The Freename Forum

The internet administration ICANN has restricted the bidding for new generic top level domains: private auctions will be prohibited in future. In addition, applications for singular or plural variants of existing domain endings are prohibited.

What to do if several companies apply for the same top level domain and none of them have priority? In such cases, the applicant handbook of the internet administration ICANN from the 2012 introductory round refers to an ‘auction of last resort’, i.e. a competitive bidding process in which the bidder who pays the most money wins. This has been lucrative for ICANN; a total of US$ 240,590,128 has flowed into the coffers of the Internet administration in 17 auctions to date. However, it could have been much more if numerous applicants had not opted for private auctions and ultimately sought an amicable solution among themselves - without ICANN's involvement. For example, some applicants had their right to participate in the ‘Auction of Last Resort’ bought off in order to make it easier for a competitor to win the bid, thereby lining their own pockets at the same time. The protests were massive, even if ICANN itself only speaks of unease about this practice. The Governmental Advisory Committee (GAC), the representative of national governments within ICANN, demanded that the use of private monetary means to resolve these competitive situations, including private auctions, should be prohibited or at least severely restricted. The At-Large Advisory Committee (ALAC), representing Internet users, also proposed that all forms of private dispute resolution after an application has been submitted should be banned in future, unless a community application has been submitted.

ICANN has now also followed this demand. At a meeting of the Board of Directors on 14 November 2024, the Board decided ‘to prohibit all forms of private resolution of contention sets in the Next Round, including prohibiting the formation of joint ventures among applicants after the submission of their applications.’ ICANN's reasoning includes the fact that the authorisation of private auctions may also have encouraged manipulation because applications had already been submitted with the intention of being remunerated for not participating in the auction without seriously wanting to operate the desired top-level domain. The consultancy firm NERA also stated that a ban on private auctions is common practice; it is extremely rare, however, for a party conducting an allocation procedure to allow applicants to make allocation and price decisions among themselves. Alternative methods such as a Vickrey auction (in which the highest bidder is awarded the contract but does not have to pay the amount of his own bid, but only that of the second-highest bid) or even a lottery were ruled out by the Executive Board. ICANN is explicitly considering the fact that the number of ‘auctions of last resort’ could increase significantly in future compared to 2012, including increased auction proceeds and the contentious questions of how these funds should be used.

The ICANN Board also decided on two contentious issues surrounding the authorisation of singular and plural versions of the same string. On the one hand, the ICANN Board decided that, for example, in the case of applications for .bitcoin and .bitcoins, the award will be decided in a uniform procedure, i.e. only one variant will be introduced. On the other hand, applications are prohibited if a singular or plural version already exists as a top-level domain. For example, an application for .flat would be inadmissible because the ending .flats already exists; the same applies vice versa for .blogs, as the ending .blog has already been delegated. The ICANN Board did not provide any information on when the final version of the applicant manual with all binding allocation rules will be available.

Sources:
https://domainincite.com/30045-private- ... gtld-round
https://domainincite.com/30251-big-twis ... d-auctions