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Board Discusses Auctions of Last Resort, Private Resolution of Contention Sets

3 June 2024

One of the key topics related to the New gTLD Program: Next Round is "string contention resolution." Tripti Sinha, Chair, ICANN Board of Directors, provides an update on the Board's discussion regarding one form of contention resolution, ICANN Auctions of Last Resort, and shares the report of the National Economic Research Associates (NERA).


In cases where there is more than one qualified application for the same or similar strings ("contention"), the Subsequent Procedures Policy Development Process Working Group (SubPro PDP) provided recommendations regarding mechanisms to resolve such contention. These mechanisms include Community Priority Evaluation for community applications and ICANN Auctions of Last Resort, which is an ascending-clock auction administered by an ICANN-contracted auction service provider.

In the 2012 round of the New gTLD Program ICANN encouraged, via the Applicant Guidebook, self-resolution among applicants in contention. In fact, in that round, most applicants in contention did resolve among themselves; only 16 of the 234 contention sets (groups of applications in contention) used the ICANN Auctions of Last Resort.

Applicants opting to resolve among themselves used some form of private resolution, which often included a private auction. A private auction is an auction that is not administered by ICANN and proceeds are divided between the applicants, unlike an ICANN Auction of Last Resort, where the proceeds go to ICANN.

Private Resolution and Auctions in the New gTLD Program: Next Round

Since the 2012 round, the use of private resolution/private auctions has become a topic of community discussion. The Board understands that some in the community believe that there should be no restrictions on the use of private auctions, while many in the community feel strongly that the use of private auctions to resolve contention sets should not be repeated in the next round of new gTLD applications. Because of these differing views, the SubPro PDP was not able to reach consensus recommendations on the matter.

However, the Board has received advice from both the At-Large Advisory Committee and Governmental Advisory Committee (GAC) recommending that private auctions and/or private resolution of contention sets (especially, "private monetary means of resolution…") should be banned or strongly disincentivized.

The Board believes that the banning or disincentivizing of "private monetary means for the resolution of contention sets" is not a straightforward task. SubPro PDP recommendation 20.6 foresees joint ventures to resolve contention sets. However, creating a joint venture is also considered a form of private resolution and usually includes the exchange of money or other items of value, such as business shares, among the participating parties.

Considering the experiences from the 2012 round, the Board is not inclined to sanction a repeat of the 2012 process when private resolutions were encouraged in the Applicant Guidebook. Therefore, the Board is considering reconciling the SubPro PDP recommendation to allow joint ventures to resolve contention sets with the advice from the GAC "to ban or strongly disincentivize private monetary means of resolution of contention sets." To better understand if/how to reconcile these two seemingly contradictory concepts, the Board engaged NERA to examine the issue. Specifically, the Board asked NERA to explore how ICANN could permit "good-faith" joint ventures to resolve contention sets while strongly disincentivizing private monetary means of resolution. The Board reviewed an initial version of its findings during our May workshop, and NERA has since submitted its final report. Please see the full report on the ICANN website.

NERA noted in its report that a ban on private resolutions would have to include all forms, including joint ventures. If the formation of joint ventures is permitted, NERA recommends establishing mechanisms to resolve contention that seek to disincentivize private resolution while allowing good-faith joint ventures. However, it should be noted that the NERA report states that "measures that encourage good-faith joint ventures are inherently in tension with ICANN's other objective of disincentivizing monetary means of private resolution." The Board expects to discuss this issue further at its workshop in Kigali, Rwanda, ahead of ICANN80. We will keep the community abreast of our discussions on this very important issue.


Tripti Sinha

Tripti Sinha

ICANN Board Chair