Feeds

ICANN backs auction of disputed domains

Gavel to break ties

The essential guide to IT transformation

The body behind the internet's addressing systems has said that it will settle disputes over who wins the right to new generic top level domains (gTLDs) by auction.

ICANN (International Corporation for Assigned Names and Numbers) has said that auctions will be used if two organisations vying for the right to a gTLD are tied on other grounds.

ICANN announced earlier this summer that it would no longer limit the number of gTLDs to 21, and that almost any word or phrase could be registered as a domain.

The move has been condemned as a "nightmare" for brand owners because many will feel compelled to buy their brand's name on each of numerous new TLDs expected to appear.

ICANN's announcement that auctions will settle disputes over who will have the right to register words as domains is likely to be just as controversial.

The body announced in June that anyone can register any word as a TLD as long as it meets four conditions. "It must respect prior rights and marks, it mustn't be confusingly similar to any existing TLD, for example a .KOM would be too close to a .COM, if it represents a community, it must be with the full agreement of that community, and it must respect morality and public order," said ICANN chairman Peter Dengate Thrush at the time of the announcement.

If two applications are tied then ICANN has now said it would use an auction to determine who wins the right to own the domain.

"ICANN intends to use auctions in the new gTLD process as a tie-breaking mechanism, not the primary allocation mechanism, for the resolution of string contention among competing new gTLD applicants for identical or similar strings," said a consultation document discussing the move. "Auction would be the final means of settling any contention cases that have not been resolved at any of the previous stages in the process."

A report produced by consultancy Power Auctions said that a four year old paper produced by the Organisation for Economic Cooperation and Development (OECD) had backed auctions as the most efficient way to distribute domains.

"On balance the economic arguments favour the use of auctions in some form, where scarcity exists, in relation to the goals set by ICANN for allocation procedures," said that report. "They are particularly strong in relation to allocation decisions concerning to existing resources and where a ‘tie-breaker’ is needed during a comparative selection procedure for a new resource. In all cases, the best elements of comparative selection procedures could still be incorporated, at a prequalification stage for registries, using straightforward, transparent, and objective procedures that preserve the stability of the internet."

In its report, Power Auctions argued that auctions help to attach the correct value to domains. "Auctions are well suited to accomplishing the goal of allocative efficiency: Putting scarce resources into the hands of those who value them the most," said the report. "As such, the results of auctions tend to create greater social value than alternative allocation mechanisms."

In order to ensure fairness, the report also proposed a system of handicaps in favour of some kinds of applicants.

"Various devices can be considered for favoring disadvantaged bidders in an auction," it said. "For example, a 25 per cent bidding credit could be offered to community-based bidders whose community is located primarily in least-developed countries: a $300,000 bid from such a bidder would be viewed as equivalent to a $400,000 bid from a wealthy country."

Copyright © 2008, OUT-LAW.com

OUT-LAW.COM is part of international law firm Pinsent Masons.

Related link

ICANN's report (pdf)

The essential guide to IT transformation

More from The Register

next story
GCHQ protesters stick it to British spooks ... by drinking urine
Activists told NOT to snap pics of staff at the concrete doughnut
Britain's housing crisis: What are we going to do about it?
Rent control: Better than bombs at destroying housing
What do you mean, I have to POST a PHYSICAL CHEQUE to get my gun licence?
Stop bitching about firearms fees - we need computerisation
Top beak: UK privacy law may be reconsidered because of social media
Rise of Twitter etc creates 'enormous challenges'
Redmond resists order to hand over overseas email
Court wanted peek as related to US investigation
Ex US cybersecurity czar guilty in child sex abuse website case
Health and Human Services IT security chief headed online to share vile images
NZ Justice Minister scalped as hacker leaks emails
Grab your popcorn: Subterfuge and slur disrupts election run up
prev story

Whitepapers

Endpoint data privacy in the cloud is easier than you think
Innovations in encryption and storage resolve issues of data privacy and key requirements for companies to look for in a solution.
Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Advanced data protection for your virtualized environments
Find a natural fit for optimizing protection for the often resource-constrained data protection process found in virtual environments.
Boost IT visibility and business value
How building a great service catalog relieves pressure points and demonstrates the value of IT service management.
Next gen security for virtualised datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.