Dear all,
The message included below is sent to you on behalf of the CCWG Auction Proceeds co-chairs, Erika Mann and Ching Chiao.
We would like to take this opportunity to inform you as well, that based on the discussions by the CCWG, the leadership team drafted some questions, which were sent in the meanwhile to the Board
liaisons (Becky Burr and Maarten Botterman), to ICANN Finance (Xavier Calvez) and to ICANN legal (Sam Eisner). Please find the questions included in attachment.
Best regards,
Joke Braeken
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Dear all,
Thank you all for the input you have provided on the draft Initial Report, and in particular, the thoughtful comments you have made regarding
the mechanisms under consideration. With the agenda for Wednesday’s call, you have received a spreadsheet summarizing the substantive comments on the different mechanisms. In reviewing the comments, the leadership team has noticed several themes and would
like share some observations in advance of Wednesday’s call:
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Several comments sent to the mailing list spoke to and raised questions about the level of independence that would exist under each mechanism.
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As a reminder, this is a topic the CCWG has discussed extensively in the past. These discussions, as well as input from ICANN Org and the ICANN Board, are documented in Working Group materials. In particular, I would like to draw your attention to the following
resources. It is the responsibility of all CCWG members to stay up to date with CCWG resources so that conversations are not repeated.
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I encourage you to review the attached graphics, which were shared in our meeting in Marrakech and have since been updated based on CCWG feedback. The graphics show the division of roles and responsibilities under the different mechanisms, as well as elements
that will be the same regardless of the mechanism chosen. These graphics should shed light on some of the questions and concerns raised regarding independence.
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In addition, the ICANN Board and ICANN Org have previously provided guidance to the CCWG on the topic of independence. This input is documented in FAQ sheets on the CCWG wiki
here.
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ICANN Org previously
responded to the question, “If the CCWG recommends that a foundation is to be created (mechanism C), does that mean there is more independence?” ICANN Org provided the following response: “ICANN will always be responsible for making sure that funds are
provided to appropriate organizations both in confirmation of mission and in making sure that funds are provided in a manner consistent with maintaining ICANN’s 501(c)(3) status. In maintaining the Board’s fiduciary duty, the Board cannot cede this responsibility
to the community. This is an important limitation, which does not go away even if, for example, the proceeds are initially provided to a foundation, which then in turn administers a process for identifying appropriate recipients. In a foundation scenario,
ICANN would likely have a lot less direct involvement in decisions on individual awards, when compared to ICANN directly administering a program to make awards. However, in the foundation scenario, ICANN would still have to make sure that the rules for the
foundation are set up in a way that the processes are reliable, verifiable and auditable, and there would still be a need to for ICANN to measure (through reports or otherwise) that the grants to end recipients were in alignment with the requirements.”
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The ICANN Board previously
responded to the question, “Does the Board’s role change, dependent on the mechanism that is chosen?” The ICANN Board responded: “The ICANN Board remains responsible for all auction proceeds being appropriately disbursed, even if a third party runs
part or all of the process of receiving, evaluating, or disbursing the auction proceeds. The Board is responsible for acting as trustees of the organization’s assets and exercising due diligence to oversee that whatever organization(s) is disbursing assets
is well-managed and that its financial situation remains sound. Accordingly: *Proceeds should be allocated in tranches over a period of years to ensure the Board is meeting its obligations; *The Board has not yet come to a position on whether larger amounts
would require Board sign off. The Board is responsible for making sure that ICANN’s mission is observed at all points throughout the process, and any disbursement mechanism must have processes and procedures to ensure that auction proceeds are used in a manner
that contributes directly to ICANN’s mission.
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The comments on the mailing list indicate that there may be some confusion about the role of the “independent panel” in the evaluation of grant applications and selection of grant recipients, as well as who will
sit on that panel.
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This is also a topic that has been discussed extensively by the CCWG. These discussions, as well as input from ICANN Org and the ICANN Board on this topic, are documented in Working Group materials. In particular, the FAQ documents posted on the wiki
here summarize feedback that the ICANN Board and ICANN Org have previously provided on a range of topics, including the independent panel. In particular two responses that the Board
has previously provided are relevant to this discussion. Please review this input, so that conversations are not repeated:
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The ICANN Board previously
responded to the question, “What is the Board’s perspective on the evaluation of applications?” The Board responded: “Regarding the evaluation of the applications, the Board notes that an independent panel is an important aspect that should be considered
in the CCWG’s recommendations. This panel should be independent and should have appropriate conflict of interest protections built in, in support of the fiduciary duties of ICANN’s directors and officers. The independent panel would assess applications and
decide which applications will be successful in securing funding for that year’s tranche. The independent character of the panel would need to be defined and proper controls will need to be put in place to guide the work of the panel (see below for some considerations).
The panel’s recommendations would be provided to the ICANN Board for approval of the slate of successful applicants for that year, and the approved slate would then be provided to the persons/entity responsible for distribution.”
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The ICANN Board previously
responded to the question, “What role does the Board expect to play in relation to the evaluation of applications?” The ICANN Board responded: “As previously communicated, the Board will not be taking decisions on individual applications but will instead
focus its consideration of the slate on whether the rules of the process were followed by the independent panel. The principles supporting the independent panel should also include consistency over time (i.e., the composition of the panel should always include
some panelists of the previous year to build on their experience); and cost-effectiveness (i.e, to focus on the use of auction proceeds to support desired activities and goals, as opposed to administrative costs).”
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Recent comments on the mailing list from the ICANN Board liaisons and ICANN Org reiterate the points above. The ICANN Board, in mailing list discussion, stated: “Neither the Board nor Org should play a decision-making role with respect to individual applications.
Evaluations and selection must be done by a completely independent panel.” ICANN Org further clarified that under mechanism A, “ICANN org would be responsible for contracting with an external, independent panel and would have to build in the appropriate mechanisms
to maintain independence of that panel, similar to what has been done for other evaluation processes over the years.”
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There have been questions and concerns raised about the relative implementation costs of the mechanisms.
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The co-chairs have submitted follow-up questions to ICANN Org on this topic to support further discussion.
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There appears to be some confusion about what Mechanism D entails and how it is different from Mechanism B.
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Mechanism D was a model that envisioned complete outsourcing to an external entity. Mechanism B allows for a partnership between ICANN Org and an external entity, in which certain responsibilities can be divided between the two.
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Some of the recent messages on the mailing list seemed to propose a form of Mechanism D.
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At this stage, Mechanism D has been eliminated from consideration. The leadership team does not believe it is appropriate to reintroduce Mechanism D into deliberations at this time.
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There appears to be different views on the division of responsibilities between ICANN and the External Charitable Entity under Mechanism B.
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At this stage, the CCWG has not agreed on any single model for the division of responsibilities under Mechanism B.
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Please see the attached chart on Division of Responsibilities for additional information.
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There appear to be different assumptions about the role of the ICANN community.
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At this stage, the CCWG is considering a proposal on the role of the community, which is included in page 21-22 of the draft Final Report sent with the agenda. This will be discussed further on tomorrow’s call.
We look forward to further discussion during our call tomorrow.
Best regards,
Erika Mann, Ching Chiao | co-chairs to the CCWG New gTLD Auction Proceeds
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Kind regards,