Approved Resolutions | Regular Meeting of the ICANN Board | 14 November 2024

Rationale for Resolutions 2024.11.14.01 – 2024.11.14.02

Why is the Board addressing the issue?

Private Resolution of Contention Sets

The community has long grappled with the question of how to resolve contention in the Next Round, as evidenced, for example, in the SubPro Final Report: Policy recommendation 35.2 that would have explicitly permitted private resolution and private auctions. This recommendation received "strong support and significant opposition" from the Working Group but failed to reach consensus-level support. Consequently, the Council did not adopt this recommendation (see GNSO Council resolution, dated 18 February 2021).

Private resolution of contention sets was encouraged during the 2012 round of the New gTLD Program (2012 Round). As a consequence of that implementation decision, the majority of contention sets were resolved privately - anecdotally involving large amounts of money. Many in the ICANN community have since stated their unease with this practice, not least because permitting private resolution may also have encouraged gaming in that application round. Some applicants might have submitted applications with the intent to receive a payout for exiting a contention set, rather than to operate a gTLD. The SubPro PDP Working Group acknowledged this to be an issue, recommending that "applications must be submitted with a bona fide ("good faith") intention to operate the gTLD" (see Final Report recommendation 35.3). The Working Group noted further in its rationale for recommendation 35.3 that "[t]he Working Group has elected to primarily target concerns about an applicant submitting an application with no intent to operate the gTLD."

Similarly, the At-Large Advisory Committee (ALAC) in June 2024 advised the Board to "ban all forms of post-application private resolution of contention sets, including joint-ventures regardless of claims as good-faith joint ventures [...]". The Governmental Advisory Committee (GAC) also advised the Board "to ban or strongly disincentivize private monetary means of resolution of contention sets, including private auctions" in its ICANN77 Washington Communiqué. On 29 July 2024, the Board accepted GAC Consensus Advice from its ICANN80 Kigali Communiqué to "prohibit the use of private auctions in resolving contention sets in the next round of New gTLDs."

In this context, it is worth noting that in the Report 'Addressing monetary means of private resolution', delivered to ICANN in May 2024, NERA, a leading economic advisor on the design and implementation of auctions, stated that "a ban on private resolution" would "bring ICANN to the mainstream practice among governments and companies resolving contention". The Report also states that "it is extremely rare for a party organizing an allocation process to allow participants in contention to decide major allocation and pricing decisions among themselves".

During the Board's Los Angeles workshop in 2024, the Board focused its discussion on how to move forward on three items: (1) the extent to which applicants should be able to organize private agreements to resolve contention; (2) whether, and if so, how to provide less-well-resourced applicants a chance to obtain a desired string if they are in a contention set; and (3) whether to rely on ICANN auctions using the ascending-clock second-price methodology to resolve contention or to adopt an alternate methodology such as Vickrey auction, or even a raffle.

After discussing the issue of private resolution of contention sets, and taking into account relevant advice, the Board determined that private resolutions of contention sets will not be permitted during the Next Round. Consequently, the Board finds that that allowing joint ventures, as previously approved in Recommendation 20.6 (see Board resolution 2023.03.16.04), is no longer in the best interests of the ICANN community or ICANN, as per Bylaws Annex A, Section 9(a).

Methodology for ICANN Auction of Last Resort

The decision to use the ascending clock-second price auction method for ICANN's auction of last resort during the 2012 round of the New gTLD Program was an implementation decision, as the 2007 Final Report did not contain any recommendation on the specific auction method.

The SubPro PDP WG deliberated whether to recommend a different auction method than what was used in the 2012 round of the New gTLD Program. The WG ended up drafting recommendation 35.4, which recommends using a second price sealed-bid method. However, the PDP WG Co-Chairs designated the PDP WG's support for this recommendation as 'strong support but significant opposition'. As a result, the GNSO Council resolved in February 2021 not to adopt that recommendation.

Subsequently, the ALAC provided advice to the Board on 21 June 2024 to "adjust the ICANN Auction of Last Resort to an auction process methodology comparable to a Vickrey Auction (sealed-bid second-price auction) requiring each gTLD string application to be accompanied by an auction bid at the time the application is submitted, and prior to any indication of possible contention sets being formed." This advice reiterates the ALAC position contained in its Minority Statement annexed to the Final Report.

The Board decided that providing certainty on the auction method to be used in the Next Round will provide certainty on an issue for which there is no policy recommendation and also address the June 2024 ALAC advice. This Board decision does not preclude the community from developing policy recommendations on the auction method for future rounds. In fact, the Board would welcome bottom-up policy development on this issue.

What are the proposals being considered?

The Board considered the following proposals:

• Ban all forms of private resolutions during the Next Round.
• Direct ICANN org to implement the same auction methodology (ascending clock second price) that was used during the 2012 round of the new gTLD Program.

Which stakeholders or others were consulted?

Prior to its decision the Board consulted the following stakeholders:

• The Board held a clarifying call with the GAC following the issuing of the ICANN77 advice Consultation as well as a clarifying call following the GAC's issuing of the ICANN80 advice.
• Board members participated in the consultation call as observers and the Board also reviewed the readout.
• The Board informed the GNSO Council of its intention to take the actions detailed in this Board paper.

What concerns or issues were raised by the community?

The Final Report notes the community's concerns around gaming and other issues, such as application rolling, that occurred during the 2012 round when applicants were encouraged to resolve privately, see Rationale for recommendation 35.2 and 35.3 (see Final Report pages 179-181).

The GAC has issued advice to "to ban or strongly disincentivize private monetary means of resolution of contention sets, including private auctions".

The ALAC has issued advice to "ban all forms of post-application private resolution of contention sets, including joint-ventures regardless of claims as good-faith joint ventures [...]"

The 13-14 August 2024 community consultation on contention resolution saw some participants voice concerns about financially less-well resourced applicants being inherently disadvantaged in an auction setting.

What significant materials did the Board review?

The Board reviewed the following significant materials:

• Final Report on the new gTLD Subsequent Procedures Policy Development Process (Final Report)
• GAC ICANN77 Washington D.C. Communiqué
• NERA Report 'Addressing monetary means of private resolution'
• GAC ICANN80 Kigali Communiqué
• ALAC Advice to the ICANN Board on New gTLD Contention Resolution
• Read out from the https://community.icann.org/x/vwGxFQ

Are there positive or negative community impacts?

The community impacts are positive as the action provides clarity on the implementation path for private resolutions and the auction method to be used in the Next Round, both issues for which the SUbPro PDP WG had drafted recommendation but that were not adopted by the GNSO Council as they did not reach consensus-level support, per PDP Guidelines Section 3.6.

Are there fiscal impacts or ramifications on ICANN (strategic plan, operating plan, budget); the community; and/or the public?

While private resolution of contention sets was encouraged in the 2012 round, it has been banned for the Next Round. This means there may be an increase compared to the last round in the use of ICANN Auctions of Last Resort as a contention resolution mechanism. The increased use of such auctions may have a fiscal impact on the amount of auction proceeds, and further discussion may be needed to determine how those proceeds should be used.

Are there any security, stability or resiliency issues relating to the DNS?

The adoption of these resolved clauses do not impact the security, stability or resiliency of the DNS.

Is this decision in the public interest and within ICANN's mission?

This Board action is within ICANN's Mission and is in the public interest.

Is this either a defined policy process within ICANN's Supporting Organizations or ICANN's Organizational Administrative Function decision requiring public comment or not requiring public comment?

This process does not require public comment.

Rationale for Resolutions 2024.11.14.03 – 2024.11.14.05

Why is the Board addressing the issue?

The Board is addressing this issue following the GNSO Council's approval and subsequent submission of the Supplemental Recommendation.

What are the proposals being considered?

The Board is asked to consider supplemental recommendations pertaining to Topic 24 of the Final Report on the new gTLD Subsequent Procedures Policy Development Process. Specifically, the Board is adopting supplemental recommendations 24.3:

"The GNSO Council recommends prohibiting the delegation of singulars and plurals of the same word in the same language in order to reduce the risk of end user confusion. This prohibition applies in two distinct situations 1) where an applied-for gTLD string is a singular or plural of an existing gTLD or those Blocked Names on Annex A and 2) where an applied-for gTLD string is a singular or plural of another applied-for gTLD string:

1. If ICANN org is informed by reference to a dictionary, and verifies by reference to a dictionary, that an application for a string that is the singular or plural version of the same word in the same language during the same application window, of an existing gTLD or Blocked Name1 has been submitted, such application will not be permitted to proceed. ICANN org will treat all other applications for the same strings in the same manner.
2. If ICANN org is informed by reference to a dictionary, and verifies by reference to a dictionary, that there is an application for the singular version of a word and an application for a plural version of the same word in the same language during the same application window, the relevant applications will be placed in a contention set. ICANN org will treat all other applications for the same strings in the same manner."

For the avoidance of doubt, adopting Supplemental Recommendation 24.3 means that applied-for strings representing singular and plural versions of the same word in the same language could be delegated if ICANN does not receive any notifications to put them into contention and if the respective strings otherwise pass all applicable evaluation and review processes. Equally, an applied-for string representing singular and plural versions of the same word in the same language of an already-delegated string or blocked name could be delegated if ICANN does not receive any notifications to put them into contention and if the respective strings otherwise pass all applicable evaluation and review processes.

Which stakeholders or others were consulted?

Through its liaisons the Board has actively observed the GNSO Council's Small Team Plus.

What concerns or issues were raised by the community?

No issues were raised.

What significant materials did the Board review?

The Board reviewed the supplemental recommendation, the GNSO Council transmission letter, and the rationale that led to the Board's non-adoption of the original Final Report recommendations.

Are there positive or negative community impacts?

The GNSO Council-approved supplemental recommendation 24.3 addresses the concerns the Board had previously raised for why the original recommendation was not in the best interest of the ICANN community or ICANN. The amendments to the recommendation mean that this supplemental recommendation will be adopted and implemented in time for inclusion into the forthcoming Applicant Guidebook and help inform the next round of new gTLDs. Adoption of this resolution will have a e positive impact on the community as it will address the issue of singular and plural words in the same language applied to different strings, which was a concern for various applicants and stakeholders during the 2012 round of the New gTLD Program.

Are there fiscal impacts or ramifications on ICANN (strategic plan, operating plan, budget); the community; and/or the public?

This decision will have no direct fiscal impact or ramification on ICANN, the community or the public.

Are there any security, stability or resiliency issues relating to the DNS?

The adoption of the recommendation could be positive for security/stability because it addresses visual similarity between singular and plural versions of gTLD strings, which some have raised as a possible user confusion issue.

Is this decision in the public interest and within ICANN's mission?

This Board action is within ICANN's Mission and is in the public interest, as per Annex A of the Bylaws, the Board needs to weigh whether GNSO-developed recommendations are in the best interest of the ICANN community or ICANN before adopting them.

Is this either a defined policy process within ICANN's Supporting Organizations or ICANN's Organizational Administrative Function decision requiring public comment or not requiring public comment?

This process does not require public comment.

Rationale for Resolutions 2024.11.14.06 – 2024.11.14.07

The preferred vendor for the Service Level Agreement Monitoring (SLA Monitoring) System ICANN uses is the developer of this proprietary, widely used enterprise monitoring platform, which the provider customized for ICANN's use. For more than ten years, ICANN has been augmenting the functionality of the SLA Monitoring System by signing yearly development contracts with the vendor. The work covered by these annual development contracts have led to a unique tool that has been highly customized to ICANN's specifications and requirements over the years. In performing each new project, the vendor has consistently delivered the required functionality on time and within budget, demonstrating the provider's reliability and commitment to excellence. The preferred vendor has the expertise and technical skills necessary to maintain this custom system developed to ICANN's specifications for monitoring the RA and RAA provisions.

The New Generic Top-Level Domains (gTLD) Program: Next Round is estimated to add approximately 1,200 new gTLDs to the root. The number of gTLDs currently supported in the SLA Monitoring System has already consumed around 90% of the system's capacity, and adding the load arising from the Next Round requires the development of extensive code optimizations to support the anticipated additional gTLDs.

The SLA Monitoring System has been customized to ICANN's specifications and requirements over a more than ten-year period. [Redacted - Confidential Negotiation Information].

Consequently, ICANN commissioned the preferred provider to study the SLA Monitoring System's ability to perform at its current levels and effectiveness if ICANN added a significant number of additional gTLDs into the root. The study indicates that the SLA Monitoring system can only support the anticipated volume of additional gTLDs with extensive code optimizations (option 1) or implementing workarounds in the current code and scaling up hardware (option 2). The outcome of the study showed that implementing extensive code optimizations (option 1) will provide savings over option 2.

ICANN org and the provider estimate that the work required to upgrade the code in the SLA Monitoring System will not exceed [Redacted - Confidential Negotiation Information], which includes a contingency of 10% for unexpected overage. The development of such functionality is planned to be distributed into three phases, with the first phase starting in FY25 and the two remaining phases in FY26 and FY27, so that the system is ready on time to absorb the delegation of the anticipated volume of new gTLDs.

Accordingly, ICANN is now seeking to contract with the preferred provider for this code optimization work to upgrade the SLA Monitoring System over a three-year period for a total amount not to exceed [Redacted - Confidential Negotiation Information].

This action is within ICANN's Mission and is in the public interest as it is important to ensure that, in carrying out its Mission, ICANN utilizes available funding in the most effective and efficient manner to be in the best interests of ICANN and the global Internet community. Further, as noted above, this action is intended to have a positive impact on the New gTLD Program: Next Round.

This decision will have a fiscal impact, but the impact has already been accounted for in the FY25, and will be accounted for in the FY26, and FY27 New gTLD Program and ICANN Operations budgets.

Further, this decision is intended to have a positive impact on the security, stability or resiliency of the domain name system.

This is an Organizational Administrative Function that does not require public comment.

Rationale for Resolutions 2024.11.14.08 – 2024.11.14.09

The Applicant Support Program (ASP) is an integral component of the New gTLD Program and aims to serve the global public interest by ensuring worldwide accessibility to, and competition within, the domain name market. It is a global program that is intended to provide financial and non-financial assistance to eligible entities that demonstrate need and that wish to apply for and operate a gTLD in the domain name system (DNS). Eligible entities are nonprofits/charities/nongovernmental organizations; intergovernmental organizations; indigenous/tribal communities; small businesses that are social enterprises or operating in a developing economy.

Using a third-party provider to conduct evaluations for the ASP will ensure that the assembled reviewers have the relevant knowledge and experience required to provide high-quality, well-informed evaluations, and do not have a conflict of interest that would disqualify them from providing this service without bias. The selected provider will formulate Support Applicant Review Panel(s) (SARP) that are diverse in terms of geography, language, race/ethnicity, and gender. Organizing the evaluation in this way is consistent with research findings on other globally recognized programs (for more information see Section: Review Panels (pg. 40) of the Survey of Globally Recognized Procedures for Financial Assistance Programs.)

After evaluation of all RFP proposals and completion of due diligence, ICANN has selected a provider and is undergoing negotiations. ICANN org identified the selected provider as having a clear understanding of the needs of the ASP and the capability to perform at the appropriate service levels. Additionally, the selected provider has a broad understanding of the current industry and of the ICANN multistakeholder model.

The selected provider is well positioned to provide SARP services. [Redacted - Confidential Negotiation Information]. It has staff with the appropriate evaluation skills and diverse experience to conduct fair and objective assessments of globally diverse ASP applicants. In addition, it has extensive knowledge and experience with ICANN, and the adequate resources to conduct the assessments and evaluations.

Accordingly, ICANN is now seeking to contract with the preferred provider to provide Support Applicant Review Panel (SARP) services for a term of 1.5 years, not to exceed [Redacted - Confidential Negotiation Information].

This decision is in the furtherance of ICANN's mission and the support to increase global diversity and representation across regions within the New gTLD Program by ensuring that efforts are made to minimize any competitive disadvantages is within the public interest.

This decision will have a fiscal impact, but the impact has already been accounted for in the FY25 New gTLD Program budget and will be for future budgets as well.

This is an Organizational Administrative Function that does not require public comment.