A US auction house has said it will allow bidders for new generic top-level domains (gTLDs) to test its systems before hosting live auctions.
Cramton Associates, one of several gTLD auctioneers, is encouraging bidders to join the mock auction on May 23 to familiarise themselves with the online system.
The company is hosting a ‘simultaneous ascending clock auction’, starting on May 28 and lasting up to four days. The model dictates that a gTLD price rises until one bidder remains, with the final value equalling the price that the second-highest bidder was willing to pay.
A Cramton blog post said the test will run in exactly the same way as a normal auction but it will “have no meaning and the schedule will be heavily accelerated”.
Sheel Mohnot, project director for the applicant auction, told WIPR that a number of participants have expressed interest in the auction but could not provide any more information as final documents haven't been released.
Of more than 1,000 gTLDs, which are currently being evaluated by the Internet Corporation for Assigned Names and Numbers (ICANN), about 200 are contested, with auctions seen as one way to separate rival applicants.
If applicants withdraw their applications before ICANN posts initial evaluation (IE) results, expected to be in August, ICANN will refund 70 per cent of the $185,000 application fee. But if they wait until IE closes, applicants will receive only 35 per cent back.
This means that resolving auctions before August will be attractive for companies wishing to reclaim much of their investment. However, a situation could arise where one company wins an auction but fails ICANN’s IE stage. This may lead to more problems over resolving the ownership of the gTLD.
Mohnot confirmed that if a winning applicant fails IE, “no one would own the string because everyone else would have withdrawn. Withdrawals take place immediately after the auction, so we advise applicants who are unsure of their IE result to wait with auction participation until they know the result of their IE."
But he said: “Most of the strings have passed IE or the applicants they feel they will – pro organisations have done their homework.”
Ben Anderson, head of gTLD products at NetNames, confirmed that in this situation the string would be returned to ICANN.
He added, however, that if companies fail initial evaluation, particularly because of minor problems with an application, they can try to amend them. “For many people I don’t see it as being a problem but it is a possibility [winning a gTLD but failing IE]."
There are at least two other gTLD auction houses – Sedo and RightOfTheDot. A RightofTheDot spokesman said the company will host auctions “over the next several weeks”, adding that it will be the first company to do so. A Sedo spokesman confirmed that the company will host auctions in about October 2013.
This article was first published on 01 May 2013 in World IP Review
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