If two or more applicants applied for the same new gTLD unless the parties can resolve their contention between themselves the parties go to an ICANN last resort auction.
We have chatted before that we expect some of the new gTLD string auctions to go into the $xx,xxx,xxx range.
With potentially over 200 new gTLD strings going to an ICANN auction we would expect revenue to ICANN from these last resort auction to generate Hundreds of Millions of dollars to ICANN.
Yet ICANN 2014 budget includes virtually no revenue from these last resort auction which we have called ICANN out over the years for failing to include.
When it comes to revenue from String Contentions ICANN only has a little over $1 Million dollars coming in 2014 from these auctions and $1.5 in 2015 as a line item.
While ICANN always said the application fee of $185,000 would be a cost recovery fee meaning that ICANN was only charging what it estimated it would have to pay in proceeding of the new gTLD applications and program, it continues to ignore the real pot of gold at the end of the rainbow otherwise known as the last resort auctions.
Since ICANN hasn’t budgeted any revenue coming from last report auctions they haven’t budgeted any thing to spend the last resort auction revenue.
Its the hundreds of millions of dollars that ICANN will receive from the new gTLD last resort auctions that might propel the non-profit into the billion dollar cash on hand club.
“Since ICANN hasn’t budgeted any revenue coming from last report auctions they haven’t budgeted any thing to spend the last resort auction revenue.”
I believe they said they were going to donate it all or put it toward specific internet outreach and charitable efforts.
It’s slightly irrelevant anyway, given that ICANN plans to earmark all of the auction money for non-operational activities, “good causes” etc.
I don’t think ICANN has officially committed to how those funds will be spent or where they will go and will remain under the control of ICANN
Kevin
You are way more trusting then I am.
ICANN will have control of these funds and hasn’t specified in the least where the money is going just a lot of loose chat about public good etc.
Its not like they are going to write a check to the United Way for the full amount.
Has anyone considered a $100 million ad campaign that educates joe public on what domains can do for their business and how they can get the domain they want even if it’s taken, or if only they need it for a short campaign?
Owen
That is what I believe ICANN should do with the money put it back into the industry by promoting domains and educating the public however I don’t think that is the plan.
Here’s what it says in the guidebook. So I guess they could make it more clear/specific, although until they know how much money they’ll get it might be hard to say how it will be used.
1 The purpose of an auction is to resolve contention in a clear, objective manner. It is planned that costs of the new gTLD program
will offset by fees, so any funds coming from a last resort contention resolution mechanism such as auctions would result (after
paying for the auction process) in additional funding. Any proceeds from auctions will be reserved and earmarked until the uses of
funds are determined. Funds must be used in a manner that supports directly ICANN’s Mission and Core Values and also allows
ICANN to maintain its not for profit status.
Possible uses of auction funds include formation of a foundation with a clear mission and a transparent way to allocate funds to
projects that are of interest to the greater Internet community, such as grants to support new gTLD applications or registry operators
from communities in subsequent gTLD rounds, the creation of an ICANN-administered/community-based fund for specific projects
for the benefit of the Internet community, the creation of a registry continuity fund for the protection of registrants (ensuring that
funds would be in place to support the operation of a gTLD registry until a successor could be found), or establishment of a security
fund to expand use of secure protocols, conduct research, and support standards development organizations in accordance with
ICANN’s security and stability mission.
Foundation=Staff
Creation of fund=staff
sounds like a government project
A huge amount of money will be eaten up by administration, staffing, meetings , travel
IFFOR x 1,000
and What did they do last year, give two 5K grants away
There’s another a hot topic in auctions. Private auctions to resolve contention between applicants could are a good thing in general. It takes of pressure from ICANN and the new gTLD process, could save (in case of winning an auction) or bring (in case of losing an auction) the applicants money. Private auctions also bring timely clarity to many applicants how to act in the further new gTLD processes.
The problem that private auctions have is that they are not transparent for ICANN and the Internet community. They are critical in terms of the rules of the Applicant Guidebook since the auction outcome may have a tremendous impact not only on the financial stability of the winning applicant. It is anticipated that the payment of hundreds of thousands to millions of US$ by the winning bidder in an auction is in most case a clear-cut material change to its application. This applies to private as well as to ICANN auctions.
Paying such high amounts as auction winner not only changes marketing spending and staff count in a new gTLD’s business plan but it goes deeply into the whole business model of the applicant and is very likely to change the domain name price, expected number of domain name registrations and revenues. Public or hidden change of ownership or high debts are other likely outcome of an auction. According to the Applicant Guidebook a material change will lead to a re-evaluation of an application or may lead to a push of the application to the next round or a non-approval of an application.
Due to such a scenario and the observed gaming of loopholes in the Applicant Guidebook it is expected that most private auction winners will not communicate the full and true results of private auctions to ICANN. Therefore it is suggested that all results of private contention resolutions need to be reported to ICANN as a change request by the winning applicant. This includes short- to long-term agreed share transactions and other financial transactions, debts, staff changes and others. ICANN may consider then if the change request is a material change and what that means to the further processing of the application.
ICANN is going to report billions of dollars in debt just like the U.S. Govt. and file for bankruptcy and run off with your application and auction fees…
Madoff made off with your money and now, ICANN says because i can.
Good Luck getting your money back…you can fight lawsuits till u die and not recover a penny…kiss your money bye bye…it’s the American way…or should i say…it’s the Icann way…because i can!!!