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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.London Premium Domain Name Auctions Start

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London Evening Standard LogoNew York, July 15, 2015 – While New York City officials consider ways to issue the city-shaping and valuable Premium Domain Names – hotels.nyc, sports.nyc, news.nyc – London has settled on a plan for allocating its Premium Names. According to a story in today’s London Evening Standard:

Fifty of the most prized “dot London” website domain names are being auctioned from today to raise tens of thousands of pounds for the Standard’s charitable Dispossessed Fund.

Generic names such as cars.london, cinema.london, coffee.london, food.london and shoes.london were open to bids at noon at the domainauctions.london online sales room.

It is the latest phase of the roll-out of the new dot London website addresses with 64,000 already registered since launch in April 2014.

Up to a quarter of the proceeds from the auction, which closes at midday on July 30, will go to charities supported by the Dispossessed Fund subject to a cap of £50,000.

How much might the auction raise overall? Take a look at the early results here. With two weeks to go before this first auction concludes, rooms.london has a bid of £5,100 (about $8,000), with west.london in second place with a £2,501. So it would seem the Standard’s Disposessed Fund will max out with a £50,000 contribution.

The article mentions nothing about public interest commitments so our guess is that there are none, and that the Disposessed Fund is a fig leaf for the public interest.

Here in New York we’ve recommended that important Premium Names have public interest commitments attached. (Note: The city has set aside 3,069 names for consideration as premium names, some of which have little baring on the civic good such as 777.nyc and zero.nyc. We support auctioning these names.)

Public Interest Commitments will vary, perhaps requiring that hotels.nyc fairly present all the city’s hotels and that news.nyc and sports.nyc be based on local content. The New York Internet Society and Connecting.nyc Inc. organized a panel last December that suggested a PIC Oversight Board to delve into the intricacies of the allocation process.

Premium Names are a cornerstone of a successful city-TLD design plan. London seems to have taken its lead from General Motors’ chief Charles Erwin Wilson, saying (excuse our paraphrase) “What’s good for domain name sales is good for our city”. We await Mayor de Blasio’s plan.

 

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The .nyc Landrush Auctions: Adding Injury To Insult

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Collaboration Jackson Hts., New York, August 13, 2014 – New York City is in the midst of a 2 part “Landrush” for allocating .nyc domain names:

  • First is a 60 day Application Period, August 4 – October 3, during which any city resident can purchase an available .nyc domain name. Most any name is available, exceptions being a group set aside for technical reasons, 482 names taken by holders of international trademarks, and several thousand names reserved by the city administration. It doesn’t even matter if a name has a NYS Trademark or d/b/a registration, those names are fair game too.
  • Following this Application Period there’s a high-bid auction which decides who gets a domain name in instances where more than one person submits an application.

There are significant problems with this allocation process.

First, it’s fundamentally unfair. It disregards the proprietary rights of current business owners as expressed by prior use, a New York State Trademark, or a d/b/a. The fact that Rickys Cafe has been using that name for decades and has been issued a NYS Trademark for that name holds no significance during the city’s Landrush period. A revolutionary “property rights be gone” seems to be the attitude. Today, anyone with nexus (8,200,000 of us) can apply for RickysCafe.nyc and have as much right to own it as Ricky.

In preparing for issuing its .london domain names, the city of London developed Priority Period Rules that respect historic property rights. I commented on this recently recommending that New York follow London’s model.

But even with these Priority Period Rules there still needs to be a mechanism for deciding between applicants with the identical priority. Let’s imagine there’s an independently owned Rickys Cafe in every borough and that each submits an application by October 3. Who gets it?

Current Plan

The current plan holds that at the end of Landrush an email will be sent to applicants for domain names receiving only one bid, indicating their application has been approved and they may begin using the name.

In instances where more than one application has been submitted, the plan calls for a closed, private auction for each name. Using  RickysCafe.nyc as an example, here’s how that might work.

  • The 5 applicants for RickysCafe.nyc will receive an email informing them that others had applied for the name. And that they will need to win a high-bid auction if they hope to use the domain name.
  • If they decline to participate in the auction some of their application fees may be refunded – but this depends on the registrar they’ve chosen, some refund partial, some all, or so I’m told. It’s not obvious from ownit.nyc which does what.
  • The email will direct the interested Rickys to set up an account with the official auctioneer, and participate in an extended auction.
  • In this extended auction, unlike eBay, there’s no bid deadline. Rather, every time someone enters a bid, the auction is extended by 5 minutes. (This auction protocol maximizes revenue with the contractor receiving 60% and the city government 40%.)
  • The winning Ricky will be authorized to use the domain name after making good on its high bid.
  • The losers weep.

Added to the refusal of the city to respect NYS Trademarks and other indications of prior use, this high bidder auction might be said to add injury to insult.

An Innovative Approach

We think there’s a better way. The idea was sparked when ICANN’s experience with new top level domain names or TLDs. In 2012 it received 1,900 applications for 1,200 different TLDs. The official process for selecting between multiple applicants for the same name – for example there were 8 applicants for .music – was to encourage the applicants to try and resolve the dispute privately. And if no resolution was possible, a high-bid ICANN run auction would decide the winner. The high bidder would get the name with the auction proceeds going to ICANN.

But some smarties came up with a different idea. Instead of holding an auction wherein the proceeds went to ICANN, what about holding a private opt-in auction. And in those instances where all applicants were in agreement, they’d hire their own auctioneer. And instead of the high bid sum going to ICANN, it would be split by the “losing” bidders. So in the case of .music, the winning bidder would pass on that top bid to the auctioneer to be equally shared by the five “losers.” These funds could then be used by the losing bidders for marketing, research, or technology. See ICANNwiki for more on these “Applicant Auctions.”

An Improved .nyc Landrush

How might we adapt the Applicant Auction to the unique needs of the .nyc TLD? Indications from the first month of Landrush registrations are that 6% of the applications will have multiple bidders – 4,300 applications were received with 340 of them duplicates. If the city receives the same number of Landrush applications as London – roughly 50,000 – that might require 4,000 auctions if the Current Plan is followed. [The numbers were updated on September 13 to reflect the latest .london and .nyc experiences.]

But what if we opened up the process. Instead of the planned closed, private auction with bidders ignorant as to whom they were bidding against, we open up the process and put the bidders in touch with one another, as with the ICANN Applicant Auction. And perhaps we could tweak on that process by letting the public comment on the applications: “Which application for RickysCafe.nyc do you think should be approved?” Or we might invite public comments, or even enable investors to join with the bidders.

Click for larger image.

Click for larger image.

There will still need to be auctions. But in those instances where the multiple bidders all opt-in to a collaborative end (by auction or otherwise), more money will stay in the hands of applicants to improve their businesses. And because the top bidder will in essence be subsidizing its competitors, it will be inclined to moderate its bid. To everyone’s long term benefit. (Commons image courtesy on Jisc.)

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