Two competing applicants settle contention set; first auction facilitated by new TLD consulting firm RightOfTheDot.
Webhosting company one.com has settled its contention set with Radix for .one through a “single sealed bid second price” auction orchestrated by RightOfTheDot.
In this type of auction, typically each participant will send in a sealed bid. The bids are opened under video surveillance and the highest bidder pays the second highest price.
For example, let’s say that One.com bid $2 million and Radix bid $1 million. (I’m making these numbers up.)
One.com would win the auction and pay the second highest bid price, in this case the $1 million bid.
This particular auction was handled a bit differently. Instead of sending in a sealed bid, both parties deposited their entire bid amount with Escrow.com. The deposits were deemed the parties’ bids, and the winner was determined by which company sent in the most money.
By requiring the entire amount be sent, the parties avoided a possible concern involving just sending in a deposit. If the parties only had to send in a deposit of a percentage of how much they planned to bid, there’s a possibility for gaming. An applicant that couldn’t really afford to pay the full amount could deposit a small amount with the assumption it will lose the auction and get paid off.
Sending in the entire amount of the bid makes the parties put their money where their mouth is.
Also, most pre-ICANN contention auctions are designed to pay off the losing bidder. In the example above, here’s how this would work:
1. One.com pays $1 million, the second highest bid.
2. One.com receives a refund of $1 million, the difference between how much it sent in and how much it had to pay as the winner.
3. Radix gets its $1 million deposit/bid back.
4. Radix also gets the $1 million One.com paid for the domain.
Fees are obviously deducted from these amounts.
This is the first contention set resolution auction held by RightOfTheDot. To date, most contention set auctions have been handled by Cramton Associates/Applicant Auction.
RightOfTheDot also has a partnership with Heritage Auctions to run more traditional auction based resolution, such as ascending clock and step auctions.
One.com intends to use the .one top level domain name as a .brand. It also applied for .icu and .now.