[At-Large] Auction Proceeds - where we are and what you can help

Kan Kaili kankaili at gmail.com
Sun May 14 11:48:45 UTC 2017

Hi, Evan and all,

Thank you very much for your reply and comments.

From the very beginning, I understand that my suggestion about a "refund" to applicants of new gTLDs is not going to be popular, especially within the At-Large community.  However, as an academician, my professional conscience tells me to say what I believe is right.

First of all, I do not want to exclude other ways of spending the auction revenue, but only to use part of the funds for refund to applicants.

Secondly, the auction revenue is clearly beyond the estimated costs for the new gTLD program, for the USD $175K is supposed to fully recover all the costs, including possible legal costs, and is already proven to create a surplus.

Thirdly, if we use this revenue to start new programs for ICANN, given that this is a one-time-only surplus, those programs will be hard to continue in the future and may likely create problems.  (Also, diffrent new programs may favor different stakeholders within ICANN, thus making it hard to reach an agreement among all.)

Thus, if ICANN recognizes that the new gTLD program's revenue is more than expected, it is only reasonable to refund the payees as an NPO.

I have noticed some of the replies talked about the "least sympathy" to speculators, which I fully agree with.  As a matter of fact, over half of new registrations within the last few years are being "parked", especially in China.  This is why I insisted to include sections on domian parking in the CCT-RT report, since most of those parked domains are believed to be for speculation.

However, for those applicants who applied for new gTLDs for REAL usages, ICANN clearly over-charged them.  This is not ICANN's fault, but ICANN's original calculation of costs was too high without considering the auction revenue which happened beyond expectation.  Thus, we OWE them a refund.

Therefore, as ICANN's original purpose of the new gTLD program was to facilitate usage of new domain names, refunding those who paid the hefty $175K for real usage of new gTLDs would only be natural.  In addition, if ICANN's refund is proportional to the real usage of domain names but excluds those being parked, it could motivate registries/registrars to discourage domain parking in the future.

Furthermore, it is already recognized that the new gTLD program also has its down-sides.  One of those is trademark holders are often forced to spend money to "defensively register" domain names in new gTLDs, with some of the costs substantial.  Thus, using some of the auction revenue to subsidize those who suffered from this new gTLD program would also be reasonable.  Abstract on this of the INTA (International Trademark Association) survey is attached FYI.

ps:  Sorry that I so far have not gone thru the new gTLD program's financial statements.  However, the idea of providing refunds does not have a direct relation to the exact method of cost calculation.

Thank you again.


  ----- Original Message ----- 
  From: Evan Leibovitch 
  To: Kan Kaili 
  Cc: ja.bhenda at gmail.com ; ICANN At-Large list 
  Sent: Sunday, May 14, 2017 3:26 AM
  Subject: Re: [At-Large] Auction Proceeds - where we are and what you can help

  On 13 May 2017 at 08:22, Kan Kaili <kankaili at gmail.com> wrote:

    I may not disagree with your arguments.  However, regarding calculating the "costs", that is only next to impossible.

  ​And that is at the heart of the issue. Just how much would you refund? ​

  ​The devil is in the details. The GNSO policy was clearly about cost-recovery. and I would argue that the sunk costs specific to that round are reasonable to be recovered by the fees.

  And then we spend more time debating the amount of refund than we spent rolling out the next round...

  Also: the POTS analogy doesn't work, since we are not talking costs of physical infrastructure. We can accurately count the person-hours spent in designing the program, especially that which was expended on that round alone.​

    From the above exmples, I believe you can already see the complexity of calculating the "real cost" of the new gTLD program.  Simply said, I do not believe in any claims of the "real cost", becuase it does not exist at all.

  ​I am not sure that I follow the logic that asserting that "the real cost is complex to calculate" leads to conclusion of "the real cost does not exist at all".​

  ​- Evan​

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