[ga] OECD supports TLD auctions

[Danny Younger <dannyyounger@xxxxxxxxx>]

About a year and a half ago, Milton Mueller posted
this note to ICANNwatch on the topic of allocation
methodologies:

"In an important contribution to the TLD debate, the
OECD has released its report on generic TLDs.  The
report, authored by economists Sam Paltridge and
Masayuki Matsui for OECD's Working Party on
Telecommunication and Information Services Policies,
is highly diplomatic. It praises ICANN for its role in
fostering registrar competition and is careful to
identify what decisions should be left to ICANN (how
many TLDs, which TLDs). 

But there's no way around the fact that OECD gently
kicks ICANN in the rear regardings its procedures for
adding new TLDs or reassigning old ones. The report
ever-so-nicely suggests that ICANN's subjective
comparative hearings (more accurately known as "beauty
contests") should be scrapped and replaced with
auctions.
 
Auctions, the report pointedly notes, are more
equitable and transparent, make better use of
information and expertise resident in the bidders,
avoid corruption, and generate revenue. Does this
sound familiar? The report suggests that the
reassignment of .net offers an almost perfect economic
case for using auctions.
 
"The market should, therefore, be in a better position
than ICANN to judge the demand for new TLDs. In the
situation where ICANN needs to make an allocative
choice on a gTLD, with prescribed string, such as
.net, an auction would enable firms to reveal, via
their bids, the expected value of this resource. Based
on revelation and use of information, Economic theory
would suggest that the most efficient operator would
outbid the less efficient operators." 

The report sees that there could be a continued role
for "pre-qualification" of eligible bidders, but
insists that any pre-qualification procedures be
neutral, transparent and objective. 

The OECD report also contains a useful and thorough
analysis of current market conditions with respect to
demand for new TLDs.
 
http://www.icannwatch.org/articles/04/07/13/1732221.shtml
 
http://www.oecd.org/dataoecd/56/34/32996948.pdf

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