DSTI/ICCP/TISP(2004)2/FINAL 
needs to be said that high prices in relation to the introduction of new gTLDs could have this impact under 
any allocation mechanism, including comparative selection. It is true, however, that in maximising revenue, 
auctions may be at a disadvantage in relation to comparative selection where specific prices can be set. On 
the other hand, any registry needs to be adequately resourced or it is unlikely to attract users. At the same 
time, if ICANN developed criteria that extended beyond the technical co ordination of the Internet, in 
relation to widening participation, this might be addressed in other ways such as the design of the auction. 
One or more places, for the responsibility to operate a registry, might be reserved by region, or eligibility 
determined through other criteria (
e.g.
 firms located in countries with a low GDP per capita). Moreover in 
maximising revenue auctions could, in fact, provide resources to create a registry or to fund training and 
skills development in developing countries.  Indeed, precisely because of their ability to maximise revenue 
auctions may provide a tool which has greater potential for inclusiveness than comparative selection. That 
being said, the question which needs to be asked is whether creating gTLDs reserved for developing 
countries would be the best use of such resources. What needs to be remembered is that each country has a 
ccTLD and it might be better to allocate resources to capacity building among those domains. On the other 
hand, it might be possible for some gTLDs to complement the operations of ccTLDs. If ccTLD registries in 
a particular region form a partnership, as occurred with the proposed 
.asia
, this can potentially provide an 
additional choice for users and generate revenue for ccTLD operators acting as registrars or as shareholders 
of a registry. 
Unspecified strings may present problems 
An auction essentially provides a greater role for the market than a comparative selection process. A 
purely market based outcome, in the case of string selection, may be controversial. The highest bidders, in 
the case of unspecified strings, might be for areas of economic and social activity that would not be ranked 
highest by a comparative selection process. At the same time strings that might be considered unacceptable 
or inappropriate by some sections of the Internet community could emerge as the winners. As such, in the 
case of an auction where the strings were decided by successful bidders, guidelines would need to be 
specified on what type of strings would be appropriate or unacceptable. This would be necessary to allow 
bidders to factor this information into their bids. This would, undoubtedly, be a challenging task given 
social and cultural differences that exist throughout the Internet and wider global community. Some 
guidelines do exist. The ICANN Government Advisory Committee Principles for the Delegation and 
Administration of Country Code Top Level Domains, in the creation of new generic TLDs, recommends 
avoiding well known and famous country, territory or place names; well known and famous country, 
territory or regional language or people descriptions; or ISO 639 Codes for representation of languages 
unless in agreement with the relevant governments or public authorities. 
As the creation of a proscribed list of names is almost certainly unviable some judgement must be 
exercised. A pre qualification procedure, which included the selection of strings acceptable to the Internet 
community, in combination with an auction to determine the final allocation, could deal with any political, 
commercial or social concerns equally as well as a wholly comparative selection procedure. Moreover, 
whichever allocation mechanism is chosen, it still needs to be complemented by contractual oversight by 
ICANN. The operation of registries can and does change hands and obligations entered into by the 
contractual parties need to be enforced to ensure public accountability.  
Intellectual property concerns should not be a major issue if guidelines were crafted in consultation 
with WIPO. There would need to be procedures to ensure that any strings proposed, in such an auction, 
would not clash with intellectual property rights. In some cases, however, this may not be clear cut. 
Challenges might arise, for example, where multiple firms believed they had some type of right relating to 
a particular string even if it was a generic word.   
 46 




  

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