Dear all, Following the series of emails exchanged on the Bylaws Matrix and the Approve or Veto terminology, Counsel had kindly clarified that the wording came directly form the language used in the CWG’s final proposal. We have reached out to the CWG co-chairs and began coordinating to standardize language and take care of any terminology that could lead to error or misinterpretation. Thanks to all who flagged issues on the Matrix. We will update you as it gets adjusted. Best regards, León
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De: "Gregory, Holly" <holly.gregory@sidley.com> Asunto: ICANN Bylaws Matrix and "Approve or Veto" Fecha: 19 de agosto de 2015 6:33:41 GMT-5 Para: León Felipe Sánchez Ambía <leonfelipe@sanchez.mx>, Mathieu Weill <mathieu.weill@afnic.fr>, "Thomas Rickert" <thomas@rickert.net>, acct-staff <acct-staff@icann.org> Cc: "Boucher, Rick" <rboucher@sidley.com>, "Clark, Michael A." <mclark@sidley.com>, "Flanagan, Sharon" <sflanagan@sidley.com>, "Fuller, Miles" <wfuller@sidley.com>, "Gregory, Holly" <holly.gregory@sidley.com>, "Hilton, Tyler" <thilton@sidley.com>, "Hofheimer, Joshua T." <jhofheimer@sidley.com>, "Boelter, Jessica C.K." <jboelter@sidley.com>, "Kerry, Cameron" <ckerry@sidley.com>, "McNicholas, Edward R." <emcnicholas@sidley.com>, "Mohan, Vivek" <vivek.mohan@sidley.com>, "Tam, Tennie H." <tennie.tam@sidley.com>, "Zagorin, Janet S." <jzagorin@sidley.com>
Dear Co-Chairs, There has been a lot of chatter on email in the CCWG Accountability group about language in the CWG bylaws matrix regarding the ability of the community to "approve or veto" the ICANN budget. This is the language that is in the CWG final proposal as indicated in the relevant highlighted extracts below and is not an error. We agree that the language will ultimately need to be conformed with CCWG's proposal and will make a note in the matrix. We believe it likely that CWG will accept the formulation proposed by CCWG on this dependency given the detailed work that the CCWG has expended on it. Please consider forwarding this email to the group. Kind regards, Holly
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From: Grapsas, Rebecca Sent: Wednesday, August 19, 2015 06:10:17 AM To: Gregory, Holly; Flanagan, Sharon Subject: ICANN Bylaws Matrix
Extracts from CWG Proposal (June 11, 2015):
Para 105. While this proposal originates from within the names community, it anticipates that, for reasons of coherence of the IANA function and overall operational logistics, all of the IANA functions will be transferred to PTI. However, it is not clear at the time of writing whether the other operational communities will undertake to contract directly with PTI (similar to the manner in which this response envisages ICANN will do), or whether those communities will have a contract with ICANN. If the other operational communities contract directly with PTI, then those communities will need to determine the terms of their contract with PTI for the support of their respective functions. On the other hand, if the other operational communities enter into a contract with ICANN, then ICANN will need to subcontract the performance of the functions to PTI. Which of these approaches is followed by the other operational communities is not relevant for the purposes of the present proposal, so long as those details are not inconsistent with this proposal. In any case, the arrangements for the non-names IANA functions are out of scope for this document except to the extent they impinge directly on the names functions. The CWG-Stewardship has also agreed that approval of all changes to the content of the Root Zone will no longer need authorization (as is currently the case) and that external communications and reporting will no longer need external approval post-transition. This final proposal attempts to meet all of the above requirements by: … · Ensuring ICANN accepts input from the multistakeholder community with respect to the annual IANA operations budget.
Para 106. The CWG-Stewardship proposal is significantly dependent and expressly conditioned on the implementation of ICANN-level accountability mechanisms by the Cross Community Working Group on Enhancing ICANN Accountability (CCWG-Accountability) as described below. The co-chairs of the CWG-Stewardship and the CCWG-Accountability have coordinated their efforts and the CWG-Stewardship is confident that the CCWG-Accountability recommendations, if implemented as envisaged, will meet the requirements that the CWG-Stewardship has previously communicated to the CCWG. If any element of these ICANN level accountability mechanisms is not implemented as contemplated by the CWG-Stewardship proposal, this CWG-Stewardship proposal will require revision. Specifically, the proposed legal structure and overall CWG-Stewardship proposal requires ICANN accountability in the following respects: 1. ICANN Budget and IANA Budget. The ability for the community to approve or veto the ICANN budget after it has been approved by the ICANN Board but before it comes into effect. The community may reject the ICANN Budget based on perceived inconsistency with the purpose, mission and role set forth in ICANN’s Articles and Bylaws, the global public interest, the needs of ICANN stakeholders, financial stability or other matters of concern to the community. The CWG-Stewardship recommends that the IFO’s comprehensive costs should be transparent and ICANN’s operating plans and budget should include itemization of all IANA operations costs to the project level and below as needed. An itemization of IANA costs would include “Direct Costs for the IANA department”, “Direct Costs for Shared resources” and “Support functions allocation”. Furthermore, these costs should be itemized into more specific costs related to each specific function to the project level and below as needed. PTI should also have a yearly budget that is reviewed and approved by the ICANN community on an annual basis. PTI should submit a budget to ICANN at least nine months in advance of the fiscal year to ensure the stability of the IANA services. It is the view of the CWG-Stewardship that the IANA budget should be approved by the ICANN Board in a much earlier timeframe than the overall ICANN budget. The CWG (or a successor implementation group) will need to develop a proposed process for the IANA-specific budget review, which may become a component of the overall budget review. 2. Community Empowerment Mechanisms. The empowerment of the multistakeholder community to have the following rights with respect to the ICANN Board, the exercise of which should be ensured by the related creation of a stakeholder community / member group:
(a) The ability to appoint and remove members of the ICANN Board and to recall the entire ICANN Board;
(b) The ability to exercise oversight with respect to key ICANN Board decisions (including with respect to the ICANN Board’s oversight of the IANA functions) by reviewing and approving (i) ICANN Board decisions with respect to recommendations resulting from an IFR or Special IFR and (ii) the ICANN budget; …
Para 109. At the outset, PTI will have ICANN as its sole member and PTI will therefore be a controlled affiliate of ICANN. ICANN will provide funding and administrative resources to PTI through an agreed-upon budget.
Para 162. In order for the multistakeholder community to steward the IANA Functions, the CWG-Stewardship recommends that: 1) The IFO’s comprehensive costs should be transparent for any future state of the IANA Function.
2) Future Fiscal Year (FY) ICANN Operating Plans & Budgets, and if possible even the FY16 ICANN Operating Plan & Budget, include at a minimum itemization of all IANA operations costs in the FY ICANN Operating Plan & Budget to the project level and below as needed.
Para 163. Further details on the expected detail, based on the information provided in relation to the FY15 budget, can be found in Annex P. Furthermore, the CWG-Stewardship has identified a number of items for future work that can be found in Annex Q. In relation to PTI, the CWG-Stewardship recommends that PTI should develop and annually update a four-year strategic plan, which should outline strategic priorities, while PTI should also have a yearly budget that is reviewed by the ICANN community. A fully approved budget should be developed on an annual basis. PTI should submit a budget [FN 22] to ICANN at least nine months in advance of the fiscal year to ensure the stability of the IANA services. It is the view of the CWG-Stewardship that the IANA budget should be approved by the ICANN Board in a much earlier timeframe than the overall ICANN Budget. PTI’s actual financial performance should be measured monthly against the PTI budget, and should be reported to the PTI Board. In addition to any statutory requirements, it is the view of the CWG that an independent financial audit of PTI’s financial statements must also be required. [FN 22: In developing its budget, the CWG-Stewardship recommends that PTI review best practices of other similar organizations.]
Para 194. The CWG-Stewardship’s proposed changes are to be implemented after NTIA approval of the IANA Stewardship Transition plan. Some changes are ready to be implemented, and others may require further assessment by the ICG as they may affect and be of interest to other communities involved in the IANA Stewardship Transition. For all changes, including changes that do not require further assessment by the ICG, the community will work with ICANN in implementation. The CWG-Stewardship expects that the following implementation items could be completed in approximately three to four months, in accordance with the advice of independent legal counsel: (1) identifying the ICANN assets that relate to the IANA functions to be assigned to PTI and assigning those assets to PTI pursuant to an assignment agreement to be entered into between ICANN and PTI, (2) incorporating PTI and drafting the PTI governance documents (i.e., articles of incorporation and bylaws) and (3) drafting, negotiating and finalizing the ICANN-PTI Contract.35 The CWG-Stewardship has attempted an initial list of elements for implementation as follows: … · IANA Budget: The CWG-Stewardship worked closely with ICANN Finance in developing recommendations for transparent budget processes and itemizations regarding IANA operations costs. Recommendations on ICANN’s budgeting process can be implemented as further details of the CWG Accountability proposal are defined and approved. Developing a PTI budget is part of, and dependent on, the establishment of PTI. There are other recommendations (in particular, the ability of the community to approve/veto the ICANN budget) that have been requested of the CCWG-Accountability as part of a key dependency with the CCWG-Accountability as soon as their work is finalized. … · Community empowerment mechanisms: These have been requested of the CCWG-Accountability as part of a key dependency with the CCWG-Accountability as soon as their work is finalized. [FN 38: In particular, mechanisms such as: the ability to recall the ICANN Board, the ability to exercise oversight with respect to key ICANN Board decisions including decisions relating to periodic or special reviews of the IANA functions undertaken through the IFR and approval of the ICANN budget, the ability to approve changes to ICANN’s fundamental bylaws as well as the related creation of a stakeholder community / member group in order ensure the ability to exercise these kinds of rights. ]
Para 434. CCWG Accountability Dependencies Enumeration of the relevant accountability mechanisms relating to the IANA Budget: · The ability for the community to approve or veto the ICANN budget after it has been approved by the ICANN Board but before it comes into effect. The community may reject the ICANN Budget based on perceived inconsistency with the purpose, mission and role set forth in ICANN’s Articles and Bylaws, the global public interest, the needs of ICANN stakeholders, financial stability or other matters of concern to the community. The CWG-Stewardship recommends that the IFO’s comprehensive costs should be transparent and ICANN’s operating plans and budget should include itemization of all IANA operations costs to the project level and below as needed. An itemization of IANA costs would include “Direct Costs for the IANA department”, “Direct Costs for shared resources” and “Support functions allocation”. Furthermore, these costs should be itemized into more specific costs related to each specific function to the project level and below as needed. PTI should also have a yearly budget that is reviewed and approved by the ICANN community on an annual basis. PTI should submit a budget to ICANN at least nine months in advance of the fiscal year to ensure the stability of the IANA services. It is the view of the CWG-Stewardship that the IANA budget should be approved by the ICANN Board in a much earlier timeframe than the overall ICANN budget. The CWG (or a successor implementation group) will need to develop a proposed process for the IANA-specific budget review, which may become a component of the overall budget review.
Annex S – Draft Proposed Term Sheet: Budget Meetings; Funding. ICANN will meet [annually] with the [President of PTI] to review and approve the budget for the IANA Naming Services for the next [three] years. ICANN shall fund PTI at agreed budget levels.
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