High-Bid Auctions Deflate the .nyc TLD

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stoptheauctionsJackson Hts., New York, October 27, 2016 – Our hope for an intuitive and trusted .nyc TLD took a hit today when 20 domain names were sold to 10 bidders in city’s first high-bid auction. While the city refers to these as “premium” names, we think of them as heritage names. With our city-TLD’s success predicated on its utility and predictability, this first of perhaps 25 auctions bodes poorly on its chances. More on that in a bit, but first some details on the auction.

The big winners (using their bidder names, the only ones available), were nameinvest and motionx with 4 properties each. Top dollar was spent by changejobs who purchased apartments.nyc, condos.nyc, and realestate.nyc laying out a total of $42,065. The bargain of the day went to hoofhearted who purchased roommates.nyc for $69. In total, more than $68,000 was bid. Here are the auction results:

  • Apartments.nyc
  • 58 bidders
  • winner: changejobs
  • $16,155
  • Construction.nyc
  • 28 bidders
  • winner: anasacebaruzzi
  • $500
  • Kitchen.nyc
  • 23 bidders
  • winner: motionx
  • $2,000
  • Renovation.nyc
  • 22 bidders
  • winner: nameinvest
  • $690
  • Brokers.nyc
  • 32 bidders
  • winner: nameinvest
  • $1,908
  • Furniture.nyc
  • 24 bidders
  • winner: motionx
  • $2,508
  • Lease.nyc
  • 24 bidders
  • winner; breadsticlk
  • $4,100
  • Roommates.nyc
  • 23 bidders
  • winner: hoofhearted
  • $69
  • Brownstones.nyc
  • 23 bidders
  • winner: luckbealady
  • $530
  • Garden.nyc
  • 22 bidders
  • winner:: motionx
  • $1,021
  • Living.nyc
  • 24 bidders
  • winner: greenappletree
  • $2,650
  • Rentals.nyc
  • 48 bidders
  • winner: guyg
  • $5,700
  • Condos.nyc
  • 41 bidders
  • winner: changejobs
  • $4,610
  • Homes.nyc
  • 37 bidders
  • winner: motionx
  • $3,200
  • Lofts.nyc
  • 29 bidders
  • winner: odash
  • $1,200
  • Studios.nyc
  • 27 bidders
  • winner: nameinvest
  • $1,008
  • CoOps.nyc
  • 23 bidders
  • winner: hoofhearted
  • $520
  • Interiors.nyc
  • 22 bidders
  • winner: nameinvest
  • $500
  • RealEstate.nyc
  • 60 bidders
  • winner: changejobs
  • $21,300
  • Sublet.nyc
  • 24 bidders
  • winner: guyg
  • $560

Using market metrics, the city can point to some positive results…

  • The auction winners now have the opportunity to develop these 20 domain names.
  • Someday soon some new websites might emerge and improve our lives. And if they are successful, add some jobs and taxes to our economy.
  • The city and several intermediaries will receive some revenue.

But the negative impacts are far more numerous and consequential…

Let’s explore this proposition by looking at this auction’s effects on a developer shopping for a domain name, and a typical New York internet user. From a developers perspective, with more than 1,000 TLDs to choose from, why choose one from the .nyc TLD? What makes it a better choice than a .com? Or selecting a descriptive TLD: a .lawyer for someone starting a law practice? And from a New Yorker’s perspective, what difference does it make if s/he receives predictable results from our city’s TLD?

The answer to all these questions is trust. While there are several factors that engender trust, to a large degree, it emerges organically from an intuitive TLD. Trust is engendered when one types a domain name and arrives at the expected resource. The simplest and quickest way for the .nyc TLD is to become trusted, is by setting standards that encourage an intuitive name space.

Let me detail the ways the high-bid auctions damage an intuitive and trusted TLD.

  • First, these are heritage names with a meaning that exists in the heads of New Yorkers. They should be providing the base for a more intuitive Internet both for New Yorkers and those seeking our resources. To the extent that they’re not part of an intuitive guidance system, they diminish the reliability of our city’s TLD.
  • Without public interest commitments guiding their use, city residents may utilize these names only at the whim and will of the auction winners.
  • Without public interest commitments, the winning bidders may use them for non-conforming use. The winner of Brownstones.nyc can use the name for a bar, a band, or whatever. If Brownstones.nyc doesn’t tell tourists about our brownstones, it reduces consistency and damages the TLD.
  • Without public interest commitments, selling development rights to our heritage names is like giving control of our street signs to an advertising agency.
  • Without public interest commitments, the winners may leave the names idle, or “parked” in industry parlance. More than 1/2 of .nyc names are currently parked or without content.

Having established public interest commitments for the neighborhood names, and benefited from its 200 year experience with street grids – predictability and ease of navigation – I find it disheartening that the city government has not chosen to follow the winning pattern.

If the auctions continue as is, they will discourage direct, intuitive (type-in) access, making New York’s resources less accessible – finding them will require a search engine. This will diminish our capacity to shape our city and shift it into the hands of Google-like entities.

Beyond its impact on the viability of our TLD, the de Blasio Administration is missing the opportunity to fulfill its commitment to foster opportunities for minorities and women. While the city has indicated a willingness to make some reserved names available for public interest uses, its resource commitment to advance the idea has been inadequate. Similarly, the promised 30 day notification for these heritage auctions doesn’t provide an adequate opportunity to organize hackathons and other networking events that might enable innovative ideas to emerge from our disparate communities.

#StopTheAuctions

This was the first of what might be 25 high-bid auctions for 500 heritage names. The city should stop the auctions and take steps to improve this phase of the name allocation process. Allocating 500 heritage names without associated Public Interest Commitments will cripple .nyc’s intuitive operation, diminish public trust, and reduce the utility and usage of our city’s TLD.

We’ve made several improvement recommendations in a previous post. Today we’re recommending that the city cancel the auctions, and negotiate a settlement with the contractor for its expected revenue. Auction #1 has provided a basis for estimating that settlement.

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Thomas Lowenhaupt is the founding director of Connecting.nyc Inc., a NYS nonprofit education organization advancing the operation of the .nyc TLD as a public interest resource. His 2001 Internet Empowerment Resolution sparked the city’s acquisition of the .nyc TLD. Two years ago the Internet Society of New York and Connecting.nyc sponsored a panel on the allocation of these “premium” domain names. See a report on that meeting here.

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#StopTheAuctions

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stoptheauctionsJackson Hts., New York, October 5, 2016 –  There were highs and lows in city hall’s rollout of the .nyc TLD last month. Early on we were cheered when we received notification that our application for the JacksonHeights.nyc domain name had been approved. And with the de Blasio Administration committed to putting the city’s 350+ neighborhood domain names under the control of local residents, we began to imagine that our decade-old vision of an “intuitive” city Internet might materialize; where one would find informative presentations of our city’s art galleries at artgalleries.nyc, find banks at banks.nyc, and locate a church at churches.nyc. And with each such directory a bonus would arrive: the opportunity for a New Yorker to form a new small business.

But our confidence plummeted when the city’s contractor announced that a high-bid auction was to be held on October 24 for 20 domain names:

  • Apartments.nyc
  • Construction.nyc
  • Kitchen.nyc
  • Renovation.nyc
  • Brokers.nyc
  • Furniture.nyc
  • Lease.nyc
  • Roommates.nyc
  • Brownstones.nyc
  • Garden.nyc
  • Living.nyc
  • Rentals.nyc
  • Condos.nyc
  • Homes.nyc
  • Lofts.nyc
  • Studios.nyc
  • CoOps.nyc
  • Interiors.nyc
  • RealEstate.nyc
  • Sublet.nyc

These are the first of what might ultimately be 3,000 auctioned names, many of which are vital to the realization of that intuitive city and the utility of the TLD.

The basis of our disappointment is epitomized by the hotels.nyc domain name. It’s reasonable to assume that, in a high-bid auction, an entity such as the Hilton Corporation, with deep pockets and 30 hotels in or near the city, will win. When this occurs two associated outcomes can be predicted with reasonable certainty: a traveler looking to hotels.nyc for a city hotel would assuredly be provided with a highly skewed view of the city’s 250+ hotels (a Hilton perhaps?). And a comprehensive listing of hotels, perhaps creatively mixed to include an AirBnB-like listing, fashioned by a local entrepreneur will never materialize.

With our being awarded the license for JacksonHeights.nyc, we have a big stake in this development: If people come to believe that hotels.nyc and other such civic infrastructure names are in essence offering “biased directories,” what hope is there that they will come to trust that JacksonHeights.nyc presents the considered and collaborative intelligence of its neighborhood namesake?

To summarize, the city has established a workable model to guide the allocation of the neighborhood names, requiring detailed public interest commitments (PICs) from those interested in the rights to their development. Further, those awarded neighborhood name must return every three years to demonstrate they’ve met their PICs. In contrast, the plan for auctioning hundreds, perhaps thousands of these civicly important names does not require any PICs from the auction winners. And there’s no review process whatsoever, with the names issued virtually forever.

#StopTheAuctions

If the city sticks with the high-bid auction (a holdover from the Bloomberg Administration), several negatives will result.

  • Our opportunity to establish .nyc as a managed and trusted TLD, a safe port if you will, will be severely diminished.
  • We’ll loose the opportunity to provide access to these new resources to capital starved entities. The local flavor and creativity will suffer.
  • We’ll loose an opportunity to bolster our digital self reliance. We’ll remain dependent on distant search engines to filter and present our digital resources.

The city should stop the auctions and follow these steps to improve the name allocation process.

  • City Hall should establish a public policy that facilitates the identification and development of civicly valuable domain names.
  • Considering the economic and aggregation benefits that arise with a well managed and trusted digital resource, it should categorize the 3,000 names: those that can be auctioned immediately, names for negotiated allocation (like the neighborhood names), and names that have PICs and are destined for high-bid auction. (Here’s a start.)
  • The city’s Department of Small Business Services should do outreach to small and minority businesses and empower them to participate in these auctions by sponsoring hackathons, networking events, loans, credits…

The city should begin governing the .nyc TLD as a common that belongs to all New Yorkers. While Mayor de Blasio has taken some commendable steps, e.g., the neighborhood names and a nexus policy that restricts ownership to New Yorkers, success requires an investment. The city should immediately re-establish its .NYC Community Advisory Board and enable meaningful public engagement in the auctions, and deal with issues such as abandoned names, idle names, WHOIS, rates, and consumer protections.

Longer term, the city charter needs to be revised to reflect the Internet’s existence.

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Thomas Lowenhaupt is the founding director of Connecting.nyc Inc., a NYS nonprofit education organization advancing the operation of the .nyc TLD as a public interest resource. His 2001 Internet Empowerment Resolution sparked the city’s acquisition of the .nyc TLD. Two years ago the Internet Society of New York and Connecting.nyc sponsored a panel on the allocation of these “premium” domain names. See a report on that meeting here.

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Workshop: Empowering New York City’s Neighborhoods

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Neighborhood Preservation Center

This event’s report is now available.

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March 8, 2016, Jackson Hts., New York – The de Blasio administration has initiated a program to license operators of the 385 neighborhood domain names: Astoria.nyc, Bensonhurst.nyc, Corona.nyc, Ditmars.nyc, Egbertville.nyc, Flatbush.nyc, GreenwichVillage.nyc, Harlem.nyc…

On Tuesday, March 22 at 7 PM we’re sponsoring a workshop to review that licensing program and explore ways to connect the independent operators of these civic media centers. Here’s the agenda:

  • Update on the city’s neighborhood domain name licensing program.
  • Share experiences and expectations of license applicants.
  • Structure and Voice: What organizational structure will best enable operators of these “dotNeighborhoods” to share best practices and be represented before city and other regulatory entities? How can these operations collaborate to create open-source modules such as ad collaboratives, bulletin boards, calendars, DNS allocators, etc?

One outcome might include the formation of an Alliance of of Neighborhood Media Centers to develop principles, policy positions, and best practices.

Where: The Neighborhood Preservation Center, 232 East 11th Street
When: Tuesday, March 22, 7:00 – 8:30 PM

Light refreshments will be provided. Reserve a seat by emailing [email protected] or using our Meetup reservation page.

Can’t make it? The meeting will be recorded by our co-sponsor, the New York Internet Society.

Note: Interested in operating a neighborhood name? Begin your exploration on our beginners guide Adding Internet Mojo To Neighborhoods.

This event’s report is now available.

 

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Neighborhood Name License, part 2 – Content Restrictions and their Chilling Effects

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neighborhoods with prohibited symbolJackson Heights, New York, February 7, 2016 – The draft Licensing Agreement for the city’s neighborhood domain names has several significant limitations. In a previous post we wrote about a “Without Cause” clause that allows the city to withdraw the right to use a neighborhood domain name at its whim – without explanation and without cause. We opined about this limiting the ability of a developer to garner the resources necessary to create an effective dotNeighborhood.

Today we’re focusing on more substantive problems, content limitations presented in the draft Licensing Agreement. There, in Exhibit B, the Acceptable Use Policy, one finds “Prohibited Content,” which details a dozen restrictions on categories of information that can be presented. We have serious problems with five of them.

Prohibited Content #1: “campaign-related materials or partisan political materials;”

We’ve always imagined the dotNeighborhoods as significant new venues for presenting and considering the qualification of candidates for elective office. Who better knows the needs of the neighborhood and the qualification of candidates than the neighbors~voters?

The first problem with the campaign prohibitions is the lack of definitions. What is “campaign- related” and “partisan?” Is there an impartial watchdog to enforce it? Who appoints its members? How are violations enforced?

But perhaps we should take a different approach. If we’re trying to create a better democracy, keeping money from polluting the candidate selection process, which we do very well here in New York City, perhaps the Licensing Agreement should require that dotNeighborhoods maintain a “campaign zone” where election materials can be posted free, or for a nominal fee. The license might also require that when elections approach these zones provide a prominent space on the dotNeighborhood’s home page announcing “It’s Election Time” and provide links to candidate promotional materials. There might be some restriction on the nature of the materials – for example, length limitations on video materials – intended to level the playing field by reducing the necessity for significant investment.

Prohibited Content #2: “offensive sexual  material, as described in New York Penal Law § 245.11, as it may be amended from time to time and/or material that contains image(s) of a person, who appears to be a minor, in a sexually suggestive dress, pose, or context;”

We don’t have a problem following the prescriptions of the state penal law, but when the prohibition gets into the “and/or materials” that extend its reach, we get concerned. We wonder who is going to determine the type of dress, pose, or content that is suggestive. Who is it that selects these censors? What are their qualifications? What penalties may they impose? And who sets the rules they are to follow?

Prohibited Content #3: “words that match, contain recognizable misspellings of or are otherwise recognizable variations of any of the seven words identified in Federal Communications Commission v. Pacifica Foundation, 438 U.S. 726 (1978);”

Here the city imagines that the 7 filthy words and their variations are going to be hidden from the tender eyes and ears of youth. Here again definitions are a problem – “recognizable variations?” And what’s the remedy and who enforces it? Must the operators of the dotNeighborhood keep a vigilant eye on every comment posted?

And beyond the spirit offered here, isn’t it a bit silly for New York City to proscribe the words its residents use? The “Filthy Words” pertain to a national broadcast TV standard, not what New Yorkers say on their neighborhood websites. Let the First Amendment rule here.

Prohibited Content #4: “promotes unlawful or illegal goods, services or activities;”

Obviously we don’t want the dotNeighborhoods promoting illegal activities. But does livestreaming a non-permited rally constitute promoting an unlawful activity? Must the operator of a dotNeighborhood keep watch over all posted content, checking for parade permits before allowing a link? Again, a problem with definitions and regulatory enforcement.

Prohibited Content #5: “image(s) or information that demean an individual or group of individuals, on account of actual or perceived race, creed, color, national origin, gender, sexual orientation, age, whether children are, may or would be residing with such victim, marital status, partnership status, disability, or alienage or citizenship status as such categories are defined in § 8-102 of the Administrative Code of the City of New York (as it may be amended from time to time) or, for those categories not there defined, as they are commonly understood;”

Again, this is well intended, but adding the concluding phrase “as they are commonly understood” leaves too much room for abuse by the regulatory apparatus.

Chilling Effect

If you add all these ambiguities of definition together with the city’s recourse to the “Without Cause” clause, you end up with a chilling effect that will crush speech, innovation, and experimentation in the neighborhoods: a Sword of Damocles capable of jerking the basic platform away without cause.

Next

Our next post on the draft Licensing Agreement will focus on the innovation eviscerating requirement that dotNeighborhood operators receive prior approval from the city before adding secondary level domain names (here).

 

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Neighborhood Name License, part 1 – CAUTION: “Without Cause”

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(Commons Photo courtesy of sporkwrapper.)Jackson Heights, New York, February 2, 2016 – The deBlasio Administration’s licensing initiative for the neighborhood domain names is currently accepting applications. So if you’re a neighborhood activist or budding media mogul, and want to activate Astoria.nyc, ConeyIsland.nyc, GreenwichVillage.nyc, Harlem.nyc or any of the 380 other reserved neighborhood domain names, submit your applications now. (Here’s the application.) Successful applicants will be notified on February 12.

While we’re extremely supportive of the initiative, there’s a clause in the draft Licensing Agreement that diminishes the likelihood of serious parties investing the necessary resources, a “without cause” clause in Section 3.b of the draft Agreement which states:

Either party may terminate this License Agreement without cause (effective immediately);

We wrote the mayor’s office about our concerns (this one and a few others that we’ll post on soon) and were told they were reviewed “with the Law Department and while we are unable to amend the terms per your request, we have certainly noted your requests.” So seemingly, while the version of the Licensing Agreement shared with us says “DRAFT—NON-FINAL & DELIBERATIVE,” so far it seems changes will come from the city sans consultation with residents.

As we stated above, we love the “dotNeighborhoods” and see them providing a fantastic opportunity to improve engagement and provide a civic toolbox that will facilitate innovation and improve the quality of life. (See our Adding Internet Mojo To Neighborhoods pages.) Indeed, we gave serious thought to applying for the JacksonHeights.nyc domain, but the “without cause” clause forced us to hold off. How could we approach investors and garner the necessary resources without the city providing a serious commitment?

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UPDATE, February 5, 2016

This past December we contacted several elected officials about the “Without Cause” clause and the hardship it would impose on an entity seeking to garner the resources to undertake the development of a dotNeighborhood in a serious manner. We heard back from one recently, who informed us that in checking with their office’s attorneys, they were told that this was a standard clause in all city contracts. We checked the city’s agreement with Neustar Inc., the holder of the contract to operate the .nyc TLD for the city, and found no such reference. (See the city’s contracts with Neustar here.) When told of our finding a representative from the same city official said their office had received complaints from others about the situation and would be looking into it.

We don’t doubt that eager city lawyers try to impose a ‘Without Cause” clause whenever they can. And perhaps they sometimes impose it. But if the administration is serious about adding the Internet’s capabilities to improving the economic and social quality of life in our city’s neighborhoods, this clause has got to be removed “Without Delay.”

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