NC Budget Committee report to the Names Council


8 August 2001

The Names Council Budget Committee met twice since that last Council meeting and addressed three important topics:

    1) The status of dues payments by Constituencies pursuant to the new procedures adopted by the Council for failures to pay; and

    2) The status and outlook of the campaign to generate voluntary donations to the DNSO; and

    3) Revisions to the spending allocations under the DNSO's 2001 budget.

A brief report on each follows.



In an effort to improve the payment of DNSO mandatory dues by Constituencies, on the Committee's recommendation, the Council adopted the following procedures earlier this year:


(Published at http://www.dnso.org/dnso/notes/20010409.NCbudget-report.html)

Regarding the procedures of the Budget Committee, the Committee decided that its meetings should not be routinely open, but rather should be open to members of the Committee and any member of the Names Council who would like to observe. The Committee reached this conclusion because:

(1) it often discusses financially sensitive information; (2) members felt that the work of the Committee would benefit greatly by an atmosphere in which innovative ideas could be floated; and most importantly, (3) all of the Committee's reports to the Council and actions by the Council are publicly accessible.

Regarding procedures to address the failure of DNSO Constituencies to pay their assessed dues, the Committee discussed this matter during three different meetings and in its January meeting agreed to propose to the Council the following procedures:

From the date that invoices are mailed/e-mailed to representatives of Constituencies, if payment is not received by the DNSO or its agent by:

** 30 days, the Constituency is sent a reminder letter and another invoice

** 60 days, the Constituency is sent a delinquency notice and the delinquency notice is posted on the DNSO Website

** 90 days, the Constituency is sent a "show cause notice" (in which they are asked to show cause as to why their voting rights in the Names Council should not be suspended) and they are charged a 5% late payment fee to cover the cost to the DNSO of the cost of money. The 5% penalty is added to that Constituency's dues for the next (not the current) DNSO budget year.

** 120 days, the Constituency is sent a "final notice to pay" and charged an additional 5% late payment fee, which is also due as a added payment for their next year's DNSO dues

** 180 days, the voting rights, but not the right to participate, of that Constituency's representatives to the Names Council are suspended until such time as the DNSO or its agent receives all past due amounts including the varies late payment fees.

On July 11th, ICANN management reported the following status of dues payments by DNSO Constituencies for 2000 and 2001 (The DNSO operates on a January-to-January, calendar year. So, 1st Call refers to 1999, 2nd Call to 2000, and 3rd Call to 2001):

(Published at http://www.dnso.org/dnso/notes/20010711.ICANN-DNSO-budget.html)

   Amounts in US$.
                             1st Call    2nd Call  3d Call    Total Recd
   Business Constitutency   $5,000.00  $13,642.86       $0.00  $18,642.86
   ccTLD Constituency       $5,000.00   $1,292.59       $0.00   $6,292.59
   gTLD Constituency        $5,000.00  $13,642.86  $15,371.00  $34,013.86
   IP Constituency          $5,000.00  $13,642.86  $15,371.00  $34,013.86
   ISP Constituency         $5,000.00       $0.00       $0.00   $5,000.00
   NCDNHC                   $5,000.00       $0.00      $50.00   $5,050.00
   Registrars Constituency  $5,000.00  $13,642.86  $16,857.14  $35,500.00
   Total Paid              $35,000.00  $55,864.03  $47,649.14 $138,513.17
   Total Called For        $35,000.00  $95,500.00 $107,597.00
   Other Donations            $9,050.00
   Constituency Donations   $138,513.17
   Total Donations          $147,563.17
   Earned Interest &
      (Bank Charges)          $1,487.46
   Disbursements            $(14,008.16)
   Total Funds on Hand      $135,042.47

In addition, ICANN management reported that invoices for all DNSO Constituencies, except the Non-Commercial Constituency, had been sent out on April 18, 2001. (The NCDNHC invoices is being sent out by ICANN management this week.) According to this report, three Constituencies ( ccTLDs, ISPs, and NC) have failed to pays their dues from 2001 and the same three Constituencies, along with one more (Business Constituency) have failed to pay their deus for 2001.

Importantly, the Committee took note of the fact that since the 2001 invoices were sent out on April 18th, the DNSO had failed to send out to Constituencies 30, 60, or 90 day notices as provided in the procedures (There was some confusion with ICANN management on this matter, which resulted in the failure by the DNSO to act.)

Under these circumstances the Committee addressed two questions: (1) Did the Council intend that arrearages resulting from Constituencies failure to pay dues that were invoiced during 2000 would trigger the new procedures (or do the new procedures only apply to dues invoiced in 2001 and later/). On this question, the Committee concluded that the new procedures do not apply to invoices prior to 2001; and (2) Does the failure by four Constituencies to pay their 2001 dues trigger any of the actions envision in the new plan notwithstanding that the DNSO failed to provide the follow-up notices that were contemplated under the plan. On this question, the Committee concluded that since the DNSO had failed to provide 30, 60, and 90 day notices as contemplated under the plan, then Constituencies that were invoiced on April 18, 2001 should not be held liable under the terms of plan. Accordingly, the Committee decided to have the 30 day notices sent out as soon as possible by ICANN management and recognized that the 60, 90, 120, and 180 day penalties would kick in over 30 day increments after the 30 day notices were actually sent.



The Committee discussed the state of the current campaign to generate voluntary donations to the DNSO. (These will be used by the DNSO to cover the costs of providing professional support for the DNSO and such donations will be matched by the VeriSign Registry on a dollar-for-dollar basis up to $100K.) Unfortunately, no donations had been recorded as of July. The Committee again encourages each Constituency to request that its members donate funds to the DNSO to permit it to operate more professionally and competently. (If each member organization of each Constituency would donate to the DNSO one tenth of the amount of money that they spend on travel/entertainment for ICANN meetings, then the Budget Committee's goal of raising $60,000 --or $120,000 after the VeriSign Registry match-would easily be met!!)

The Committee gratefully accepted four volunteers who stepped forward and agreed to serve as DNSO fundraising chairs: One will focus on donations from outside of the DNSO and three will focus on donations from members of the Constituencies. Together, they make up a new fund-raising work group of the Budget Committee.



The Committee re-examined the spending categories and allocations that were approved by the Council for the DNSO's 2001 Expense Budget and recommends several changes to the Council in light of changed circumstances. (Thus far this year, the DNSO has spent around $37,000, mostly in charges from AFNIC for the provision of technical management services) These proposed changes DO NOT CHANGE THE TOTAL DNSO SPENDING and THEY DO NOT CHANGE THE AMOUNT OF DUES. The proposed changes re-name of category and re-allocate spending among the several categories.

The original 2001 DNSO Budget is

   Administrative                                $12,000
   Telecommunications                            $18,100
   Travel                                        $25,500
   Web/Listserv Maintenance                      $30,000
   Language Translations                         $10,000
   Professional Services                         $12,000
   Contingency                                   $35,000
The proposed DNSO 2001 Budget is:
   Administrative                                $12,000
   Telecommunications                            $18,100
   Travel                                        $10,000
   Information Management & Technical Services   $70,000
   Language Translations                          $5,000
   Professional Services                          $5,000
   Contingency                                   $22,500

Essentially, these changes re-label the category "Web/Listserv Maintenance" to Information Management & Technical Services and re-allocate an additional $40,000 to that category, with the reductions coming from Contingency, Travel, and Language Translations. The under-spending in these categories mainly reflects the fact that the increase in professional support that was envisioned for the DNSO has not occurred by mid-year.


Roger Cochetti, Chair
Names Council Budget Committee

Information from:
DNSO Names Council