Dear All, Please find below the notes and action items from today’s new gTLD Auction Proceeds meeting. Please note as summarized in the notes that staff will make the discussed revisions to the draft Initial Report and circulate to the CCWG. The CCWG will have an opportunity to review and submit further comments on the revised draft. Kind regards, Emily NOTES: 1. Roll Call 2. Welcome & DOI/SOI Updates * No updates. 3. Overview of input received on draft Initial Report * On screen: updated draft Initial Report that was circulated with the agenda. * Staff has inserted into the document the comments submitted by CCWG members. * Where changes are not controversial, staff suggested edits in response to comments from CCWG. If CCWG has additional input or concerns about the suggested edits, please share with the group. * For the comments where staff was not easily able to suggest edits, comments are highlighted in yellow. Staff will walk through these items so that the CCWG can discuss further. * Discussion Item: Comment on page 6 from Judith Hellerstein regarding description of Mechanism A: “In Mechanism 1, I have heard that there is also a possibility of outsourcing and I think this needs to be cleared up as itis written this is not clear.” Staff response: “This is presumably an implementation question? Not sure if this is something that can be confirmed at this stage as it may depend on what expertise is internally available and what isn’t? For example, if a specific type of audit is to be carried out, this may need to be outsourced? Should this be called out to be further addressed during implementation?” * Question from staff: Is there anything specific the group thinks can be included at this time with respect to outsourcing? Or can text simply be added indicating that the issue of outsourcing should be explored in implementation phase. * Comment - It is likely that certain items will be outsourced, such as audits. * One perspective - ICANN or another organization can outsource pretty much anything. This could include tasks or functions and could change over time. We should assume that some things may be outsourced based on needs. If there is something specific that we think must not be outsourced we can specify that. * ACTION ITEM 1: (Judith Hellerstein comment on page 6) Add footnote to indicate that following standard business practices and existing ICANN practices, the issue of outsourcing and whether is it necessary in some instances will be addressed in implementation. Include the example of audits in this footnote. * Discussion Item: Comment on page 6 from Marilyn regarding staffing concerns related to sunsetting. Staff added a response that this appears to be an implementation issue. * ACTION ITEM 2: (Marilyn Cade comment on page 6) staff to add a footnote indicating that details about staffing concerns related to sunsetting of the mechanism this will be addressed in implementation. To be confirmed with Marilyn that this approach is acceptable. * Suggestion - we may want to add additional text to the report describing the implementation phase and what will happen during this phase. * Discussion Item: Comment from Marilyn Cade on page 7 regarding “minimal” start-up process Mechanisms A and B. In response, staff requested input about how further information could be obtained or whether these are details that are to be developed as part of the implementation process? * ACTION ITEM 3: (Marilyn Cade comment on page 7) Edit to clarify that additional discussion will take place at the implementation phase regarding the exact costs at a later phase. The term "minimal" indicates that the costs will be relatively low compared to C and D. * The Board will conduct a feasibility assessment to flesh out the possible costs for the recommended mechanisms prior to proceding with implementation. This will likely result in gathering additional information about costs. * Discussion Item: Comment from Judith Hellerstein on page 7 requesting clarification of the division of labor for mechanism B. * Staff has added clarification to the text on what a DAF does and how roles are divided in practice. If the CCWG would like to provide further guidance or seek additional information, staff can support. * Feedback - add that additional work will need to be done to define the precise structure and division of work for the two entities. * The original intent was that ICANN would select a partner organization. There are different possible arrangements. We have not really discussed partnering with multiple entities. * Suggestion: this could be a question for the Initial Report to request feedback about how this should be divided. * Suggestion: focus on an arrangement where the work is subdivided between two organizations and leave it to ICANN to determine how this work should be subdivided with an opportunity for the Board to intervene. * ACTION ITEM 4: (Judith Hellerstein comment on page 7) Add text that the precise division of labor will be determined in implementation. CCWG to provide additional input on the mailing list if they have suggestions to clarify further. * In ALAC discussions, some envisioned that outsourcing would occur for project selection, while others envisioned the external entity would take on different responsibilities. It was not clear from the way we formulated this text what was intended. We want to make sure that if people are opting for this mechanism, they are all envisioning the same thing. * Discussion Item: Comment from Ching Chiao on page 7 requesting clarification on the division of labor. * This appears to be related to Judith's comment. See action item above. * Discussion Item: Comment on from Ching Chiao on page 7 requesting clarification on the difference between mechanisms B and D. * ACTION ITEM 5: (Ching Chiao comment on page 7): Clarify in the text that in mechanism B there is shared responsibility between ICANN and the external org, whereas with Mechanism D the work is outsourced but ICANN maintains oversight. This can be added to the text of the descriptions. Additional work will be needed to determine the details of the arrangement between the two entities. * Ching will submit additional comments about the two mechanisms B and D. * Discussion Item: Comment from Judith Hellerstein on page 8 regarding difficulty to get a firm for mechanism C. * This appears to be based on a misunderstanding. The question was based on a discussion that it might be difficult to completely outsource the function but dictate how the funds would be used under mechanism D. * No additional action needed on this comment. * In the past, we discussed that foundations are typically open-ended, not established for a limited period of time. * Comment: administratively it is not difficult to set up a foundation, but selecting staff and determining how to run it is costly and time consuming. * Comment: Mechanism B and D share the difficulty of maintaining the control while sharing the responsibility. This can be an issue with a DAF as well. DAFs have their own rules that they follow when you work with them. When we actually explore the possibilities of working with specific DAFs we may find that they are not able to do what we want them to do. * ACTION ITEM 6: Add text to the description of mechanism B, clarifying that it would need to be further explored whether there is an organization that can meet ICANN’s requirements. * ACTION ITEM 7: further emphasize in the descriptions of the different mechanisms that this is a one-off allocation, which must be factored into any decision about a mechanism. For example, foundations are not typically formed for short-term purposes. * Discussion Item: Comment from Marilyn Cade on page 9 regarding startup costs for Mechanism C. * Staff response – request for clarification about whether time for IRS approval, legal fees to draft bylaws and agreements are necessary for mechanisms A and B. * One issue that has surfaced is that every action that ICANN Board and Org takes is subject to accountability mechanisms. Depending on the setup, the Board has some concerns about individual challenges to grant decisions. * The Board has concerns about using a great deal of the funds in these accountability mechanisms. * In grantmaking processes, there is language that indicates that decisions are final, but it might be difficult to use this language in the ICANN environment. * It is conceivable that a Bylaws change might be needed to make sure that granting processes are excluded from accountability mechanisms. * ACTION ITEM 8: (Marilyn Cade comment on page 9) Add to startup costs that possible changes to bylaws may be needed and that there may be associated with legal fees for mechanisms A and B. The only difference would be that they do not require IRS approvals that will be required for Mechanism C. * Section 4.2 is a new section calling out elements of the preamble in response to comments that the preamble should be more prominently featured. * ACTION ITEM 9: In the new section 4.2, add footnote with quote from Board letter regarding the text "in service of ICANN's mission" * Discussion Item: Comments from Judith Hellerstein and Maureen Hilyard on Page 22 noting that regarding funds used by the ICANN organization distinct from the granting process, for example to replenish the reserve fund. Both comments disagree with this use of funds. * Clarification - comment is focused on the general funding of the reserve. Funding of specific projects might be more appropriate. * The CCWG did not discuss in depth whether there should be a replenishment of the reserve fund. * Some support expressed for allowing ICANN or constituent part being eligible through the same channels as other projects. * The reserve fund issue is the subject of a seperate conversation, therefore it is unclear if this discussion should also be undertaken within the CCWG. * Question: where is seperate conversation occuring regarding reserve fund? * Response: It would be a decision taken by the Board in collaboration with the SO/AC chairs. * Does the seperate conversation preclude the CCWG from having an opinion on this topic in parallel? * It might be even more complicated if these two tracks happen in parallel without the CCWG providing input. * ACTION ITEM 10: (Comments from Judith Hellerstein and Maureen Hilyard on Page 22) Clarify in a footnote that there is a separate conversation occuring regarding funds going to the reserve fund and make clear where this discussion is taking place (primarily at the Board level in collaboration with SO/AC chairs - to be confirmed by Becky). Focus response to this charter question on the second scenario, in which funds are allocated through a granting process. Any decision about an allocation outside of the granting process would need to take place within ICANN and not through an external organization. * Comment: If funds are allocated to ICANN through the chosen mechanism, the rules for the granting process would need to be completely rewritten. * Question: Does the CCWG want to make a recommendation regarding whether ICANN or a part of ICANN can apply for grant funds? Or should this remain as an open question for community input in the public comment? * Input: some support for puting this forward as a question for comunity feedback. * ACTION ITEM 11: Add in response to charter question 10 that at this stage the CCWG is not putting forward a recommendation about whether ICANN or a part of ICANN may be a grant recipient. The CCWG is seeking community input on this issue. * Preamble on page 38: a section of the text appears to be a duplication of a part which was rewritten and included later in the preamble. Staff proposes to remove the highlighted text. If this is incorrect, CCWG is encouraged to let staff know. 4. Determine how to deal with any remaining issues, if any. ACTION ITEM 12: Staff will update with proposed changes, recirculate to the group by the end of this week. CCWG is encouraged to suggest any further edits that need to be applied. 5. Confirm next steps and next meeting, if needed * Based on the input and conversation today, it does not appear that there are major outstanding issues. * Suggestion: schedule call in two weeks as a placeholder with the option to cancel if remaining edits can be resolved on the mailing list. This meeting would be on the 4th of October. If there are only a few items to discuss the call can be shorter than the allocated time. * Target date is 8 October to publish the Initial Report. ACTION ITEM 13: Staff will draft and share with the CCWG announcement regarding the public comment to make sure everyone is comfortable with the langauge. Emily Barabas | Policy Manager ICANN | Internet Corporation for Assigned Names and Numbers Email: emily.barabas@icann.org | Phone: +31 (0)6 84507976