As we prepare for the ICANN 51 meeting, I thought it would be a good idea to address a couple of key points regarding contention set resolution and ICANN-facilitated auctions. Although the ICANN-facilitated auctions have received a fair amount of attention in recent weeks, the vast majority of contention sets are being resolved amongst the applicants, rather than through ICANN-facilitated auctions. Proceeds from the auctions are being segregated until an appropriate use of the funds has been determined by the Board with input from the community.
For those who may not be immersed in the New gTLD Program, we define a contention set as a group of two or more applications for the same or confusingly similar strings. A total of 233 contention sets were identified across all applications.
Since the New gTLD "reveal day" in June 2012, roughly 50 percent of the strings in contention have been resolved. Only eight of the sets have resolved by way of an ICANN contention resolution process; four sets were resolved through the program process of Community Priority Evaluation (CPE) and four sets via an ICANN-facilitated auction. It's important to remember that the auctions are intended to be a method of last resort to resolve contention, and ICANN expected a very small number of auctions to actually come to fruition. ICANN continues to encourage applicants to resolve contention among themselves, and allows for self-resolution up to seven days prior to an auction.
An interesting effect of scheduling and holding auctions has been the increase in the pace of self-resolution among contention sets. Since the first auction in June 2014, over 40 contention sets have self-resolved in the last four months, compared to about 70 sets over the first 24 months of the program. With auctions scheduled [PDF, 249 KB] on a monthly basis, we expect this trend to continue.
Finally, I want to review how ICANN will handle the proceeds generated by the auctions. While the number of auctions held thus far has been small, and the number of auctions we anticipate will be conducted in the future is also relatively small, the total value of the proceeds from the auctions may be considerable. The most recent auction for three strings generated over $14 million in gross proceeds. I want to reiterate that the proceeds from Auctions are being segregated until the Board, through consultation with the community, determines a plan for the appropriate use of the funds. To provide further transparency, we have created a new financial summary page on the New gTLD Program microsite. This page details the proceeds, as well as the costs of Auction operations, which are to be paid from the proceeds. The financial summary will be updated on a monthly basis as the costs and proceeds are realized. More detail about the costs of auction operations can be found in the summary of the Statement of Work [PDF, 112 KB] with the auctions provider, Power Auctions LLC.
If you have any questions about contention resolution, please email our Customer Service department at customerservice@icann.org, or if you're joining us in Los Angeles for ICANN 51, come by to see us at the GDD booth. We look forward to hearing from and/or meeting you!