DSTI/ICCP/TISP(2004)2/FINAL 

auctions and comparative selection, to encourage broader discussion. In contrast, for those resources that 

are already in existence, and precisely defined, firmer advice can be proffered. 

On balance, where scarcity exists the economic arguments favour the use of auctions in some form, in 

relation to the goals set by ICANN for allocation procedures. They are particularly strong in relation to 

allocation decisions related to existing names and where a `tie breaker' is needed during a comparative 

selection procedure for a new name. In all cases where auctions are used, the best elements of comparative 

selection procedures could still be incorporated at a pre qualification stage using straightforward, 

transparent, and objective procedures that preserve the stability of the Internet. Pre qualification 

procedures, prior to the use of auctions, as a final allocative step for new names, could deal with concerns 

that a standalone auction might otherwise engender among the Internet community. The choice to be made 

by ICANN does not have to be purely one process or another but could be a combination of auctions and 

pre qualification. 

Most concerns that might apply to using auctions as a tool to allocate new gTLDs do not apply to any 

decision on the future allocation of existing gTLDs. For example, there seem to be few, if any, obstacles to 

ICANN auctioning the right to be the registry responsible for 

.net 

as an adjunct to pre qualification 

procedures.

Indeed, there would be clear and demonstrable benefits in meeting the objectives set by 

ICANN. An auction would provide a transparent and verifiable mechanism for the market to value 

.net

appropriately and avoid the pitfalls associated with comparative selection. Such an auction could also act 

as a practical demonstration, for auctions, in relation to other allocative choices as and when they arise. 

A further issue ICANN could consider is whether the division between registry and registrar needs to 

apply to relatively small sponsored top level domains. One option would be to create a threshold number of 

registrations below which registries would have the option to sell second level domains, direct to their 

community, with appropriate safeguards. An example would be to allow 

.museum

 to market directly to 

their community. 

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