dotMobi Community Proposal re: Sedo Auction

Over the last six weeks, dotMobi has been working hard to resolve the problems that arose from the 5 December 2007 Sedo auction. As many readers will know, we had re-scheduled an auction replay for 23 January, but this was subsequently postponed due to feedback from the community that this was not the best approach. We are conscious that the community is looking for a speedy resolution to the situation and we share that sentiment. We have a lot of work lined up for 2008; it is going to be an exciting and busy year ahead, and no-one is more eager to move on and get going than dotMobi.

That said, we were faced with a very complex and unique situation that required a lot of our attention and time. At all times, we have acted with the best interests of the community in mind. We have listened to all stakeholders, we have consulted widely and we are now ready to respond.

Many dotMobi followers will be aware of the work of the Roundtable organised by Mobility.mobi, referenced in comments to our prevous auction blog posts. We have been encouarged to see that group of people coming together in the spirit of compromise. On request, dotMobi waited to see, and take into consideration, the work output of that group before presenting its own proposal.

It is clear that Sedo's technical problems were serious and affected different participants and stakeholders in different ways. While a review of the information available has thrown a lot of things to light, there are some things that we will never know. There are many competing claims made by participants on both sides of the debate (crash "winners" and extension "winners"). It is, however, clear from Sedo's records that a very large percentage of participants did in fact go on to participate in the auction extension.

Given the serious irregularities in the December auction, dotMobi voided the auction. That decision still stands and will not be overturned; however, our fundamental goal is to find a constructive way forward that is in the best interests of everyone. We have been able to identify some situations where it may be possible to allocate domain names in a practical way without an auction. 

To that end, the auction domains have been grouped into six different categories.

The Six Categories

1. Reserve not met before the crash (no "winner" notification sent at time of crash for that domain)
2. No bids were processed on the domain after the crash
3. The crash "winner" also won in the auction extension for that domain
4. The crash "winner" actively participated in the auction extension for the same domain
5. The crash "winner" actively participated in the auction extension for another domain
6. Bid history does not reflect any activity by the crash "winner" after the crash

dotMobi has developed different approaches to resolving the disputes based on these categories. In all cases, domains offers are being made on the basis that the offerees enter into the dotMobi Auction Agreement (containing content obligations), describe their content plans and release any claims they feel they may have arising out of the auction. There is one solution for each name and no "cherry picking" is allowed.

The Solutions

• Category  1,2 and 3 crash "winners" / high bidders will be offered their domains at their highest bid price. (These are the easy categories.)
• Category 4 crash "winners" -- all of whom continued to bid on their names in the auction extension -- will be allowed to apply for names declined by the category 1, 2 and 3 crash "winners"/high bidders at those bidders' highest bid price, although categories 5 and 6 crash "winners" will have the opportunity to do so first. The auction extension winners for category 4 names will be offered their names at the winning bid price.
• Category 5 crash "winners" -- all of whom continued to bid in the auction extension for other domains -- will be offered the opportunity to pick up names declined by category 1, 2 and 3 crash "winners"/bidders and will be given a substitute name for the one on which they were bidding at their bid price (names to be valued by an agent and a choice of 10 names to be presented to the crash "winners" for their stated preferences.) The auction extension winners for category 5 names will be offered their names at their winning bid price.
• Category 6 crash "winners" -- no activity displayed after the crash -- will get priority pick of names declined by crash "winners"/high bidders in categories 1, 2 and 3 and also a substitute name. The auction extension winners for category 6 names will be offered their names at their winning bid price.

Where there are multiple expressions of interest in a declined name, the names will be selected by lottery.

This is a complex proposal but we present it to the community to show the efforts that have been made on dotMobi's part to reach a constructive solution that best meets the needs of everyone and also to ensure full transparency. Everyone stands to gain from moving past the December auction and continuing to build the value of the .mobi domain. If a substantial part of the community does not accept the above proposal, an auction replay remains the only viable option.   

As always, we welcome comments and feedback on this blog and made to premium@mtld.mobi.

Comments

[Andres Kello]

Thank you to everyone who participated in the Round Table and thank you to mTLD for listening to and cooperating with us.

Andres Kello
Mobility.mobi

[Holly]

Thank you to everyone at dotMobi/mTLD who listened to the community. This speaks volumes about your commitment to making .mobi a success. This is a difficult situation for all involved (including those of us with portfolios) and it looks like you have a handle on the different categories of bidders. Thank you for your willingness to include unreleased names as part of the solution as well.

Thank you, also, to Andres Kello of http://mobility.mobi for his leadership in coordinating the roundtable. You've earned your place in .mobi history for this one.

Best of luck to all participants and I hope you can find a result that works for you.

[Gary]

I must express my support for those who have put so much effort into the attempts to negotiate a resolution to this dilemma.

However, it would appear at first glance that my particular situation falls into a sub-group of category 6.

The domain that I won at the "crash" was subsequently lost at the "second" auction by one additional bid ($100) which was (according to the SEDO screen) a new bid from a new bidder....
I.e. according to the information that I have had available the 2nd winner wasn't involved in the auction at the time of the crash.... Obviously I have no idea if the bidding history was reset for the "2nd auction" but if it was, it implies very clearly to me that the "2nd auction" was not an extension to the 1st but a 2nd, entirely new auction; during which I lost a premium name that I was confident in the knowledge of having just won!

Is it possible for this to be investigated; I'm sure that it wouldn't take much to do so. It doesn't seem at all equitable that I can lose my domain to a bidder who only came into play after the end of the 1st sale (& crash) when I had a (winning)proxy bid set up days before this fiasco occurred..

(I have tried emailing mTLD but I haven't had a satisfactory response; hence my post here - reluctantly)

[Luis Zamora]

I applaud mTLD decision, they might be losing thousands of dollars (maybe) by letting a "crash winner" take the first change to buy the domain they legally won; after all, the bids are bindings for us bidders, why not for the seller? (or in this case SEDO). If the system crashed, is not our (bidders) fault. SEDO's bad decision of extending the auction should be a lesson to learn (among many others i.e. don't finish all your auctions at the same time) and if extension auction winners are still angry, some kind of compensation should be awarded, at the end, the extension auction winners will be the biggest losers of this joke

[Caroline Greer]

Luis,

I should clarify that it is the extension winners (some of whom were also the crash 'winners') that will get their names for the price of their winning bid placed at the very end of the (extended) auction. The crash 'winners' - most of whom were clearly aware of the auction extension as demonstrated by their continued bidding - will be offered different things (substitute names / the opportunity to pick up declined names on a priority basis) depending on their particular situation / category.

I have gone back into my original post to clarify this (I hope) in the 'Solutions' section.

As stated, it is complex!

Caroline.

[Paul G]

Difficult situations often require creative solutions and I am very pleased to see both mTLD and the Mobility Round table trying to come to terms regarding a situation all were thrust into by a botched auction. As I understand it, this proposal represents a reasonable compromise, giving the seller a fair price established by the marketplace and providing bidders the opportunity to own and develop quality Premium names. Conspicuously (and sadly) silent here is the auction house who truly caused this mess. Even more reason to credit all those affected that are trying to find a reasonable solution.

Is this proposal perfect? Nothing is perfect in this situation, names can't be cut in two. So give consideration to everyone involved, find some reasonable ground, make amends and move forward.

Thanks mTLD for both putting the do-over auction on hold and for making this significant overture to the bidders affected by this mess. It shows you care to consider the opinions of your community of supporters and investors and it is my hope your good faith efforts here will be rewarded with a resolution for everyone involved. The community needs to move on to more pressing matters of building and promoting quality .mobi websites to further the brand and trustmark in the mobile web marketplace as a whole. I urge everyone affected by this situation to give this proposal careful consideration, not just for yourselves but for the community as a whole.

[Jeremy Padawer]

Caroline, MTLD -

This is an outstanding solution.

Both Extended & Crash winners are offered a reasonable outcome.

I applaud you.

You've listened to the greater .mobi community. You've enlisted the heart and soul of your brand to achieve a just result.

Great job.

Sincerely,
Jeremy Padawer

[Dave G]

Excellent decision -- I applaud those who helped contribute to a well thought-out and balanced final decision on this.

Looking forward to moving forward!

[Constantine Giorgio Roussos]

Thank you to everyone at the roundtable for their invested time.

This mTLD proposal once again is a slap in the face of law and was constructed to maximize profits for the mTLD using an eBay "Second Chance Offer" approach if a name was not accepted by the Auction 2 winner. This guarantees the mTLD maximizes their return once again.

I love the fact that the mTLD says that they will pass this resolution with majority vote. So let us see. We have the illegal second auction which has 50% of stakeholders. So 50% will vote yes. So you would need 1% for a majority right? So then we have the winners of the same name twice (In the original legal auction and then the illegal second auction). That is enough to tilt the scale in the favor of a majority. Once again this is maximizing profits and zero accountability for illegal behavior and what has transpired.

The mTLD once again is more concerned with maximizing profits than acknowledging contract law and their mistakes. On the other hand they come up with proposals to maximize their earnings and call auction 1 winners crash winners. Again, there was a breach of contract and the "crash" was nothing more than a slowdown of servers covered under the Sedo TOS. There were individuals who did not experience a slowdown. Also I bid in the last 6 minutes so not sure where the 20 minutes came. I am sure all the logs are gone right? How convenient :)

I do not applaud the mTLD because once again they are acting like money-hungry opportunists with their main focus being to look good in front of the public with their "PR" stunts. If someone reads the proposal they can obviously see that it offers no remorse and no respect to contract law and rewards Auction 2 winners and penalizes the legal winners.

Both Auction 1 winners and Auction 2 winners came up with a proposal that would please everyone but of course the mTLD did not like it because once again it did not maximize returns. Your proposal was complete joke and an insult to our roundtable decision without taking ANY auction 1 winner into consideration. How can you ask auction 1 winners to sign a contract to pay money for substitute names without knowing the names? If your focus was on development, why would you give names WITHOUT even knowing what the winner's line of business is? Again it is obvious. Maximizing pocket cash.

Why on earth does the mTLD propose random allocation too if there are 2 competing bidders? So you have a developer with a vested experience in the domain's business and someone that is not a developer not in the line of business that the domain is in. Why would you randomly allocate the name? Under the mTLD's proposal this is inconsistent with their development policies and the community's push to developing the name and pushing it. Once again, inconsistency. .Mobi domains should have been distributed the traditional way. First come first serve. But under the premium auction policy, the equitable distribution is based on auctioning or RFP. But once again, the mTLD goes against their own policy and offers random allocation as a possible solution.

Of course this is good for maximizing your pockets with cash and ruling in favor of illegal second auction winners. Nothing against the second auction winners. They did what they had to do to get into the game and of course that raised the prices to abnormal heights. Sedo and the mTLD made sure of that.

Best wishes to everyone. In regards to music.mobi, justice will prevail. I would like to thank Alvaro for endorsing music.mobi to me, the roundtable for their continual support for me to develop music.mobi in the best interests of .mobi. Additional thumbs up given to Andres for setting up the roundtable.

Thumbs down to both Sedo and the mTLD. The mTLD never took accountability for their actions. If they were legitimate, they would acknowledge that a mistake was done from their perspective and done what they had to do to make amends. Where is Sedo in all of this? Perhaps they are constructing their next plan with the mTLD over the next premium auction. One this is for sure. Me and others have raised the value of the .mobi domains to the roof. Then we get a slap in the face as a thank you.

[Chris]

Since mTLD have now published their own proposal in the public domain - and in the interests of a fully informed .mobi community - this is the RoundTable proposal submitted to .mobi.

This 'FAIR SUBSTITUTION' proposal received 83% support of voting RoundTable participants.

mTLD rejected key elements of this proposal.

'FAIR SUBSTITUTION'

A Compromise Proposal to mTLD from the Bidders at Auction

Re: Domains in Dispute

.mobi Premium Auction 3 - Dec 5th 2007

The bidders at auction offer ‘Fair Substitution’ as a compromise proposal for consideration by mTLD (dotmobi), the Seller of the names in dispute, to resolve the differences between us, arising from .mobi Premium Auction 3, on Dec 5 2007.

GUIDING PRINCIPLES OF THIS PROPOSAL

(i) FAIRNESS

Whilst no solution to a problem such as this can provide ‘everything for everyone’, we put forward this proposal ('Fair Substitution') as a solution that offers ‘something for everyone’.

In the spirit of compromise, and resolution, we suggest that ‘Fair Substitution’ is a fair compromise by the auction winners - and it takes into account mTLD’s position in the situation, as well. We believe it is the most logical course of action, if we all wish to resolve this without litigation.

(ii) .MOBI BRAND

We are also very aware of the potential for significant damage to the .mobi brand - and the reputation of the Registry - if this situation is left unresolved.

The nature of this dispute concerns fundamental issues about contract law - but, also (very importantly) investor security, safety, certainty - and confidence - in their dealings in .mobi domains, and with the .mobi Registry, itself…The outcome of this dispute, we believe, will have a direct bearing upon investor confidence and attitudes to dealing with the extension, in the future.

(iii) BIDDERS ACTED IN GOOD FAITH

It is the bidder’s core position, that they have acted in good faith from the beginning - And, that, each bidder has met the .mTLD Reserve price at auction for each of their name(s) in dispute - and that each bidder has also received written confirmation from the appointed Auctioneer (Sedo) that they - in each case - were the winner of each name in dispute. It is with this in mind, that the bidders offer this proposal to assist resolution.

(iii) PREFER TO KEEP NAMES

Please understand, that we would MUCH prefer to keep the original names won at auction - but, having said that, we are willing to explore other avenues, in the overall interests of all concerned.

(v) ADVANCES .MOBI STRATEGY

‘Fair Subsitution’ is a solution that enables, and advances, dotmobi (mTLD) strategy in the marketplace - and, advances the development of .mobi domains, as well.

PROPOSAL - FAIR SUBSTITUTION

(i) That, the original winners relinquish their claim to the names they won at the 1st auction.

(ii) That names be awarded to the 2nd (‘extended’) winners, at the prices they bid at auction.

(iii) That, in return for relinquishing their rights to the names at the 1st auction, mTLD would award the equivalent number of new names from the unreleased mTLD Premium Reserve List - of equivalent generic scope and properties - to the 1st auction winners - and that the 1st auction winners would pay their original winning bid prices for them.

(iv) The 1st auction winners would submit, say, 3-5 names of their choice, of equivalent generic scope and properties, to mTLD for each name they are to relinquish - and mTLD, and the winners, would agree together, from those submitted lists, which names would be awarded.

(v) Winners of the 2nd (‘extended’) auction may, at their discretion, elect to relinquish the name(s) they won in the ‘extended’ auction to the 1st auction winners of those names. In this case, 1st auction winners must accept the name(s), and must pay the 1st auction winning bid price.

(vi) If a winner of the 2nd (‘extended’) auction chooses to relinquish a name(s) to the 1st auction winner, mTLD would award a new name(s) from the unreleased mTLD Premium Reserve List - of equivalent generic scope and properties - to the 2nd auction winners, in lieu. The 2nd (‘extended’) auction winner would pay Price ‘X’ for the substitute name(s)….(Price ‘X’ is the mean average price between 1st auction winning price for a name, and 2nd (‘extended’) auction winning price, for the same name).

In this way, both bid parties - that hold Binding Contracts for auctioned names - are
Satisfied…

(Note: (v) and (vi), above, provide a mechanism to deal with music.mobi, if the parties are willing, for example).

MECHANISM FOR SUBSTITUTION - FAIR VALUE

We suggest we all accept a simple objective measurement to equate the value of the names, based on the proven type-in numbers for the name without extension:

...ie: OVERTURE results.

We understand that Overture is not a perfect mechanism....but, it has the virtue of simplicity, - and objectivity - to reduce debate - and, it focuses on the potential for traffic that a name may attract (which, of course, is a key measurement of potential value).

We shall accept +/- 20% of whatever the Overture type-in figure is, as a simple equation to determine deemed equivalent generic scope and properties between the original name, and the substitute name.

Eg: 'Fashion' = 308,570 (O/T)....As a determinant of deemed equal value (for the purposes of this proposal & agreement) a substitute name from mTLD Premium Reserve List that had +/- 20% of 308,570 in Overture, would be the determining value-equation for a substitute name.

mTLD FINANCIAL COMPENSATION:

1st Auction bidders understand that mTLD may view the provision of substitute names of equivalent generic scope and properties to them, at the prices they bid at the 1st auction, as possibly resulting in mTLD incurring a possible deemed future ‘opportunity loss’ on the possible value of future sales of the names that they allocate as substitutions.

We take the view that - if mTLD were to believe this to be the case - then, it is not the responsibility of 1st auction winners (who have met mTLD auction Reserve Prices, and who believe they have enforceable contracts to the names, at their winning bid price) to subsidise this possible deemed ‘opportunity loss’.

We put it to mTLD, that if they wish to recover possible deemed future financial 'opportunity losses' on substituted names then, mTLD should look to Sedo to subsidise all - or part - of what mTLD may regard as possible future 'opportunity losses' on the substitute names.

After all, Sedo was the mTLD-appointed Auctioneer - and if mTLD feel there was a problem with the auction, in any respect, then, it is our view, that that is a matter between mTLD, and their Auctioneer - not the confirmed winning bidders, acting in good faith.

BENEFITS .mTLD OF THE FAIR SUBSTITUTION PROPOSAL:

(a) If mTLD awarded the 1st winners alternative substitute names of equivalent generic scope and properties, then 1st auction winners would be satisfied. All litigation from original winners would be dropped, as soon as the agreed names were awarded.

(b) By giving up their rights to names they won at auction, the 1st auction winners provide a formula for mTLD to settle with ALL the original winners, if they wished, on an equitable basis - including - and, importantly - by allowing the release of the auction names in dispute to the 2nd (‘extended’) winners, at the winning bid prices for the 2nd ‘extended’ auction. It avoids the possibility of litigation from the 2nd ‘extended’ auction winners, too.

(c) It offers mTLD the opportunity to gain the higher revenue from the 2nd 'extended auction' for the names in dispute from the 2nd (‘extended’) auction winners (or, if 2nd 'extended auction' winners elect to relinquish names to 1st auction winners, then revenue for those names at Price ‘X’)....It also gives mTLD further revenue (up to the amounts of winning bids in the 1st auction) for the new allocated substitute names.

(d) It offers a chance for mTLD to settle all legal matters quickly - from both the 1st auction winners, and from the 2nd (‘extended’) auction bidders.

(e) It would resolve the current acrimony and division within the .mobi community.

(f) These substitute names could be subject to the same 6 month development condition as all .mobi premium names offered for auction. Thus, even more developed .mobi names would be moving into the marketplace - sooner - thereby advancing mTLD strategy.

(g) dotmobi (mTLD) are holding approx 5000 names - This proposal would only affect a max of 100 'newly-released' names (and probably a lot fewer)...A small proportion of unreleased Premiums - and its therefore very doable - IF mTLD so chose.


(h) This is a solution that does NOT require the payment of money by mTLD to any party.

(i) ‘Fair Substitution’ is a proposal that we believe would reflect favourably upon dotmobi (mTLD), and the .mobi brand, because:

(a) It would show that mTLD Registry as prepared to honour auction contracts - even under problematic circumstances.

(b)It would show mTLD Registry as having brokered a solution that has ‘Something for Everyone’. And, a fair solution.

(c)It would demonstrate that investors in .mobi are important & valued to the mTLD Registry - and be a recognition of mutual mTLD/Investor respect and support.

In all the circumstances, we feel there are many benefits in FAIR SUBSTITUTION for both mTLD, and the bidders - and that the gains for mTLD from his proposal (in the short & medium term) far outweigh any possible short-term disadvantages.

We urge dotmobi (mTLD) to accept this proposal - in the interests of all concerned.

Thank you.

[Chris]

PROBLEMS WITH THE mTLD PROPOSAL

First, as an Auction 1 winner, for two names, I've looked at mTLD's proposal in every way I can, trying to find a way to accept it…

But just I can’t accept it.

THE mTLD PROPOSAL MEANS:

FIRST:

(i) Bidder must SIGN AWAY THEIR RIGHTS TO THEIR NAMES.

(ii) Bidder must PAY THE AMOUNT THEY BID INTO ESCROW.

BEFORE:

(a) mTLD shows the BIDDER a pool of 10 possible substitute names

(b) Substitute names are at TODAY’S appraised value by Sedo AT AUCTION 1 PRICE BID

(c) Bidder can prioritise their preferences from this list.

(d) But, mTLD ALLOCATES one of the 10 names (not even necessarily their preference) to the bidder.

So, mTLD ASKS BIDDERS TO PAY BLINDLY – WITHOUT KNOWING WHAT NAMES THEY MIGHT GET FOR THE MONEY….!!

This is simply NOT a reasonable thing to ask, imo.

(ii) I believe mTLD don't want to give auction 1 winners 'equivalent value' quality of names, at the prices they bid....They want to substitute names that are (according to, say, Sedo) of a deemed LOWER quality, than what we bid for.

The RoundTable did try to ensure that mTLD wouldn't be out of pocket - we recommended they could give us equivalent value names IF THEY SEEK ANY DEEMED FINANCIAL SHORTFALL FROM, SAY, SEDO (whose systems seem to cause the problem, in the first place), instead of from the bidders.

But, mTLD seem to have rejected that, too.

(iii) And, I've spoken to mTLD on the phone, at length - seeking further compromise:

(a) I canvassed whether mTLD would EVEN LET US SEE names (let alone accept them) that mTLD may allocate into a substitute pool for each of our names, BEFORE we signed away our rights, and paid our money.

REFUSED

...I canvassed would mTLD consider an objective Overture - minus 50% - may be acceptable way to value-equate substitute names with Auction 1 win names.

REFUSED

...I canvassed the possibility of swapping my TWO names for ONE name of Overture-equal value, from their unreleased premium pool.

REFUSED

__________________________________________________

I see no attempt to 'compromise' with auction 1 winners, at all, from mTLD in their proposal.....Its as if we never received winning bid confirmations. There is simply NO recognition of it in their proposal....And, worse, imo, no WISH to recognise it...

Essentially, mTLD are saying to Auction 1 winners, imo:

"...You won the right to buy a name (that WE choose for you - and, on OUR valuation) at today's price - not prices prevailing before Premium 2 auction

'Compromise' means accepting a lesser value name than you won - Or pay Auction 2 price' - IF another bidder doesn't want it..."

That's not 'compromise' from mTLD, imo – That means: 'Sell you a name you may not want, at prices now elevated above the prices that prevailed at the time Auction 1 closed'.

__________________________________________________

With regret, my view is that this mTLD proposal is not a genuine compromise proposal.

I don't believe any reasonable person (Auction 1 winner ) could accept it.

And, I truly believe that I, and the RoundTable, have tried our very best to find a negotiated solution that is a compromise - whilst believing that Auction 1 was a genuine closed, and finished - auction.

I'm rejecting the mTLD proposal, in its current form.

[Caroline Greer]

Thank you Costa and Chris for your comments.

Costa, I appreciate that you have views about auction models in general for domain allocation. We have addressed that issue in previous posts.

No-one is being pressured into accepting a name which they won in the auction extension. Just as you may choose to decline your own particular extension name, the exension winner for the name that does interest you may decline his offer, in which case you would have first pick of the name (at the extension price - the market price) since you were the crash 'winner'.

As regards the development aspect, our content obligations apply for all the names. This is a fundamental part of the proposal which offerees must accept.

Chris, thank you for sharing the Roundtable proposal. This serves to demonstrate that in fact, contrary to your view, dotMobi did take a lot of this proposal into consideration and we have used elements of it in our own response (namely, the substitution model). This has been done in the spirit of compromise as in many cases, we know that the crash 'winners' did actively go on to participate in the auction.

The substitution names will be valued by Sedo (not dotMobi), using the overture model in part as suggested by the Roundtable, and a choice of 10 names will be presented. Some names will actually be of higher value than the bid price since names will be valued in batches. Names will then be allocated according to stated preferences until everyone has a name.

Again, it is impossible to please everyone. dotMobi has made concessionary moves over and above what we feel is necessary but we do so in recognition of the fact that compromise is necessary in order to close this debate and avoid the only other alternative of an auction replay.

[tired of the whining]

Posted by: Constantine Giorgio Roussos | 18 January 2008 at 02:04 AM

"I do not applaud the mTLD because once again they are acting like money-hungry opportunists with their main focus being to look good in front of the public with their "PR" stunts."

Opportunism is trying to get a $616,000 domain for $66,000 because of a server problem.

[Constantine Giorgio Roussos]

"Opportunism is trying to get a $616,000 domain for $66,000 because of a server problem."

Hey "Tired Whining" do you realize I bid the name up to that amount and that the consequential winner rejected it because he had no idea about the 6-month development plan? Once again that was not displayed on Sedo, so how would the end bidder know about the development requirements. This is not market price that is for sure. It was a fabricated price that was reached by myself and a bidder who was unaware of the restrictions.

The name ended at $66k. If I drove the price up then you have to consider how it was driven up and who else was bidding against me. If the highest bidder drops the request for the name which he did, why would I still be paying an overrated, overhyped $616k that was created over a bid war AND 2 time extensions (3hrs + 30minutes)? Why would I be agreeing to an illegal auction? You signed the TOS and didn't bid during the 7 days you had a chance to bid. This was not a crash but it was a server slowdown issue covered under TOS.

Opportunistic is covered the law of "Unjust Enrichment". The mTLD obviously wants to be "Unjustly Enriched" even though the highest bid was retracted (this is not an eBay second chance scenario incidently) and the second auction was a breach of contract. You can take at look at case: Zuger v. North Dakota Ins. Guar. Ass'n, 494 N.W.2d 135, 138 (N.D. 1992). Here are the legal components and you can tick them off. Unjust enrichment must have 5 components:

1. An enrichment
2. An impoverishment
3. A connection between enrichment and the impoverishment
4. Absence of a justification for the enrichment and impoverishment
5. An absence of a remedy provided by the law

Is this a case of getting enriched? You bet. As far as I am concerned, my bank account is going down for the purchase of an extension which has risks accompanied since most websites are ignoring .mobi and are adding "m." in their domain name which again is a failure for .mobi to get the word out. Mobile is the future but is .mobi the future? How is .mobi different from a .com? It has nothing except its name that differentiates itself. Browser can recognize if you are viewing the content from a mobile device and can adjust. You still do not think it is a risk? Quoting the founder of the internet Tim-Berners-Lee: "I urge ICANN not to create the ".mobi" top level domain - Tim Berners-Lee (Cambridge, Massachusetts, 14 May 2004). So let me see, I pay money for the domain, have 6-month development requirements and then HOPE the mTLD promotes the extension and persuade the world that .mobi the the only way for mobile? And furthermore, let us take a look at the 6-month development proposal. Is the mTLD going to provide the world with handsets that are internet mobile ready and ready for commerce? Is 3G phones good enough? Wait even iPhones at 2.5G. We are NOT there yet in regards to mobile and let us not kid ourselves here. It will be another 2 years until we see the impact of mobile. So it will need some good developers to push the name since the original investors and sponsors are not pushing it.

Let us take a look at them:

Google.mobi redirects to Google.com/mobile
Microsoft.mobi is non-operational. They use Microsoft.com/mobile
Samsung.mobi has an internal server error.
Vodaphone.mobi is for sale on Sedo (the irony)

I guess ONLY Nokia & T-Mobile have an operatable .mobi. And they ARE Telecom companies.

Yahoo.mobi redirects to m.yahoo.com
Msn.mobi redirects to mobile.msn.com
Google.mobi redirects to google.com/mobile

Anyways, just for the individuals who think that a $616k is the market price. Also i would love to hear from others who have doubts that I inflated the price and so have others due to fabricated bidding wars governed by unlawful auction proceedings.

As far as I am concerned, the mTLD IS getting enriched regardless but will be further enriched because of the mistakes created due to the server error and all in discrepancies that followed.

No-one seems to see the risk instead myself. As far as I am concerned, I am putting my money where my business and not to unjustifiably enrich the mTLD who never apologised or took accountability for their demise. They blame Sedo but yet they have not publically done anything about it. I am sure a lot of individuals will be willing to bid for Music.mobi in a future auction with a lawsuit associated with it right? I am a man of action not whining. I have shown reasonable co-operation with my fellow Auction 2 winners despite my recognition that the second auction was illegal. Again nothing against them. Business is business and we all do what we have to do within the realms of law, ethics and integrity. When I get music.mobi, you can rest assured I will put my money where my mouth is and get the word out to all musicians about .mobi. Win-win for everyone. Maybe perhaps the mTLD. But like I said, their concern as a private company is to maximize profits. Substitution proposal was a great solution almost all agreed too.

And Caroline, please refrain from calling the legitimate Auction 1 winners the "crash" winners. Your company for starters "claims" that it has no evidence or logs about the Sedo post-first auction activity, yet you call us "crash" winners. That is insulting and once again inconsistent with your statements. If you want to call us "crash" winners, I would like you and Sedo to prove that with all the logs on all servers, explaining precisely and substantiating it with evidence how the site crashed without the site being down. I did not see an internal 404 error and neither did I see the site being down or off the internet. There was a slowdown which is not the same as a crash. That is a result of traffic or failure to balance servers correctly. And I have seen no public statement from your company acknowledging negligence on having 100 domains ending at the same time. At least own up to your mistakes and recognize that you can not penalize and get unjustifiably enriched by your own errors and illegal behavior.

P.S When is your .mobi contract up for renewal with ICANN? That should be interesting.

[stop whining i agree]

Constantine, I think if that is your legal argument, your case is in trouble. Condition #4 is clearly not satisfied (regardless of whether it was a 'crash' or a 'slowdown').

If you honestly think you raised Alvaro's true valuation of music.mobi from below $66,000 to $600,000+ by bidding it up in the "first" auction, you must think that you are Jesus Christ himself.

And by the way, it's vodafone.mobi -- and it does not redirect.

[Constantine Giorgio Roussos]

Well, just for your information, the legal arguments are enough to write a book. Thanks for pointing out Vodafone. Good to see that some telecoms might be using .mobi. If it was a true valuation I want to see someone with $616,000 that is interested in that specific domain for that price.

Any your name is?

P.S I would appreciate if you leave religion and Jesus Christ out of this discussion.

[Re-auction the only solution]

It is to be remembered that both SEDO and mTLD had acknowledged that there were a great number of participants whose bid entries were not logged in by the SEDO’s servers a couple of minutes before the crash. In that case it is quite possible that there were numerous bid entries that could have been greater than the highest bid value at the time of crash. Henceforth, those who received the notification for the highest bid could not have been the original highest bidders. Now mTLD is proposing a compromising solution to those qualified as winners by an erroneous system and completely ignoring the participants who have the proof of genuinely bidding for values greater than the highest bid values both pre and post crash. How is mTLD going to face the lawsuits from those participants whose bids were placed but not qualified as the highest bid by the server?

Moreover, most of the bidders were unaware of the site developmental requirements of mTLD. Quite a number of bidders could contest that they are not mandated to comply with the developmental requirements as it was not a precondition at the time of purchase of the site. The re-auction of all the domains through a credible and defect free auction system in which all the participants are elucidated about the mTLD’s developmental requirements gives all the stakeholders an equitable chance. No other form of compromising solution is going to resolve this deceptive and erroneous auction.

[Re-auction the only solution]

In case of a re-auction, the so called "crash winners", "crash losers", "highest bidders", "participants who were not aware of the extended auctions" and everybody else gets to re-participate in a level playing field, where no body has an advantage over the other just because the computer chose to accept the bids of a few lucky ones and ignore the bids of the other unlucky participants or because the some participants were unaware of the extension in the auctions or because most the participants were confused by the deceptive notificatios from SEDO and extension in a short notice.

[Jasdon]

Great, well thought out solution - seems as fair as possible to all parties.

I think you (mTLD) have extricated yourselves from a very messy situation with aplomb - confidence regained!

Now, back to business as usual; when will the next auction be, and what will be the names?

[Ray Patterson]

I fully support the proposal by mTLD. It seems fair and well thought out.

[Re-auction the only solution]

Is it really necessary to record this complex proposal, god knows who can decipher its true meaning/solution, in the history of dot mobi and mTLD?

How about a plain and simple re-auction where each and every one gets to have a level playing field and where it is not skewed in favor of a lucky few whose bids the computer chose to keep and ignore those of the others?

[Jeremy Padawer]

mTLD,

Please feel confident in this decision.

Do not re-auction a 3rd time unless "Extended" winner passes on the name and "Crash" winner passes at the "Extended" auction close.

You have minimized liability. No need to open this up to a third class of participants.

Crash Winners & Extended winners have been offered a fair and reasonable outcome.

Jeremy Padawer

[Hans Oglov]

The proposal seems at first sight reasonable, until you start rephrasing it as follows. mTLD says:

1) Each of the names will only be sold AT THE HIGHEST PRICE we have ever seen for this name.

2) It is first offered to the winner of the second auction (which sometimes is the same winner as the first auction). But even if they won both auctions, they now will have to pay THE HIGHEST PRICE.

3) If the second winner does not want it, we will then offer it to the winner of the first auction. But instead of the winning price of the first round, they will now have to pay THE HIGHER PRICE of the second round. So if the bidders of the second round have now concluded that they have been bidding too high in a frenzy, then still that price level is now seen as "normal" and others will have to pay that price.

3) If neither first nor second winner wants the domain, we will offer it to other bidders AT THE HIGHEST price. But these people never wanted the name, and if both first and second winner refused it then that's clear evidence that something is very wrong with the price so it is very strange to keep asking that price.

4) If still nobody wants it AT THE HIGHEST PRICE then we will take it back. You could of course say that if all these professional .mobi buyers indicate that the price is too high, that they might have a point but that's not what mTLD accepts.

Finally the hunt for high prices even extends to the substitute names being offered. These names will be valued by Sedo (who is definitely not obective in this case). As part of the valuation Sedo will no doubt look at the prices offered in the second round. Even if nobody now is willing anymore to pay those prices.
Add to this the fact that people will have to sign off all rights without knowing what they will get in return (except that it will be decided by two parties with interests opposing to the buyer) and it becomes clear that this proposal is for most cases very unreasonable.

[mobile select]

Off topic but I'd really like dotMobi to get in contact with Google and ask them why they invested in .mobi when they have chosen to advertise mobile.google.com on ALL of their web pages with regards to mobile access.

http://www.google.co.uk/mobile/stp-js.html

Let's get these so called "backers" actually helping .mobi and not just waiting to see if it will take off or not before they start to use and advertise it!!!

Many thanks.

[auction participant]

Well you have considered the "crash winners" and "extended winners" in this proposal. What is the fate of the so called "crash losers" whose bids have been ignored by the server despite being higher than the closing bid as accepted by the server?

I guess re-auction is the undisputed solution where everybody has a fair and equal chance? Or else, mtld has to face the grudge and legal suits from those deprived participants.