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Re: [ga] Auctions

  • To: Danny Younger <dannyyounger@xxxxxxxxx>, ICANN new-gtlds <new-gtlds-pdp-comments@xxxxxxxxx>
  • Subject: Re: [ga] Auctions
  • From: Jeff Williams <jwkckid1@xxxxxxxxxxxxx>
  • Date: Sun, 15 Jan 2006 23:04:38 -0800

Danny, Karl and all former DNSO GA members or other interested

I do wholly agree with Richard Sheapards arguments regarding the
auction model for determining what TLD's are introduced and whom
would be the registry of same.  Yet as I have for our members many
times expressed in varying and no uncertain terms, the auction model
is anti competitive and not a free market approach which in our
collective majority opinion's is bad for a growing and thriving
global economy.

Danny Younger wrote:

> Re:  "Even during my term there were those who were
> absolutely, totally, and utterly against auctions, and
> some of those are still on the board."
> Karl,
> While we have heard the arguments in favor of auctions
> (Manheim, Solum, Mueller, yourself, etc.), we have
> frankly not yet considered the opposing points of
> view... in part because those privately-held views
> haven't been made public.
> For the sake of parity, I am therefore posting the
> Cross-Constituency view (BC-IPC-ISPCP) that opposes
> auctions (you may note that I don't agree with their
> position but I am posting it for the sake of
> discussion).  This is an excerpt from Philip
> Sheppard's White Paper on internet domain name
> expansion (June 2005):
> "5. The problem with an auction model for new domain
> names
> Sell to the highest bidder and hope that they have it
> right
> ICANN has indicated it may experiment with an auction
> model for the allocation of new domain names. This
> follows a suggestion aired though not justified in a
> 2004 paper from the OECD telecoms working party
> (bibliography reference 14). The paper compared an
> auction model to the laissez-faire model but
> regrettably did not address the quality benefits
> inherent in the added-value sponsored gTLD model.
> On the surface an auction model is more desirable than
> a 100% laissez-faire approach as the market would
> decide by price on the viability of success. But the
> approach has several drawbacks:
> ?X      Not so market-driven. An auction model may rely on
> a third party to dream up the names to auction. Who
> will that be? ICANN? Who says these will be the right
> names?
> ?X      Introduces bias. A work-around would be to allow
> the names to be proposed by the first prospective
> registry and then allow others to bid. But in such a
> case the latter bidders would always be at a
> disadvantage with respect to preparedness and their
> ability to assess the upper limit on a viable auction
> bid.
> ?X      Still no added value. Without the principles of
> differentiation, certainty and good faith, an auction
> model has no inherent ability to add value in the
> public interest.
> ?X      Market distortion from market hype. As the global
> bids for third generation mobile telephony have shown,
> even experienced companies may be tempted to grossly
> overbid in an auction model. The Internet has had its
> share of hype and will continue to do so. The prospect
> of the ¡§winner¡¦s curse¡¨ is real.
> ?X      Potential to be anti-competitive. An auction model
> has the potential to favour the existing dominant
> players. Given the current failure of competition at
> the registry level (84% market share by one company)
> this is not the model to use today.
> Summary
> In short, any supposed benefit from an auction model
> for new domain names has a disproportionate cost due
> to the increased likelihood of market distortions.
> Such an approach is contrary to the public interest
> and therefore contrary to ICANN¡¦s core values."
> http://www.bizconst.org/positions/WPnewgTLDsfinal.doc
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Jeffrey A. Williams
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