One applicant for .cars has good questions about how exactly it can resolve its contention set.
DERcars, an applicant for the .cars top level domain name, has filed a reconsideration request (pdf) with ICANN’s board after Google won a string confusion objection against the company’s .cars application.
I wrote about the .cars case a few weeks ago, and said that ICANN would be forced to act in the wake of the string confusion objection. As one reader pointed out, it won’t necessarily be forced to act. ICANN may be able to play a wait-and-see game, but the .cars situation is certainly sticky. Here’s why.
Google applied for .car, while DERcars, Donuts, and Uniregistry applied for .cars. Google subsequently filed string confusion objections against each of the .cars applications.
It lost the cases against Donuts and Uniregistry, but had good luck of the draw with the panelist for the DERcars objection and succeeded in that objection.
As a result, DERcars’ .cars application is placed in a contention set with Google’s application for .car. DERcars is also in contention with Donuts and Uniregistry. This means that Donuts and Uniregistry are in indirect contention with Google’s .car application. Here’s a graphic to explain this.
The dashed lines represent indirect contention and the solid lines indicate direct contention.
According to the rulebook, that means all four applications are currently in one contention set. They will remain in one contention set until the DERcars application is resolved. (This is my interpretation of the rulebook after consulting with a couple sources.)
But how will that work? Several applicants and industry participants I’ve corresponded with have different opinions on how it could be resolved. As DERcars points out in its reconsideration request, it would seem that DERcars might be forced to compete in two separate contention set auctions.
It casts a lot of uncertainty on all .car/.cars applicants.
Should Donuts and Uniregistry work out their contention set now, with the possibility that the winner between the two would then have to resolve the contention set with DERcars if it forces Google to pull out?
How would an auction of last resort work? Would one go before the other? Which one? If DERcars wins an auction against Google, would it then have to participate in another auction with Donuts and Uniregistry? Would there instead by some sort of simultaneous auction?
It’s rather complicated. ICANN hasn’t spelled out the details of its auction process yet, but after making some inquiries I don’t believe the full ramifications of this exact scenario were previously considered.
Perhaps the problem will be simplified. Maybe DERcars decides it can’t compete against Google. Perhaps Donuts and Uniregistry hold a private auction with part of the proceeds going to pay DERcars to exit the race.
Maybe “wait and see” will be the best way for ICANN to handle this. If it gets resolved on its own, designing the auction will be easier. But right now it’s rather messy.
Richard Tindal says
I think ICANN’s auction advisors anticipated and addressed this situation in the Guidebook and the Explanatory Memorandum on Resolving String Contention:
Pages 14 and 18 of the Explanatory Memorandum are most relevant. For example:
In an auction for the “complex” contention set, the whole set is participating and one or more winners emerge. As mentioned earlier, an ascending-clock auction implies that applications exit successively as the bidding level in a round exceeds their respective exit bids. For each bidding round when one or more applications have exited, the remaining contention situations are reviewed and the auction process stops as soon as all contention situations have been resolved. “
Andrew Allemann says
I think that makes sense, but I’m not 100% sure I get it.
Let’s say all of the .car and .cars applicants are in one ascending clock auction.
Uniregistry bows out at $1
Donuts bows out at $2
DERcars bows out at $3
So Google wins, and DERcars is therefore out. Would that mean they then go look at Uniregistry’s and Donuts’ bid and then give .cars to whichever one of those had the highest bid, assuming they didn’t both exit the auction at the same time?
Richard Tindal says
In all scenarios each party bids only on its own TLD. So in the scenario you describe Google wins, it operates .CAR, and .CARS does not enter the root since all .CARS applicants dropped out. Neither Donuts nor Uniregistry can operate .CARS, because they both dropped out (DER beat them in auction), and DER cannot not operate .CARS becauce it dropped out (Google beat DER in auction).
Had DER withdrawn at $1 then Google would no longer be in contention with anyone. So Google would operate .CAR (and Google would pay the last amount bid by DER). Donuts and Uniregistry would continue the auction for .CARS (in this scenario where DER withdraws first) and one of them would win and end up paying — so in the end both .CAR and CARS would enter the root.
An important thing to grok is that, even though there’s only one auction, multiple TLDs are being auctioned simultaneously, and a participant only bids for their own name, and only competes against parties in their own contention set. Uniregistry and Donuts never compete with Google, and vice versa. DER is in both contention sets so it bids against everyone, as if it had 2 different TLDs in 2 different contention sets.
Andrew Allemann says
Got it. So it seems to me that Google winning the objection against DERcars could be bad for Uniregistry and Google.