DNSO Names Council Teleconference 4 April 2002 - minutes

4 April 2002.

Proposed agenda and related documents http://www.dnso.org/dnso/notes/20020404.NCteleconf-agenda.html

List of attendees:

Peter de Blanc         ccTLD
Elisabeth Porteneuve   ccTLD
Oscar Robles Garay     ccTLD absent, apologies, proxy to Peter de Blanc or Elisabeth Porteneuve

Philip Sheppard        Business 
Marilyn Cade           Business 
Grant Forsyth          Business
Greg Ruth              ISPCP
Antonio Harris         ISPCP
Tony Holmes            ISPCP    
Philipp Grabensee      Registrars  
Ken Stubbs             Registrars
Bruce Tonkin           Registrars
Roger Cochetti         gTLD  
Richard Tindal         gTLD  
Cary Karp              gTLD  
Ellen Shankman         IP    
Laurence Djolakian     IP  absent, apologies  
J. Scott Evans         IP    
Harold Feld            NCDNH  absent, apologies
Chun Eung Hwi          NCDNH  absent, apologies
Erick Iriate           NCDNH

17 Names Council Members

Thomas Roessler        invited as GA Chair
Alexander Svensson     invited as GA Alternate Chair

Glen de Saint Géry     NC Secretary
Philippe Renaut        MP3 Recording Engineer/Secretariat

MP3 recording of the meeting by the Secretariat: http://www.dnso.org/dnso/mp3/20020404.NCteleconf.mp3

Quorum present at 15:10 (all times reported are CET which is UTC + 2 during summer time in the northern hemisphere.

Philip Sheppard chaired this NC teleconference.

Approval of the Agenda
Philip Sheppard proposed that the main task of the call was to go through the list of previously identified topics and find areas of common agreement.

First there was a short discussion on the draft conclusions drawn from the first discussion.
Comments on the draft version 4

Recommendations for change were:

- mission: delete ICANN staff definition, add NC proposal (J Scott Evans / Cary Carp)

- mission creep: Delete "danger, add  "potential"; add "additional" to "security and consumer protection";

- point in time: add a comment to recognise that ICANN's functions may change over time. Reflect this in the recommendation.

- ccTLD: change "such as" description in point 3 to that recommended by Elizabeth Porteneuve

Agenda item 1. Funding

Short Term financing:
Ph. Sheppard explained that due to the immediate funding crisis, this item has been broken down into short and long term funding.
Purpose of looking at the short term funding is to see what the Names Council can contribute to stabilizing ICANN in the short term so that it is not distracted from day to day work by fund raising.

Marilyn Cade reported that participation in public outreach meetings by the Department of Commerce led to the current understanding that up to the night before last, the Regional IP Registries (RIRs) were refusing to pay the 1.4 million dollars owing for 1999, 2000, 2001. Because also certain ccTLDs had not contributed as expected in the ICANN budget, this has meant that ICANN has a significant shortfall and has left them with very low operating capital.  The RIRs were reported to have just agreed to pay 50% of the 1.4 million dollars which will bring some relief to the situation.

Roger Cochetti explained that the shortfall for the last two years is based on numbering registries and ccTLDs related to the contract relations on both sides. Evidence of this is that the Numbering registries put the full amount owing to ICANN into escrow.

It was agreed that the NC should urge the funding parties to reach agreement quickly to resolve this short term problem.

Long term financing:

Ph. Sheppard explained that this means the stable and ongoing funding for ICANN.

Roger Cochetti proposed that outside of the main source of income to ICANN currently via Registrars and Registries, there is a potential for other source of funds which includes:
- revenue from new ccTLD applications,
- solicitations for donations
- meeting fees.

Bruce Tonkin explained that today there is a fixed and a variable component in the Registrar pricing structure. The variable component is related to the volume of names registered.  He proposed that there should be a separation of ICANN functions, their respective budgets and a separation of chargeable services and remaining activities.  The Registrars are willing to increase the amount given to ICANN. They recognise that the increase would be used to deal with day to day issues, not so much for additional services, but for more efficiency. This could even potentially lead to cost reductions for Registrars. Registrars and Registries view money paid to ICANN as operating expenses. They believed that this should not be looked upon as the custodian of the Registrant's money, but that they pay a fee for Registrar and Registry services. There was not agreement on this last point.

Marilyn Cade informed the group that the during the Accra meetings the Business Constituency had proposed that the stable funding of ICANN should come from an agreed part of the Registrant domain name fee. This user fee could be administered by the Registrars. Models of such a mechanism exist in areas such as the self-regulation of advertising.

Ken Stubbs calculated that such a user fee would be small. Assuming an ICANN budget of USD10 million and 40 million names, implies a fee of just US 25 cents. 

Elisabeth Porteneuve drew attention to the fact that ccTLDs and gTLDs do not operate in the same framework, are quite different and cannot be compared. Thus any services from a more efficient ICANN is going to have less impact on a ccTLD than on a gTLD.

It was proposed that a distinction should be made between ccTLDs that are operating based on their geographic origin and those that are marketed as gTLDs.

Ph. Sheppard made the following conclusions on which there was general agreement.
1. Without going into the mechanism of how it flows the revenue stream in the Registry, Registrar, Registrant system, which is mostly derived from gTLDs should provide ICANN core funding. 

2. In addition there was potential for secondary and supplementary sources of funds including the cctlds, voluntary contributions and fees for specific services.

3. Budgeting should be based on certainty and specific functions but there should be no cherry-picking of services leaving other important ICANN functions under-funded.

4. With the exception of meeting or secretariat fees, revenues for ICANN should not come from governments.

Agenda item 2. Advisory Bodies

Ph. Sheppard introduced this saying that one major difference in the Lynn proposal and the present situation, is the link with the constituencies. Today constituencies elect the NC and the NC seeks policy consensus and elects some board members. This direct link in participation is broken in the proposed system.

Thomas Roessler proposed an improved way of policy development with a task force structure: 
-involve different constituencies and other groups as needed
- coordination by an independent, qualified, professional, neutral staff person who would be responsible for written reports and strict timelines.

Ph. Sheppard asked for the Names Council view on the difference between the process today, which is a bottom-up, binding consultation process, to the Lynn model proposal which is an advisory consultation body.

The views expressed:

- significant improvement can be made to the existing process
- there was no support 
for an advisory body only.
- a Board should have power to act on its own in certain situations. Process debates today would diminish is this reality were recognised in the current process. A supermajority requirement would be a way forward.
- the Board should have an oversight role to see the process is applied but should not be able to create policy without the SOs.

There is broad agreement among the Names Council members that the existing model is the right one, but that there is room for improvement. The Task Force model for policy building is also desirable and would be improved greatly with dedicated staff support.

The Names Council continues to endorse the ccTLDs desire to form its own Supporting Organisation and still favours a separate ccTLD organisation in whatever new ICANN there is.

In closing Thomas Roessler requested the Chair draft a set of consensus recommendations by the next call. The Chair agreed.

The teleconference ended at 17:10

Next NC teleconference will be held on Thursday 18 April at 15:00 Paris time, UTC 14:00 and focus on Board Composition and participation.

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