed gTLDs are propounded by for-profit industries. Even if the auction process is not particularly favored by all interested parties there is peace is knowing that there will be few, if any, auctions implemented in practice


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Lexero LLC

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