The .nyc Landrush Auctions: Adding Injury To Insult

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Collaboration Jackson Hts., New York, August 13, 2014 - New York City is in the midst of a 2 part “Landrush” for allocating .nyc domain names:

  • First is a 60 day Application Period, August 4 - October 3, during which any city resident can purchase an available .nyc domain name. Most any name is available, exceptions being a group set aside for technical reasons, 482 names taken by holders of international trademarks, and several thousand names reserved by the city administration. It doesn’t even matter if a name has a NYS Trademark or d/b/a registration, those names are fair game too.
  • Following this Application Period there’s a high-bid auction which decides who gets a domain name in instances where more than one person submits an application.

There are significant problems with this allocation process.

First, it’s fundamentally unfair. It disregards the proprietary rights of current business owners as expressed by prior use, a New York State Trademark, or a d/b/a. The fact that Rickys Cafe has been using that name for decades and has been issued a NYS Trademark for that name holds no significance during the city’s Landrush period. A revolutionary “property rights be gone” seems to be the attitude. Today, anyone with nexus (8,200,000 of us) can apply for RickysCafe.nyc and have as much right to own it as Ricky.

In preparing for issuing its .london domain names, the city of London developed Priority Period Rules that respect historic property rights. I commented on this recently recommending that New York follow London’s model.

But even with these Priority Period Rules there still needs to be a mechanism for deciding between applicants with the identical priority. Let’s imagine there’s an independently owned Rickys Cafe in every borough and that each submits an application by October 3. Who gets it?

Current Plan

The current plan holds that at the end of Landrush an email will be sent to applicants for domain names receiving only one bid, indicating their application has been approved and they may begin using the name.

In instances where more than one application has been submitted, the plan calls for a closed, private auction for each name. Using  RickysCafe.nyc as an example, here’s how that might work.

  • The 5 applicants for RickysCafe.nyc will receive an email informing them that others had applied for the name. And that they will need to win a high-bid auction if they hope to use the domain name.
  • If they decline to participate in the auction some of their application fees may be refunded - but this depends on the registrar they’ve chosen, some refund partial, some all, or so I’m told. It’s not obvious from ownit.nyc which does what.
  • The email will direct the interested Rickys to set up an account with the official auctioneer, and participate in an extended auction.
  • In this extended auction, unlike eBay, there’s no bid deadline. Rather, every time someone enters a bid, the auction is extended by 5 minutes. (This auction protocol maximizes revenue with the contractor receiving 60% and the city government 40%.)
  • The winning Ricky will be authorized to use the domain name after making good on its high bid.
  • The losers weep.

Added to the refusal of the city to respect NYS Trademarks and other indications of prior use, this high bidder auction might be said to add injury to insult.

An Innovative Approach

We think there’s a better way. The idea was sparked when ICANN’s experience with new top level domain names or TLDs. In 2012 it received 1,900 applications for 1,200 different TLDs. The official process for selecting between multiple applicants for the same name - for example there were 8 applicants for .music - was to encourage the applicants to try and resolve the dispute privately. And if no resolution was possible, a high-bid ICANN run auction would decide the winner. The high bidder would get the name with the auction proceeds going to ICANN.

But some smarties came up with a different idea. Instead of holding an auction wherein the proceeds went to ICANN, what about holding a private opt-in auction. And in those instances where all applicants were in agreement, they’d hire their own auctioneer. And instead of the high bid sum going to ICANN, it would be split by the “losing” bidders. So in the case of .music, the winning bidder would pass on that top bid to the auctioneer to be equally shared by the five “losers.” These funds could then be used by the losing bidders for marketing, research, or technology. See ICANNwiki for more on these “Applicant Auctions.”

An Improved .nyc Landrush

How might we adapt the Applicant Auction to the unique needs of the .nyc TLD? Indications from the first month of Landrush registrations are that 6% of the applications will have multiple bidders - 4,300 applications were received with 340 of them duplicates. If the city receives the same number of Landrush applications as London - roughly 50,000 - that might require 4,000 auctions if the Current Plan is followed. [The numbers were updated on September 13 to reflect the latest .london and .nyc experiences.]

But what if we opened up the process. Instead of the planned closed, private auction with bidders ignorant as to whom they were bidding against, we open up the process and put the bidders in touch with one another, as with the ICANN Applicant Auction. And perhaps we could tweak on that process by letting the public comment on the applications: “Which application for RickysCafe.nyc do you think should be approved?” Or we might invite public comments, or even enable investors to join with the bidders.

Click for larger image.

Click for larger image.

There will still need to be auctions. But in those instances where the multiple bidders all opt-in to a collaborative end (by auction or otherwise), more money will stay in the hands of applicants to improve their businesses. And because the top bidder will in essence be subsidizing its competitors, it will be inclined to moderate its bid. To everyone’s long term benefit. (Commons image courtesy on Jisc.)

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Auctions, Name Allocation Policy

Help! I’m going to lose my business name.

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Oklahoma LandrushToday I sent the below to the Mayor, Public Advocate, Comptroller, City Council Members, and Borough Presidents. It details two significant problems with the .nyc Landrush process and changes that can fix them.

August 8, 2014

I need your help.

For the past 7 years I’ve operated a small business here in Jackson Heights, Queens. We do research and develop technologies that facilitate urban governance. The firm, which I helped establish, Connecting.nyc Inc., is a NYS not-for-profit holding 501(C)(3) status at the IRS.

My concern has to do with the policies the city has established setting forth the order of distribution of domain names within the .nyc TLD.

As you might be aware…

  • The city of New York recently acquired the right to develop the .nyc TLD in 2012. (It’s like .com and .org but just for city residents and organizations.)
  • We’re now in day 5 of a 60 day “Landrush” period, August 4 to October 3. See this City Hall press release.
  • During Landrush any New Yorker can go online and purchase an available .nyc domain name: JerrysBakery.ny, RickysCafe.nyc, CoronaCivicAssociation.nyc, etc.
  • Some names were set aside for government use, so names such as Manhattan.nyc and BrooklynBoroughPresident.nyc are probably reserved.
  • But no names have been reserved for local businesses and organizations.

Our interest…

  • We want a good .nyc domain name for our business. The best would be “connecting.nyc” - the name we choose 7 years ago.
  • But because of a technicality, “connecting.nyc” will not be available until the end of the year - at the earliest.
  • In the interim, we’d like to use the .nyc version of the “Connectingnyc.org” domain name we’ve using for 7 years, i.e.,”Connectingnyc.nyc.”

Here’s the problem…

  • Earlier today I went online and sought to register the “connectingnyc.nyc” domain name with with Network Solutions: https://newtlds.networksolutions.com/Home/Browse/nyc?inputSld, one of the 21 official registrars selling .nyc domain names.
  • There I was told it would cost me $79.98 to submit an application ($39.98 for the Application Fee and $39.98 for the one year name registration) for the domain name.
  • I learned that there’s no way to register and begin using that name now. I must wait until after October 3 to see if others might also have applied for the domain name.
  • If by October 3 no one else submits an application for the name, it’s ours. We will then be able to use it immediately.
  • But… if someone else puts in a bid on the name by October 3, we must participate in and win a high-bid auction if we hope to use the name within the .nyc TLD.
  • That auction might not be too difficult for connectingnyc.nyc - it’s a confusing and a lousy domain name (IMHO). But for a domain name such as “connecting.nyc” this auction could cost us thousands, perhaps tens of thousands of dollars. (Which we don’t have.)

Two recommended improvements…

There are two ways this system can be improved to aide us and all city businesses and organizations.

1. London Priority Period Rules - Adopt the process London is using in allocating their .london domain names. London’s Local Priority Period Rules (LPP) gives preference to existing entities. In our case, if the city adopted LPP-like rules, we’d be able to upload a copy of our NYS business certificate and get preference over someone without such prior use documentation. That seems fair. (We’ve put together a draft of a New York Landrush Priority Rules here.)

2. Open Auction - There will still be instances where two entities have equal historic rights to a name - i.e., perhaps there’s another business using “connecting” in their name here in the city. In that instance the current plan is to hold a high-bid auction to choose among multiple bidders for who gets the right to use the name. But rather than the current blind auction - where the bidding entities are not put in contact with one another - we propose public auctions.

Public auctions are a method ICANN used in choosing between multiple bidders for TLDs (e.g., there were 6 bidders for .music). This will enable discussions and possible collaborations between the interested parties, potentially saving thousands of businesses thousands of dollars.

Your assistance in advocating for these changes will be greatly appreciated by Connecting.nyc Inc. and our city’s hundreds of thousands of small mom and pop businesses, civic organizations, artists, and others in danger of loosing their traditional names.

Thank you for your attention to this matter.

Sincerely,

Thomas Lowenhaupt

———————————————-
Thomas Lowenhaupt, Founder & Chair
Connecting.nyc Inc.

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Allocation Policys, Auctions, Domain Names, Name Allocation Policy

A Report Card

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Jackson Hts., New York, August 3, 2014 - Not too long ago my wife dug up a Report Card of mine from 1954. While I’ve had quite a few since - some better some worse - on this eve of the .nyc Landrush I thought it might be fun to issue another that assesses my work on the .nyc TLD.

But what to assess? I could base it on the 2001 Internet Empowerment Resolution, which set my original course on .nyc, and claim an A grade. After all, the city has acquired .nyc and will run it as a public interest resource. “Great work Tom.”

However, it’s 2014 and 13 years have elapsed. Over the last decade, as the ICANN’s new TLD award processes were evolving, my research uncovered broad areas where a city-TLD could facilitate a city’s operation: portals, markets, identity, security, privacy, economic development, civic and neighborhood betterment, and more. A fair assessment should consider how well those findings were reflected in .nyc’s structure.

Had this assessment taken place in 2009 high marks might have been in order, for when the city issued its Request For Proposals it included many of our findings in the requirements.

But the ICANN’s planning dragged on, and our research continued. And I recall speaking with a city official in 2012 about recent findings. Frustrated, he chided me for continuously raising the bar: “We’ve done everything you asked for. We can’t keep changing things. Be realistic.”

[Let me pause here for a moment to point out the transition from “I” to “we” in the previous paragraph. This was a collaborative endeavor with my work enabled by a plethora of others. First there were my fellow community board members who listened and trusted that a city-TLD was important. There was the gentleman from Germany who goaded me in 2005 to reengage after a two year hiatus; a top TLD lawyer from Florida who guided me for several years; a board of directors who steered and encouraged me; a family that put up with this massive time eater; good friends who encouraged and criticized me; individuals and organizations that backed our effort with digital and financial resources; software engineers and other experts who advised; smart people in the DNS industry who taught me the ins and outs; city officials who strove to make the effort a success; and more. So I’m changing the nature of this assessment to one that looks at the overall city-TLD development process and its outcome. As to my personal Report Card, my work was far from perfect. Had it been better, our city-TLD would likely have provided more nuanced and beneficial features and benefits. But I’d like to think that I improved somewhat from my 1954 B in Effort.]

Before getting into the assessment, one final note on the city-TLD development environment. As the details of .nyc’s roll-out becomes clear, it’s increasingly apparent that we’ve been operating in what the economists call an “asymmetric knowledge” situation. This occurs where there’s inadequate expertise for one side to call upon in a negotiation. With this the first time cities have had the opportunity to develop their TLDs, the metric presented for comparison by the knowledge holder, the contractor, was name sales, not an improved quality of life. As a consequence, New York and the other cities applying for their TLDs were unprepared to evaluate the spectrum of opportunities presented. For a parallel situation see The Simpsons episode Marge Vs. The Monorail.

So, how did WE do?

I’ve rated 12 policy and operational criteria below. While the policies guiding these were selected during the Bloomberg years, the grades test against the current administration’s tougher “progressive” standards. The results show room for improvement. Note: Some digging into the Links might be required to uncover the basis of our suggested remedies.

            The Report Card

Subject Grade Explanation Remedy Links
Nexus C Inadequate pre-registration review. Post registration enforcement. Public pays for challenges. Expand P.O. Box description to include virtual office. Pre-registration review. More spot checks. City led challenges. More
Market Creation Inc. No sign of development of local markets. Many generic names reserved, so the potential exists for new local markets. More
Name Distribution Equity F City rejected NYS Trademarks and d/b/a names of current business and organization owners as basis for selection priority. Institute London’s Local Priority Preference process enabling existing businesses and organizations to get the names they now use. More
Landrush Auctions F No prior use preference. A regressive high-bid blind auction policy to resolve name contention. 60% of revenue flows to contractor in Virginia. Give priority to existing name users. Run Applicant Auctions that put name contestants in touch with one another. More
Sustainability D No expressed sustainability policy or programs. Third level name use in dotNeighborhoods effort is saving grace. Establish programs enabling sharing and pricing policy that promotes recycling of names. More
Local Jobs D No new registrar jobs created in city. Saving grace: you can request info on becoming registrar Train and ease entry for local registrars. More
Consumer Friendly C Complex and circuitous complaint process - city, ICANN, contractor, and At-Large have roles. Centralize complaints. Assure refund for Landrush auction losers. Create a City of Trust More
Governance D Closed (?) city advisory board. Create channels for public engagement. More
Government Names B+ The de Blasio Administration has acquired hundreds of names to foster city operations. More transparency and public engagement in name selection would have earned an A. More
Neighborhood Names B+ Traditional neighborhood names have been reserved for licensing to local residents. Dedicate funding for endeavor. More
Premium Names Inc. Regressive high-bid auctions for 2,000 names such as news.nyc, sports.nyc, pizza.nyc, doctors.nyc, etc. Premium names should have public interest clause. Hold public forums to create awareness and opportunity for local collaborations. More

 

Looking toward my next Report Card, I expect it to evaluate work being done outside the realm of the .nyc TLD. I’ve begun participating on an ICANN discussion group setting the criteria for future applicants for city-TLDs. The key concept is that cities will need to demonstrate they are TLD-ready by showing Informed Consent, rather than the current “Non-objection.” As well, they will need demonstrate engagement of the user community in creating these applications through the formation of At-Large Structures. Finally, the mass of materials we’ve assembled over the years will be organized into an accessible resource library. Success in those areas will require an A in effort.

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Allocation Policys, Auctions

,

Going once. Going twice… The .nyc auctions

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­Jackson Hts., New York, July 29, 2014 - With the .london Landrush ending on Thursday, “30 applications for the properties.london address and over 40 for nightlife.london” have been received (see V3.co.uk/) with an auction to decide the recipient. What? Let me try to unbundle that statement.

Over the past 50+ days anyone with $75 to invest (see GoDaddy’s rates) has been able to buy a lottery ticket of sorts for a domain name within the .london TLD. With the July 31 deadline to apply for a .london domain name nearing, 30 people have purchased tickets for the “properties.london” lottery, and 40 for the “nightlife.london” lottery. By midnight on July 31 more than 50,000 different domain names are expected to have been applied for overall, with several thousand names having multiple bidders.

In London…

The operator of the .london TLD has established priority rules to sort out those instances of “multiple-applicants for same name?” Here’s how it works.

  • Getting first priority are those with a registered international trademark. If more than one entity has a trademark, for example, Cadillac cars and Cadillac foods, then a high bid auction is held to determine the winner.
  • Second priority goes to ticket holders with a valid London address and an established right to a name. For example, a business can upload “evidence” to demonstrate its current use of a name, and thus right, to a parallel .london domain name. Within this Second Priority several sub-categories have been established: In descending order of priority those are: entities with local trademarks, businesses without trademarks, charities, and those with unregistered trademarks. Again, if more than one entity presents evidence of prior use in a sub-category, for example, cadillac.com and cadillac.net, a high bid auction sorts things out.
  • Third priority goes to those applicants with a valid London address, but no prior use of the name.
  • Final priority (if that’s the right word) goes to applicants without a valid London address, a New Yorker for example who wants to own a piece of digital London. In these last two instances it’s an auction that breaks a tie.

In New York…

Here in New York we’re doing things differently. There’s no value to having used a name for years or decades. And it doesn’t matter if you’ve registered it with the state - neither a New York State trademark nor d/b/a counts.

Excepting those with international trademarks, local businesses and non-profits have no more right to a name than anyone else. The Bloomberg Administration, which established the rules, made the decision to start the naming process all over again on a level(ish) playing field.

So between August 4 and October 3, if you like a name, buy a ticket (it will cost you about $75). Then out bid the current owner (and possibly other ticket holders) at auction, and its yours. But you may get lucky - the current owner might not even know the .nyc TLD is being introduced, and not buy a ticket. In that case, no auction, it’s yours.

So what happens when 30 tickets are sold for a domain name such as properties.nyc? “The auction will be held in accordance with the auction rules… Any auction fees, charges and the final bid price for the domain name will be the responsibility of the Applicant.” A regressive process that promotes the status quo.

This Bloomberg legacy process is slated to move ahead. For the administration it’s the easy, fast, and cheap allocation process. But if you believe as I do that it’s unfair, call 311 and tell Mayor de Blasio -  è ingiusto.

For our older posts 2007-2014 see here.

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Uncategorized

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