DSTI/ICCP/TISP(2004)2/FINAL 

conditions built into their award and bidders will take these into account in the price they are willing to bid. 

The main difference, however, is that with auctions it is necessary for the seller to specify such conditions 

whereas with comparative selection the onus is on prospective registries to specify what they will do. The 

degree of weight to give this factor essentially depends on whether ICANN has objectives that go beyond 

its primary role of technical co ordination. ICANN's contract with the registry is the tool with which to 

enforce any such obligations irrespective of which allocation procedure is used in their determination. 

Disadvantages 

Revelation of information 

Most of the information needed to evaluate prospective registries is privately known. Some 

information may be publicly known, be observable and verifiable but this process can be open to 

manipulation. Auctions have the advantage of forcing firms to reveal information through the price they 

are willing to pay as, in theory, more efficient firms should be willing to pay higher prices. A comparative 

selection process which gave the greatest weight to the lowest maximum price, a registry undertook to 

charge registrars, may counter this point.  

Lack of transparency 

In most comparative selection procedures the final decision to award a resource is based on 

evaluations done in private. ICANN is somewhat an exception to the rule. Although the initial evaluations 

were undertaken in private the final discussion, leading to decisions by the ICANN Board, is a matter of 

public record.

58

 In general one of the drawbacks of the comparative selection decision making process is 

that it does not have an observable or verifiable action such as bidding. ICANN endeavoured to overcome 

this shortcoming by publishing an initial assessment of proposals for new gTLDs by its staff and experts, 

as well as putting its own final decision making discussion on the public record. This is possibly as 

transparent as a comparative selection procedure can be. On the other hand justifying a decision may be 

complicated if some of the criteria used are subjective and not clearly stated in advance. The maximum 

price registries propose to charge to registrars is one verifiable criterion which can be used in a 

comparative selection procedure. 

Reliance on subjective judgement 

In ICANN's first round of new gTLDs subjective judgements were applied during the comparative 

selection procedure. This is readily evident from the public record of the final decision making process. 

While comparative selection may have had advantages at the, so called, `proof of concept' stage, there are 

drawbacks in terms of meeting ICANN's goal of having `objective procedures' for the routine allocation of 

resources.  

Lower registry prices may bring about unintended consequences 

In its report on designating a successor operator for the 

.net

 registry, ICANN's Generic Names 

Support Organization recommended that once other criteria from the comparative selection process are 

satisfied, preference should be given to proposals offering lower pricing for domain name registration.

59

 As 

noted this would provide a mechanism which would be readily verifiable and therefore increase 

transparency of any comparative selection procedure. It may in theory bring benefits to users in the form of 

 50