In a paper published this week, the OECD went as far as to suggest an auction would be a good way to decide who should get to run the .net domain, after VeriSign Inc’s contract to do so elapses next year. VeriSign is said to be against the idea.
There seem to be few, if any, obstacles to ICANN auctioning the right to be the registry responsible for .net, the paper concluded. Indeed, there would be clear and demonstrable benefits in meeting the objectives set by ICANN.
The 55-page Generic Top Level Domain Names: Market Development and Allocation Issues report, a detailed economic study of the market, said that auctioning would help gTLD allocation be more transparent than the beauty contest method.
ICANN selected seven new gTLDs to be added to the internet’s root as a testbed in late 2000. Of the seven, the four open, unsponsored namespaces have not been especially successful, and one of them is not yet live.
The method used to select these registries was criticized as being arbitrary. The final decision process amounted to a rambling discussion, rather than a comparison of applications against predetermined objective criteria.
ICANN recently opened up the .net contract for rebid. VeriSign, which has been running it for as long as the internet has been popular, will reapply, and is already lobbying hard to make sure the selection criteria favors the incumbent.
ICANN has said that in the selection procedure it will look at technical qualifications, but will also favor applicants that will offer domains at a low wholesale price. The OECD report says the auction method would not necessarily lead to higher prices.
The report said: Auctions would not lead to higher prices for domain name users. Prospective operators of new gTLDs would be aware of current pricing levels, and the potential entry of other new operators, and factor that knowledge into their bids.
