Re: [CWG-Stewardship] [client com] Draft: Summary of Legal Structure for CWG Proposal
My comments about the S-A document 20179247_3 on legal structure: 1] It is not clear who is going to decide about the concepts of designator vs. members (2nd para, page3). Is this an item for the CCWG to resolve? 2] Items (a) & (c) in section "The weaknesses of the proposed structure are as follows." (page 3): *"(a) Requires forming a new entity and on an ongoing basis attending to a set of associated corporate formalities, although those can be fairly minimal;"* " (c) May have some negative impact on operational efficiency due to the *functional separation, and the separate legal status will introduce some * *additional costs, although those should not be significant." * I suggest to delete the two statements pointed here by an underline/italics. Both statements are seemly subjectives and tend to steer the reader to think that this will be easy to implement and that it will not be costly. There has not been any deep analysis done on these to support either statement. -ed On Sat, Apr 18, 2015 at 1:49 PM, Client Committee List for CWG < cwg-client@icann.org> wrote:
Dear All,
Attached is a summary of the current legal structure under consideration by the CWG. This also includes the CCWG dependencies.
Please let us know if you have any comments or would like to discuss.
Best regards,
Sharon
*SHARON* *FLANAGAN* Partner
*Sidley Austin LLP* +1.415.772.1271 sflanagan@sidley.com
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I think that Eduardo is probably right that we really don’t know whether the increased cost for the legal separation will be significant or not without a detailed analysis by the Finance Team. Now that we are specifically leaning toward the legal separation approach, I suggest that we request an analysis by the Finance Team right away. It will take them awhile to do it and they will probably have some questions for us but the sooner we get that started the better. Xavier understands that a lot of the shared IANA costs can still be shared so that will minimize the increase but there will still be increases. As far as the language in © below, I suggest we say something along these lines instead saying ‘although those should not be significant’: “The significance of the increased costs cannot be determined until a detailed analysis is done by the ICANN Finance Team, but the CWG has requested that analysis and expects to have at least preliminary results before the public comment period ends.” Chuck From: cwg-stewardship-bounces@icann.org [mailto:cwg-stewardship-bounces@icann.org] On Behalf Of Eduardo Diaz Sent: Saturday, April 18, 2015 4:43 PM To: cwg-stewardship@icann.org Subject: Re: [CWG-Stewardship] [client com] Draft: Summary of Legal Structure for CWG Proposal My comments about the S-A document 20179247_3 on legal structure: 1] It is not clear who is going to decide about the concepts of designator vs. members (2nd para, page3). Is this an item for the CCWG to resolve? 2] Items (a) & (c) in section "The weaknesses of the proposed structure are as follows." (page 3): "(a) Requires forming a new entity and on an ongoing basis attending to a set of associated corporate formalities, although those can be fairly minimal;" " (c) May have some negative impact on operational efficiency due to the functional separation, and the separate legal status will introduce some additional costs, although those should not be significant." I suggest to delete the two statements pointed here by an underline/italics. Both statements are seemly subjectives and tend to steer the reader to think that this will be easy to implement and that it will not be costly. There has not been any deep analysis done on these to support either statement. -ed On Sat, Apr 18, 2015 at 1:49 PM, Client Committee List for CWG <cwg-client@icann.org<mailto:cwg-client@icann.org>> wrote: Dear All, Attached is a summary of the current legal structure under consideration by the CWG. This also includes the CCWG dependencies. Please let us know if you have any comments or would like to discuss. Best regards, Sharon SHARON FLANAGAN Partner Sidley Austin LLP +1.415.772.1271<tel:%2B1.415.772.1271> sflanagan@sidley.com<mailto:sflanagan@sidley.com> **************************************************************************************************** This e-mail is sent by a law firm and may contain information that is privileged or confidential. If you are not the intended recipient, please delete the e-mail and any attachments and notify us immediately. **************************************************************************************************** _______________________________________________ Cwg-client mailing list Cwg-client@icann.org<mailto:Cwg-client@icann.org> https://mm.icann.org/mailman/listinfo/cwg-client -- NOTICE: This email may contain information which is confidential and/or subject to legal privilege, and is intended for the use of the named addressee only. If you are not the intended recipient, you must not use, disclose or copy any part of this email. If you have received this email by mistake, please notify the sender and delete this message immediately.
Respectfully, I disagree with Eduardo and Chuck on the following issue: 2] Items (a) & (c) in section "The weaknesses of the proposed structure are as follows." (page 3): *"(a) Requires forming a new entity and on an ongoing basis attending to a set of associated corporate formalities, although those can be fairly minimal;"* " (c) May have some negative impact on operational efficiency due to the *functional separation, and the separate legal status will introduce some **additional costs, although those should not be significant." * I suggest to delete the two statements pointed here by an underline/italics. Both statements are seemly subjectives and tend to steer the reader to think that this will be easy to implement and that it will not be costly. There has not been any deep analysis done on these to support either statement. As a general point, we have asked counsel to provide us not only with their technical expertise, but also with the benefit of their practical experience. Here they are telling us two things based on their experience: -- corporate formalities "can be fairly minimal." -- additional costs introduced by operating PTI with a separate legal status "should not be significant." Our counsels' practical experience certainly includes forming corporate entities and attending to corporate formalities (sometimes called "corporate housekeeping") -- I'd daresay among our counsel they have done and continue to do this for hundreds (if not thousands) of corporations.
From my own experience and knowledge, corporate formation and corporate housekeeping are essentially ministerial tasks, and are neither particularly complex or time-consuming (though it requires some familiarity and experience to do these tasks). It's really a fairly objective and entirely reasonable statement for someone with the requisite knowledge to say that these "can be fairly minimal." Indeed, I can't think of a scenario where attending to corporate formalities would not be fairly minimal.
Similarly, I'm fairly sure counsel have dealt many times with the costs associated with having business units in wholly-owned or controlled subsidiaries rather than divisions, and they are aware of what those costs are. Again this seems like a reasonable statement and one that I'm sure is made objectively. From my experience, the costs that are a direct result of running a business as a subsidiary, as opposed to as a business unit within the same entity, are not significant. In sum, I believe these are both reasonable and very unsurprising statements. I know that it is not the intent, but I think that giving the impression that the opposite (corporate formalities are not fairly minimal; costs resulting from operating a business as a subsidiary (vs. as a business unit) are significant) could be true creates FUD where there should be none. Therefore, I think it would be appropriate to accept this advice. If we don't want to accept counsel's advice, I don't think the appropriate response is to delete it. Rather, I think the appropriate action would be to ask counsel to explain the basis of the statements. Alternatively, we could insert "counsel advises" after "although" in each statement. Let me say that I don't believe we need to do either of these things. But, if the group is not willing to accept these and move on, these are the courses of action that should be considered. Greg On Sun, Apr 19, 2015 at 11:51 AM, Gomes, Chuck <cgomes@verisign.com> wrote:
I think that Eduardo is probably right that we really don’t know whether the increased cost for the legal separation will be significant or not without a detailed analysis by the Finance Team. Now that we are specifically leaning toward the legal separation approach, I suggest that we request an analysis by the Finance Team right away. It will take them awhile to do it and they will probably have some questions for us but the sooner we get that started the better. Xavier understands that a lot of the shared IANA costs can still be shared so that will minimize the increase but there will still be increases. As far as the language in © below, I suggest we say something along these lines instead saying ‘*although those should not be significant*’: “The significance of the increased costs cannot be determined until a detailed analysis is done by the ICANN Finance Team, but the CWG has requested that analysis and expects to have at least preliminary results before the public comment period ends.”
Chuck
*From:* cwg-stewardship-bounces@icann.org [mailto: cwg-stewardship-bounces@icann.org] *On Behalf Of *Eduardo Diaz *Sent:* Saturday, April 18, 2015 4:43 PM *To:* cwg-stewardship@icann.org *Subject:* Re: [CWG-Stewardship] [client com] Draft: Summary of Legal Structure for CWG Proposal
My comments about the S-A document 20179247_3 on legal structure:
1] It is not clear who is going to decide about the concepts of designator vs. members (2nd para, page3). Is this an item for the CCWG to resolve?
2] Items (a) & (c) in section "The weaknesses of the proposed structure are as follows." (page 3):
*"(a) Requires forming a new entity and on an ongoing basis attending to a set of associated corporate formalities, although those can be fairly minimal;"*
*" (c) May have some negative impact on operational efficiency due to the *
*functional separation, and the separate legal status will introduce some *
*additional costs, although those should not be significant." *
I suggest to delete the two statements pointed here by an underline/italics. Both statements are seemly subjectives and tend to steer the reader
to think that this will be easy to implement and that it will not be costly. There has not been any deep analysis done on these to support either statement.
-ed
On Sat, Apr 18, 2015 at 1:49 PM, Client Committee List for CWG < cwg-client@icann.org> wrote:
Dear All,
Attached is a summary of the current legal structure under consideration by the CWG. This also includes the CCWG dependencies.
Please let us know if you have any comments or would like to discuss.
Best regards,
Sharon
*SHARON* *FLANAGAN* Partner
*Sidley Austin LLP* +1.415.772.1271 sflanagan@sidley.com
**************************************************************************************************** This e-mail is sent by a law firm and may contain information that is privileged or confidential. If you are not the intended recipient, please delete the e-mail and any attachments and notify us immediately.
****************************************************************************************************
_______________________________________________ Cwg-client mailing list Cwg-client@icann.org https://mm.icann.org/mailman/listinfo/cwg-client
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+1 to Greg. Jordan On 20 April 2015 at 16:05, Greg Shatan <gregshatanipc@gmail.com> wrote:
Respectfully, I disagree with Eduardo and Chuck on the following issue:
2] Items (a) & (c) in section "The weaknesses of the proposed structure are as follows." (page 3):
*"(a) Requires forming a new entity and on an ongoing basis attending to a set of associated corporate formalities, although those can be fairly minimal;"*
" (c) May have some negative impact on operational efficiency due to the *functional separation, and the separate legal status will introduce some **additional costs, although those should not be significant." *
I suggest to delete the two statements pointed here by an underline/italics. Both statements are seemly subjectives and tend to steer the reader to think that this will be easy to implement and that it will not be costly. There has not been any deep analysis done on these to support either statement.
As a general point, we have asked counsel to provide us not only with their technical expertise, but also with the benefit of their practical experience. Here they are telling us two things based on their experience:
-- corporate formalities "can be fairly minimal." -- additional costs introduced by operating PTI with a separate legal status "should not be significant."
Our counsels' practical experience certainly includes forming corporate entities and attending to corporate formalities (sometimes called "corporate housekeeping") -- I'd daresay among our counsel they have done and continue to do this for hundreds (if not thousands) of corporations. From my own experience and knowledge, corporate formation and corporate housekeeping are essentially ministerial tasks, and are neither particularly complex or time-consuming (though it requires some familiarity and experience to do these tasks). It's really a fairly objective and entirely reasonable statement for someone with the requisite knowledge to say that these "can be fairly minimal." Indeed, I can't think of a scenario where attending to corporate formalities would not be fairly minimal.
Similarly, I'm fairly sure counsel have dealt many times with the costs associated with having business units in wholly-owned or controlled subsidiaries rather than divisions, and they are aware of what those costs are. Again this seems like a reasonable statement and one that I'm sure is made objectively. From my experience, the costs that are a direct result of running a business as a subsidiary, as opposed to as a business unit within the same entity, are not significant.
In sum, I believe these are both reasonable and very unsurprising statements. I know that it is not the intent, but I think that giving the impression that the opposite (corporate formalities are not fairly minimal; costs resulting from operating a business as a subsidiary (vs. as a business unit) are significant) could be true creates FUD where there should be none. Therefore, I think it would be appropriate to accept this advice.
If we don't want to accept counsel's advice, I don't think the appropriate response is to delete it. Rather, I think the appropriate action would be to ask counsel to explain the basis of the statements. Alternatively, we could insert "counsel advises" after "although" in each statement. Let me say that I don't believe we need to do either of these things. But, if the group is not willing to accept these and move on, these are the courses of action that should be considered.
Greg
On Sun, Apr 19, 2015 at 11:51 AM, Gomes, Chuck <cgomes@verisign.com> wrote:
I think that Eduardo is probably right that we really don't know whether the increased cost for the legal separation will be significant or not without a detailed analysis by the Finance Team. Now that we are specifically leaning toward the legal separation approach, I suggest that we request an analysis by the Finance Team right away. It will take them awhile to do it and they will probably have some questions for us but the sooner we get that started the better. Xavier understands that a lot of the shared IANA costs can still be shared so that will minimize the increase but there will still be increases. As far as the language in (c) below, I suggest we say something along these lines instead saying '*although those should not be significant*': "The significance of the increased costs cannot be determined until a detailed analysis is done by the ICANN Finance Team, but the CWG has requested that analysis and expects to have at least preliminary results before the public comment period ends."
Chuck
*From:* cwg-stewardship-bounces@icann.org [mailto: cwg-stewardship-bounces@icann.org] *On Behalf Of *Eduardo Diaz *Sent:* Saturday, April 18, 2015 4:43 PM *To:* cwg-stewardship@icann.org *Subject:* Re: [CWG-Stewardship] [client com] Draft: Summary of Legal Structure for CWG Proposal
My comments about the S-A document 20179247_3 on legal structure:
1] It is not clear who is going to decide about the concepts of designator vs. members (2nd para, page3). Is this an item for the CCWG to resolve?
2] Items (a) & (c) in section "The weaknesses of the proposed structure are as follows." (page 3):
*"(a) Requires forming a new entity and on an ongoing basis attending to a set of associated corporate formalities, although those can be fairly minimal;"*
*" (c) May have some negative impact on operational efficiency due to the *
*functional separation, and the separate legal status will introduce some *
*additional costs, although those should not be significant." *
I suggest to delete the two statements pointed here by an underline/italics. Both statements are seemly subjectives and tend to steer the reader
to think that this will be easy to implement and that it will not be costly. There has not been any deep analysis done on these to support either statement.
-ed
On Sat, Apr 18, 2015 at 1:49 PM, Client Committee List for CWG < cwg-client@icann.org> wrote:
Dear All,
Attached is a summary of the current legal structure under consideration by the CWG. This also includes the CCWG dependencies.
Please let us know if you have any comments or would like to discuss.
Best regards,
Sharon
*SHARON* *FLANAGAN* Partner
*Sidley Austin LLP* +1.415.772.1271 sflanagan@sidley.com
**************************************************************************************************** This e-mail is sent by a law firm and may contain information that is privileged or confidential. If you are not the intended recipient, please delete the e-mail and any attachments and notify us immediately.
****************************************************************************************************
_______________________________________________ Cwg-client mailing list Cwg-client@icann.org https://mm.icann.org/mailman/listinfo/cwg-client
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_______________________________________________ CWG-Stewardship mailing list CWG-Stewardship@icann.org https://mm.icann.org/mailman/listinfo/cwg-stewardship
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-- Jordan Carter Chief Executive *InternetNZ* 04 495 2118 (office) | +64 21 442 649 (mob) jordan@internetnz.net.nz Skype: jordancarter *A better world through a better Internet *
I agree with Jordan and Greg - these statements should be retained (or if necessary modified with the addition "counsel advises"). On 4/20/2015 6:21 AM, Jordan Carter wrote:
+1 to Greg.
Jordan
On 20 April 2015 at 16:05, Greg Shatan <gregshatanipc@gmail.com <mailto:gregshatanipc@gmail.com>> wrote:
Respectfully, I disagree with Eduardo and Chuck on the following issue:
2] Items (a) & (c) in section "The weaknesses of the proposed structure are as follows." (page 3):
*"(a) Requires forming a new entity and on an ongoing basis attending to a set of associated corporate formalities, _/although those can be fairly minimal/_;"* * * " (c) May have some negative impact on operational efficiency due to the *functional separation, and the separate legal status will introduce some **additional costs, _/although those should not be significant/_." * * * I suggest to delete the two statements pointed here by an underline/italics. Both statements are seemly subjectives and tend to steer the reader to think that this will be easy to implement and that it will not be costly. There has not been any deep analysis done on these to support either statement.
As a general point, we have asked counsel to provide us not only with their technical expertise, but also with the benefit of their practical experience. Here they are telling us two things based on their experience:
-- corporate formalities "can be fairly minimal." -- additional costs introduced by operating PTI with a separate legal status "should not be significant."
Our counsels' practical experience certainly includes forming corporate entities and attending to corporate formalities (sometimes called "corporate housekeeping") -- I'd daresay among our counsel they have done and continue to do this for hundreds (if not thousands) of corporations. From my own experience and knowledge, corporate formation and corporate housekeeping are essentially ministerial tasks, and are neither particularly complex or time-consuming (though it requires some familiarity and experience to do these tasks). It's really a fairly objective and entirely reasonable statement for someone with the requisite knowledge to say that these "can be fairly minimal." Indeed, I can't think of a scenario where attending to corporate formalities would not be fairly minimal.
Similarly, I'm fairly sure counsel have dealt many times with the costs associated with having business units in wholly-owned or controlled subsidiaries rather than divisions, and they are aware of what those costs are. Again this seems like a reasonable statement and one that I'm sure is made objectively. From my experience, the costs that are a direct result of running a business as a subsidiary, as opposed to as a business unit within the same entity, are not significant.
In sum, I believe these are both reasonable and very unsurprising statements. I know that it is not the intent, but I think that giving the impression that the opposite (corporate formalities are not fairly minimal; costs resulting from operating a business as a subsidiary (vs. as a business unit) are significant) could be true creates FUD where there should be none. Therefore, I think it would be appropriate to accept this advice.
If we don't want to accept counsel's advice, I don't think the appropriate response is to delete it. Rather, I think the appropriate action would be to ask counsel to explain the basis of the statements. Alternatively, we could insert "counsel advises" after "although" in each statement. Let me say that I don't believe we need to do either of these things. But, if the group is not willing to accept these and move on, these are the courses of action that should be considered.
Greg
On Sun, Apr 19, 2015 at 11:51 AM, Gomes, Chuck <cgomes@verisign.com <mailto:cgomes@verisign.com>> wrote:
I think that Eduardo is probably right that we really don’t know whether the increased cost for the legal separation will be significant or not without a detailed analysis by the Finance Team. Now that we are specifically leaning toward the legal separation approach, I suggest that we request an analysis by the Finance Team right away. It will take them awhile to do it and they will probably have some questions for us but the sooner we get that started the better. Xavier understands that a lot of the shared IANA costs can still be shared so that will minimize the increase but there will still be increases. As far as the language in © below, I suggest we say something along these lines instead saying ‘*/_although those should not be significant_/*’: “The significance of the increased costs cannot be determined until a detailed analysis is done by the ICANN Finance Team, but the CWG has requested that analysis and expects to have at least preliminary results before the public comment period ends.”
Chuck
*From:*cwg-stewardship-bounces@icann.org <mailto:cwg-stewardship-bounces@icann.org> [mailto:cwg-stewardship-bounces@icann.org <mailto:cwg-stewardship-bounces@icann.org>] *On Behalf Of *Eduardo Diaz *Sent:* Saturday, April 18, 2015 4:43 PM *To:* cwg-stewardship@icann.org <mailto:cwg-stewardship@icann.org> *Subject:* Re: [CWG-Stewardship] [client com] Draft: Summary of Legal Structure for CWG Proposal
My comments about the S-A document 20179247_3 on legal structure:
1] It is not clear who is going to decide about the concepts of designator vs. members (2nd para, page3). Is this an item for the CCWG to resolve?
2] Items (a) & (c) in section "The weaknesses of the proposed structure are as follows." (page 3):
*"(a) Requires forming a new entity and on an ongoing basis attending to a set of associated corporate formalities, /_although those can be fairly minimal_/;"*
*" (c) May have some negative impact on operational efficiency due to the *
*functional separation, and the separate legal status will introduce some *
*additional costs, /_although those should not be significant_/." *
**
I suggest to delete the two statements pointed here by an underline/italics. Both statements are seemly subjectives and tend to steer the reader
to think that this will be easy to implement and that it will not be costly. There has not been any deep analysis done on these to support either statement.
-ed
On Sat, Apr 18, 2015 at 1:49 PM, Client Committee List for CWG <cwg-client@icann.org <mailto:cwg-client@icann.org>> wrote:
Dear All,
Attached is a summary of the current legal structure under consideration by the CWG. This also includes the CCWG dependencies.
Please let us know if you have any comments or would like to discuss.
Best regards,
Sharon
*SHARON**FLANAGAN* Partner
*Sidley Austin LLP** *+1.415.772.1271 <tel:%2B1.415.772.1271> sflanagan@sidley.com <mailto:sflanagan@sidley.com>
**************************************************************************************************** This e-mail is sent by a law firm and may contain information that is privileged or confidential. If you are not the intended recipient, please delete the e-mail and any attachments and notify us immediately.
****************************************************************************************************
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*NOTICE:* This email may contain information which is confidential and/or subject to legal privilege, and is intended for the use of the named addressee only. If you are not the intended recipient, you must not use, disclose or copy any part of this email. If you have received this email by mistake, please notify the sender and delete this message immediately.
_______________________________________________ CWG-Stewardship mailing list CWG-Stewardship@icann.org <mailto:CWG-Stewardship@icann.org> https://mm.icann.org/mailman/listinfo/cwg-stewardship
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-- Jordan Carter
Chief Executive *InternetNZ*
04 495 2118 (office) | +64 21 442 649 (mob) jordan@internetnz.net.nz <mailto:jordan@internetnz.net.nz> Skype: jordancarter
/A better world through a better Internet /
_______________________________________________ CWG-Stewardship mailing list CWG-Stewardship@icann.org https://mm.icann.org/mailman/listinfo/cwg-stewardship
-- Matthew Shears Global Internet Policy and Human Rights Center for Democracy & Technology (CDT) + 44 (0)771 247 2987
I do not have any problem with retaining the statements as long we add 'counsel advises'. But I still believe that that we should say that we cannot truly know the significance of the cost impacts until we have further financial analysis of the legal separation model and I definitely think that we should request the ICANN Finance Team to start that analysis now. It will probably take them several weeks to do it and the process will involve interaction with the CWG so that they understand the model sufficiently to do the analysis. Please understand that I am not suggesting that the publication of the proposal for public comment be delayed. The first analysis can be done in parallel with the public comment period. But if we wait to initiate the analysis until after the public comment period, it will likely not be completed when we submit a proposal to the SOs/ACs for approval. Finally, let me also point out that the first such analysis will not be the last. As the proposal continues to be refined, the analysis will also need to be refined. But I think we will need more objective information about estimated cost impacts than just counsel advice and that the Finance Team will be able to help us in that regard. Chuck From: cwg-stewardship-bounces@icann.org [mailto:cwg-stewardship-bounces@icann.org] On Behalf Of Matthew Shears Sent: Monday, April 20, 2015 3:29 AM To: Jordan Carter; Greg Shatan Cc: cwg-stewardship@icann.org Subject: Re: [CWG-Stewardship] [client com] Draft: Summary of Legal Structure for CWG Proposal I agree with Jordan and Greg - these statements should be retained (or if necessary modified with the addition "counsel advises"). On 4/20/2015 6:21 AM, Jordan Carter wrote: +1 to Greg. Jordan On 20 April 2015 at 16:05, Greg Shatan <gregshatanipc@gmail.com<mailto:gregshatanipc@gmail.com>> wrote: Respectfully, I disagree with Eduardo and Chuck on the following issue: 2] Items (a) & (c) in section "The weaknesses of the proposed structure are as follows." (page 3): "(a) Requires forming a new entity and on an ongoing basis attending to a set of associated corporate formalities, although those can be fairly minimal;" " (c) May have some negative impact on operational efficiency due to the functional separation, and the separate legal status will introduce some additional costs, although those should not be significant." I suggest to delete the two statements pointed here by an underline/italics. Both statements are seemly subjectives and tend to steer the reader to think that this will be easy to implement and that it will not be costly. There has not been any deep analysis done on these to support either statement. As a general point, we have asked counsel to provide us not only with their technical expertise, but also with the benefit of their practical experience. Here they are telling us two things based on their experience: -- corporate formalities "can be fairly minimal." -- additional costs introduced by operating PTI with a separate legal status "should not be significant." Our counsels' practical experience certainly includes forming corporate entities and attending to corporate formalities (sometimes called "corporate housekeeping") -- I'd daresay among our counsel they have done and continue to do this for hundreds (if not thousands) of corporations. From my own experience and knowledge, corporate formation and corporate housekeeping are essentially ministerial tasks, and are neither particularly complex or time-consuming (though it requires some familiarity and experience to do these tasks). It's really a fairly objective and entirely reasonable statement for someone with the requisite knowledge to say that these "can be fairly minimal." Indeed, I can't think of a scenario where attending to corporate formalities would not be fairly minimal. Similarly, I'm fairly sure counsel have dealt many times with the costs associated with having business units in wholly-owned or controlled subsidiaries rather than divisions, and they are aware of what those costs are. Again this seems like a reasonable statement and one that I'm sure is made objectively. From my experience, the costs that are a direct result of running a business as a subsidiary, as opposed to as a business unit within the same entity, are not significant. In sum, I believe these are both reasonable and very unsurprising statements. I know that it is not the intent, but I think that giving the impression that the opposite (corporate formalities are not fairly minimal; costs resulting from operating a business as a subsidiary (vs. as a business unit) are significant) could be true creates FUD where there should be none. Therefore, I think it would be appropriate to accept this advice. If we don't want to accept counsel's advice, I don't think the appropriate response is to delete it. Rather, I think the appropriate action would be to ask counsel to explain the basis of the statements. Alternatively, we could insert "counsel advises" after "although" in each statement. Let me say that I don't believe we need to do either of these things. But, if the group is not willing to accept these and move on, these are the courses of action that should be considered. Greg On Sun, Apr 19, 2015 at 11:51 AM, Gomes, Chuck <cgomes@verisign.com<mailto:cgomes@verisign.com>> wrote: I think that Eduardo is probably right that we really don't know whether the increased cost for the legal separation will be significant or not without a detailed analysis by the Finance Team. Now that we are specifically leaning toward the legal separation approach, I suggest that we request an analysis by the Finance Team right away. It will take them awhile to do it and they will probably have some questions for us but the sooner we get that started the better. Xavier understands that a lot of the shared IANA costs can still be shared so that will minimize the increase but there will still be increases. As far as the language in (c) below, I suggest we say something along these lines instead saying 'although those should not be significant': "The significance of the increased costs cannot be determined until a detailed analysis is done by the ICANN Finance Team, but the CWG has requested that analysis and expects to have at least preliminary results before the public comment period ends." Chuck From: cwg-stewardship-bounces@icann.org<mailto:cwg-stewardship-bounces@icann.org> [mailto:cwg-stewardship-bounces@icann.org<mailto:cwg-stewardship-bounces@icann.org>] On Behalf Of Eduardo Diaz Sent: Saturday, April 18, 2015 4:43 PM To: cwg-stewardship@icann.org<mailto:cwg-stewardship@icann.org> Subject: Re: [CWG-Stewardship] [client com] Draft: Summary of Legal Structure for CWG Proposal My comments about the S-A document 20179247_3 on legal structure: 1] It is not clear who is going to decide about the concepts of designator vs. members (2nd para, page3). Is this an item for the CCWG to resolve? 2] Items (a) & (c) in section "The weaknesses of the proposed structure are as follows." (page 3): "(a) Requires forming a new entity and on an ongoing basis attending to a set of associated corporate formalities, although those can be fairly minimal;" " (c) May have some negative impact on operational efficiency due to the functional separation, and the separate legal status will introduce some additional costs, although those should not be significant." I suggest to delete the two statements pointed here by an underline/italics. Both statements are seemly subjectives and tend to steer the reader to think that this will be easy to implement and that it will not be costly. There has not been any deep analysis done on these to support either statement. -ed On Sat, Apr 18, 2015 at 1:49 PM, Client Committee List for CWG <cwg-client@icann.org<mailto:cwg-client@icann.org>> wrote: Dear All, Attached is a summary of the current legal structure under consideration by the CWG. This also includes the CCWG dependencies. Please let us know if you have any comments or would like to discuss. Best regards, Sharon SHARON FLANAGAN Partner Sidley Austin LLP +1.415.772.1271<tel:%2B1.415.772.1271> sflanagan@sidley.com<mailto:sflanagan@sidley.com> **************************************************************************************************** This e-mail is sent by a law firm and may contain information that is privileged or confidential. If you are not the intended recipient, please delete the e-mail and any attachments and notify us immediately. **************************************************************************************************** _______________________________________________ Cwg-client mailing list Cwg-client@icann.org<mailto:Cwg-client@icann.org> https://mm.icann.org/mailman/listinfo/cwg-client -- NOTICE: This email may contain information which is confidential and/or subject to legal privilege, and is intended for the use of the named addressee only. If you are not the intended recipient, you must not use, disclose or copy any part of this email. If you have received this email by mistake, please notify the sender and delete this message immediately. _______________________________________________ CWG-Stewardship mailing list CWG-Stewardship@icann.org<mailto:CWG-Stewardship@icann.org> https://mm.icann.org/mailman/listinfo/cwg-stewardship _______________________________________________ CWG-Stewardship mailing list CWG-Stewardship@icann.org<mailto:CWG-Stewardship@icann.org> https://mm.icann.org/mailman/listinfo/cwg-stewardship -- Jordan Carter Chief Executive InternetNZ 04 495 2118 (office) | +64 21 442 649 (mob) jordan@internetnz.net.nz<mailto:jordan@internetnz.net.nz> Skype: jordancarter A better world through a better Internet _______________________________________________ CWG-Stewardship mailing list CWG-Stewardship@icann.org<mailto:CWG-Stewardship@icann.org> https://mm.icann.org/mailman/listinfo/cwg-stewardship -- Matthew Shears Global Internet Policy and Human Rights Center for Democracy & Technology (CDT) + 44 (0)771 247 2987
Chuck Keep this in perspective. The entire IANA cost is about 3.96% of ICANN's total budget. This is not the AT&T divestiture. --MM From: cwg-stewardship-bounces@icann.org [mailto:cwg-stewardship-bounces@icann.org] On Behalf Of Gomes, Chuck Sent: Monday, April 20, 2015 9:25 AM To: Matthew Shears; Jordan Carter; Greg Shatan Cc: cwg-stewardship@icann.org Subject: Re: [CWG-Stewardship] [client com] Draft: Summary of Legal Structure for CWG Proposal I do not have any problem with retaining the statements as long we add 'counsel advises'. But I still believe that that we should say that we cannot truly know the significance of the cost impacts until we have further financial analysis of the legal separation model and I definitely think that we should request the ICANN Finance Team to start that analysis now. It will probably take them several weeks to do it and the process will involve interaction with the CWG so that they understand the model sufficiently to do the analysis. Please understand that I am not suggesting that the publication of the proposal for public comment be delayed. The first analysis can be done in parallel with the public comment period. But if we wait to initiate the analysis until after the public comment period, it will likely not be completed when we submit a proposal to the SOs/ACs for approval. Finally, let me also point out that the first such analysis will not be the last. As the proposal continues to be refined, the analysis will also need to be refined. But I think we will need more objective information about estimated cost impacts than just counsel advice and that the Finance Team will be able to help us in that regard. Chuck From: cwg-stewardship-bounces@icann.org<mailto:cwg-stewardship-bounces@icann.org> [mailto:cwg-stewardship-bounces@icann.org] On Behalf Of Matthew Shears Sent: Monday, April 20, 2015 3:29 AM To: Jordan Carter; Greg Shatan Cc: cwg-stewardship@icann.org<mailto:cwg-stewardship@icann.org> Subject: Re: [CWG-Stewardship] [client com] Draft: Summary of Legal Structure for CWG Proposal I agree with Jordan and Greg - these statements should be retained (or if necessary modified with the addition "counsel advises"). On 4/20/2015 6:21 AM, Jordan Carter wrote: +1 to Greg. Jordan On 20 April 2015 at 16:05, Greg Shatan <gregshatanipc@gmail.com<mailto:gregshatanipc@gmail.com>> wrote: Respectfully, I disagree with Eduardo and Chuck on the following issue: 2] Items (a) & (c) in section "The weaknesses of the proposed structure are as follows." (page 3): "(a) Requires forming a new entity and on an ongoing basis attending to a set of associated corporate formalities, although those can be fairly minimal;" " (c) May have some negative impact on operational efficiency due to the functional separation, and the separate legal status will introduce some additional costs, although those should not be significant." I suggest to delete the two statements pointed here by an underline/italics. Both statements are seemly subjectives and tend to steer the reader to think that this will be easy to implement and that it will not be costly. There has not been any deep analysis done on these to support either statement. As a general point, we have asked counsel to provide us not only with their technical expertise, but also with the benefit of their practical experience. Here they are telling us two things based on their experience: -- corporate formalities "can be fairly minimal." -- additional costs introduced by operating PTI with a separate legal status "should not be significant." Our counsels' practical experience certainly includes forming corporate entities and attending to corporate formalities (sometimes called "corporate housekeeping") -- I'd daresay among our counsel they have done and continue to do this for hundreds (if not thousands) of corporations. From my own experience and knowledge, corporate formation and corporate housekeeping are essentially ministerial tasks, and are neither particularly complex or time-consuming (though it requires some familiarity and experience to do these tasks). It's really a fairly objective and entirely reasonable statement for someone with the requisite knowledge to say that these "can be fairly minimal." Indeed, I can't think of a scenario where attending to corporate formalities would not be fairly minimal. Similarly, I'm fairly sure counsel have dealt many times with the costs associated with having business units in wholly-owned or controlled subsidiaries rather than divisions, and they are aware of what those costs are. Again this seems like a reasonable statement and one that I'm sure is made objectively. From my experience, the costs that are a direct result of running a business as a subsidiary, as opposed to as a business unit within the same entity, are not significant. In sum, I believe these are both reasonable and very unsurprising statements. I know that it is not the intent, but I think that giving the impression that the opposite (corporate formalities are not fairly minimal; costs resulting from operating a business as a subsidiary (vs. as a business unit) are significant) could be true creates FUD where there should be none. Therefore, I think it would be appropriate to accept this advice. If we don't want to accept counsel's advice, I don't think the appropriate response is to delete it. Rather, I think the appropriate action would be to ask counsel to explain the basis of the statements. Alternatively, we could insert "counsel advises" after "although" in each statement. Let me say that I don't believe we need to do either of these things. But, if the group is not willing to accept these and move on, these are the courses of action that should be considered. Greg On Sun, Apr 19, 2015 at 11:51 AM, Gomes, Chuck <cgomes@verisign.com<mailto:cgomes@verisign.com>> wrote: I think that Eduardo is probably right that we really don't know whether the increased cost for the legal separation will be significant or not without a detailed analysis by the Finance Team. Now that we are specifically leaning toward the legal separation approach, I suggest that we request an analysis by the Finance Team right away. It will take them awhile to do it and they will probably have some questions for us but the sooner we get that started the better. Xavier understands that a lot of the shared IANA costs can still be shared so that will minimize the increase but there will still be increases. As far as the language in (c) below, I suggest we say something along these lines instead saying 'although those should not be significant': "The significance of the increased costs cannot be determined until a detailed analysis is done by the ICANN Finance Team, but the CWG has requested that analysis and expects to have at least preliminary results before the public comment period ends." Chuck From: cwg-stewardship-bounces@icann.org<mailto:cwg-stewardship-bounces@icann.org> [mailto:cwg-stewardship-bounces@icann.org<mailto:cwg-stewardship-bounces@icann.org>] On Behalf Of Eduardo Diaz Sent: Saturday, April 18, 2015 4:43 PM To: cwg-stewardship@icann.org<mailto:cwg-stewardship@icann.org> Subject: Re: [CWG-Stewardship] [client com] Draft: Summary of Legal Structure for CWG Proposal My comments about the S-A document 20179247_3 on legal structure: 1] It is not clear who is going to decide about the concepts of designator vs. members (2nd para, page3). Is this an item for the CCWG to resolve? 2] Items (a) & (c) in section "The weaknesses of the proposed structure are as follows." (page 3): "(a) Requires forming a new entity and on an ongoing basis attending to a set of associated corporate formalities, although those can be fairly minimal;" " (c) May have some negative impact on operational efficiency due to the functional separation, and the separate legal status will introduce some additional costs, although those should not be significant." I suggest to delete the two statements pointed here by an underline/italics. Both statements are seemly subjectives and tend to steer the reader to think that this will be easy to implement and that it will not be costly. There has not been any deep analysis done on these to support either statement. -ed On Sat, Apr 18, 2015 at 1:49 PM, Client Committee List for CWG <cwg-client@icann.org<mailto:cwg-client@icann.org>> wrote: Dear All, Attached is a summary of the current legal structure under consideration by the CWG. This also includes the CCWG dependencies. Please let us know if you have any comments or would like to discuss. Best regards, Sharon SHARON FLANAGAN Partner Sidley Austin LLP +1.415.772.1271<tel:%2B1.415.772.1271> sflanagan@sidley.com<mailto:sflanagan@sidley.com> **************************************************************************************************** This e-mail is sent by a law firm and may contain information that is privileged or confidential. If you are not the intended recipient, please delete the e-mail and any attachments and notify us immediately. **************************************************************************************************** _______________________________________________ Cwg-client mailing list Cwg-client@icann.org<mailto:Cwg-client@icann.org> https://mm.icann.org/mailman/listinfo/cwg-client -- NOTICE: This email may contain information which is confidential and/or subject to legal privilege, and is intended for the use of the named addressee only. If you are not the intended recipient, you must not use, disclose or copy any part of this email. If you have received this email by mistake, please notify the sender and delete this message immediately. _______________________________________________ CWG-Stewardship mailing list CWG-Stewardship@icann.org<mailto:CWG-Stewardship@icann.org> https://mm.icann.org/mailman/listinfo/cwg-stewardship _______________________________________________ CWG-Stewardship mailing list CWG-Stewardship@icann.org<mailto:CWG-Stewardship@icann.org> https://mm.icann.org/mailman/listinfo/cwg-stewardship -- Jordan Carter Chief Executive InternetNZ 04 495 2118 (office) | +64 21 442 649 (mob) jordan@internetnz.net.nz<mailto:jordan@internetnz.net.nz> Skype: jordancarter A better world through a better Internet _______________________________________________ CWG-Stewardship mailing list CWG-Stewardship@icann.org<mailto:CWG-Stewardship@icann.org> https://mm.icann.org/mailman/listinfo/cwg-stewardship -- Matthew Shears Global Internet Policy and Human Rights Center for Democracy & Technology (CDT) + 44 (0)771 247 2987
Understand Milton. I don't see the costs as an issue that would be an argument against the legal separation approach but rather a matter of due diligence on our part to help us refine our proposal as we move forward. Also, we need to make sure that the FY16 budget adequately provides for funding of the transition. Chuck From: Milton L Mueller [mailto:mueller@syr.edu] Sent: Monday, April 20, 2015 10:12 AM To: Gomes, Chuck Cc: 'cwg-stewardship@icann.org' Subject: RE: [CWG-Stewardship] [client com] Draft: Summary of Legal Structure for CWG Proposal Chuck Keep this in perspective. The entire IANA cost is about 3.96% of ICANN's total budget. This is not the AT&T divestiture. --MM From: cwg-stewardship-bounces@icann.org<mailto:cwg-stewardship-bounces@icann.org> [mailto:cwg-stewardship-bounces@icann.org] On Behalf Of Gomes, Chuck Sent: Monday, April 20, 2015 9:25 AM To: Matthew Shears; Jordan Carter; Greg Shatan Cc: cwg-stewardship@icann.org<mailto:cwg-stewardship@icann.org> Subject: Re: [CWG-Stewardship] [client com] Draft: Summary of Legal Structure for CWG Proposal I do not have any problem with retaining the statements as long we add 'counsel advises'. But I still believe that that we should say that we cannot truly know the significance of the cost impacts until we have further financial analysis of the legal separation model and I definitely think that we should request the ICANN Finance Team to start that analysis now. It will probably take them several weeks to do it and the process will involve interaction with the CWG so that they understand the model sufficiently to do the analysis. Please understand that I am not suggesting that the publication of the proposal for public comment be delayed. The first analysis can be done in parallel with the public comment period. But if we wait to initiate the analysis until after the public comment period, it will likely not be completed when we submit a proposal to the SOs/ACs for approval. Finally, let me also point out that the first such analysis will not be the last. As the proposal continues to be refined, the analysis will also need to be refined. But I think we will need more objective information about estimated cost impacts than just counsel advice and that the Finance Team will be able to help us in that regard. Chuck From: cwg-stewardship-bounces@icann.org<mailto:cwg-stewardship-bounces@icann.org> [mailto:cwg-stewardship-bounces@icann.org] On Behalf Of Matthew Shears Sent: Monday, April 20, 2015 3:29 AM To: Jordan Carter; Greg Shatan Cc: cwg-stewardship@icann.org<mailto:cwg-stewardship@icann.org> Subject: Re: [CWG-Stewardship] [client com] Draft: Summary of Legal Structure for CWG Proposal I agree with Jordan and Greg - these statements should be retained (or if necessary modified with the addition "counsel advises"). On 4/20/2015 6:21 AM, Jordan Carter wrote: +1 to Greg. Jordan On 20 April 2015 at 16:05, Greg Shatan <gregshatanipc@gmail.com<mailto:gregshatanipc@gmail.com>> wrote: Respectfully, I disagree with Eduardo and Chuck on the following issue: 2] Items (a) & (c) in section "The weaknesses of the proposed structure are as follows." (page 3): "(a) Requires forming a new entity and on an ongoing basis attending to a set of associated corporate formalities, although those can be fairly minimal;" " (c) May have some negative impact on operational efficiency due to the functional separation, and the separate legal status will introduce some additional costs, although those should not be significant." I suggest to delete the two statements pointed here by an underline/italics. Both statements are seemly subjectives and tend to steer the reader to think that this will be easy to implement and that it will not be costly. There has not been any deep analysis done on these to support either statement. As a general point, we have asked counsel to provide us not only with their technical expertise, but also with the benefit of their practical experience. Here they are telling us two things based on their experience: -- corporate formalities "can be fairly minimal." -- additional costs introduced by operating PTI with a separate legal status "should not be significant." Our counsels' practical experience certainly includes forming corporate entities and attending to corporate formalities (sometimes called "corporate housekeeping") -- I'd daresay among our counsel they have done and continue to do this for hundreds (if not thousands) of corporations. From my own experience and knowledge, corporate formation and corporate housekeeping are essentially ministerial tasks, and are neither particularly complex or time-consuming (though it requires some familiarity and experience to do these tasks). It's really a fairly objective and entirely reasonable statement for someone with the requisite knowledge to say that these "can be fairly minimal." Indeed, I can't think of a scenario where attending to corporate formalities would not be fairly minimal. Similarly, I'm fairly sure counsel have dealt many times with the costs associated with having business units in wholly-owned or controlled subsidiaries rather than divisions, and they are aware of what those costs are. Again this seems like a reasonable statement and one that I'm sure is made objectively. From my experience, the costs that are a direct result of running a business as a subsidiary, as opposed to as a business unit within the same entity, are not significant. In sum, I believe these are both reasonable and very unsurprising statements. I know that it is not the intent, but I think that giving the impression that the opposite (corporate formalities are not fairly minimal; costs resulting from operating a business as a subsidiary (vs. as a business unit) are significant) could be true creates FUD where there should be none. Therefore, I think it would be appropriate to accept this advice. If we don't want to accept counsel's advice, I don't think the appropriate response is to delete it. Rather, I think the appropriate action would be to ask counsel to explain the basis of the statements. Alternatively, we could insert "counsel advises" after "although" in each statement. Let me say that I don't believe we need to do either of these things. But, if the group is not willing to accept these and move on, these are the courses of action that should be considered. Greg On Sun, Apr 19, 2015 at 11:51 AM, Gomes, Chuck <cgomes@verisign.com<mailto:cgomes@verisign.com>> wrote: I think that Eduardo is probably right that we really don't know whether the increased cost for the legal separation will be significant or not without a detailed analysis by the Finance Team. Now that we are specifically leaning toward the legal separation approach, I suggest that we request an analysis by the Finance Team right away. It will take them awhile to do it and they will probably have some questions for us but the sooner we get that started the better. Xavier understands that a lot of the shared IANA costs can still be shared so that will minimize the increase but there will still be increases. As far as the language in (c) below, I suggest we say something along these lines instead saying 'although those should not be significant': "The significance of the increased costs cannot be determined until a detailed analysis is done by the ICANN Finance Team, but the CWG has requested that analysis and expects to have at least preliminary results before the public comment period ends." Chuck From: cwg-stewardship-bounces@icann.org<mailto:cwg-stewardship-bounces@icann.org> [mailto:cwg-stewardship-bounces@icann.org<mailto:cwg-stewardship-bounces@icann.org>] On Behalf Of Eduardo Diaz Sent: Saturday, April 18, 2015 4:43 PM To: cwg-stewardship@icann.org<mailto:cwg-stewardship@icann.org> Subject: Re: [CWG-Stewardship] [client com] Draft: Summary of Legal Structure for CWG Proposal My comments about the S-A document 20179247_3 on legal structure: 1] It is not clear who is going to decide about the concepts of designator vs. members (2nd para, page3). Is this an item for the CCWG to resolve? 2] Items (a) & (c) in section "The weaknesses of the proposed structure are as follows." (page 3): "(a) Requires forming a new entity and on an ongoing basis attending to a set of associated corporate formalities, although those can be fairly minimal;" " (c) May have some negative impact on operational efficiency due to the functional separation, and the separate legal status will introduce some additional costs, although those should not be significant." I suggest to delete the two statements pointed here by an underline/italics. Both statements are seemly subjectives and tend to steer the reader to think that this will be easy to implement and that it will not be costly. There has not been any deep analysis done on these to support either statement. -ed On Sat, Apr 18, 2015 at 1:49 PM, Client Committee List for CWG <cwg-client@icann.org<mailto:cwg-client@icann.org>> wrote: Dear All, Attached is a summary of the current legal structure under consideration by the CWG. This also includes the CCWG dependencies. Please let us know if you have any comments or would like to discuss. Best regards, Sharon SHARON FLANAGAN Partner Sidley Austin LLP +1.415.772.1271<tel:%2B1.415.772.1271> sflanagan@sidley.com<mailto:sflanagan@sidley.com> **************************************************************************************************** This e-mail is sent by a law firm and may contain information that is privileged or confidential. If you are not the intended recipient, please delete the e-mail and any attachments and notify us immediately. **************************************************************************************************** _______________________________________________ Cwg-client mailing list Cwg-client@icann.org<mailto:Cwg-client@icann.org> https://mm.icann.org/mailman/listinfo/cwg-client -- NOTICE: This email may contain information which is confidential and/or subject to legal privilege, and is intended for the use of the named addressee only. If you are not the intended recipient, you must not use, disclose or copy any part of this email. If you have received this email by mistake, please notify the sender and delete this message immediately. _______________________________________________ CWG-Stewardship mailing list CWG-Stewardship@icann.org<mailto:CWG-Stewardship@icann.org> https://mm.icann.org/mailman/listinfo/cwg-stewardship _______________________________________________ CWG-Stewardship mailing list CWG-Stewardship@icann.org<mailto:CWG-Stewardship@icann.org> https://mm.icann.org/mailman/listinfo/cwg-stewardship -- Jordan Carter Chief Executive InternetNZ 04 495 2118 (office) | +64 21 442 649 (mob) jordan@internetnz.net.nz<mailto:jordan@internetnz.net.nz> Skype: jordancarter A better world through a better Internet _______________________________________________ CWG-Stewardship mailing list CWG-Stewardship@icann.org<mailto:CWG-Stewardship@icann.org> https://mm.icann.org/mailman/listinfo/cwg-stewardship -- Matthew Shears Global Internet Policy and Human Rights Center for Democracy & Technology (CDT) + 44 (0)771 247 2987
Greg: I am not suggesting that we do not accept counsel's advice but to adjust what I consider subjective statements. *"fairly minimal *and* not be significant"* need to be defined to make them objective. Based on my business experience also cost is always impredecible especially when you do not have all the details. -ed On Mon, Apr 20, 2015 at 12:05 AM, Greg Shatan <gregshatanipc@gmail.com> wrote:
Respectfully, I disagree with Eduardo and Chuck on the following issue:
2] Items (a) & (c) in section "The weaknesses of the proposed structure are as follows." (page 3):
*"(a) Requires forming a new entity and on an ongoing basis attending to a set of associated corporate formalities, although those can be fairly minimal;"*
" (c) May have some negative impact on operational efficiency due to the *functional separation, and the separate legal status will introduce some **additional costs, although those should not be significant." *
I suggest to delete the two statements pointed here by an underline/italics. Both statements are seemly subjectives and tend to steer the reader to think that this will be easy to implement and that it will not be costly. There has not been any deep analysis done on these to support either statement.
As a general point, we have asked counsel to provide us not only with their technical expertise, but also with the benefit of their practical experience. Here they are telling us two things based on their experience:
-- corporate formalities "can be fairly minimal." -- additional costs introduced by operating PTI with a separate legal status "should not be significant."
Our counsels' practical experience certainly includes forming corporate entities and attending to corporate formalities (sometimes called "corporate housekeeping") -- I'd daresay among our counsel they have done and continue to do this for hundreds (if not thousands) of corporations. From my own experience and knowledge, corporate formation and corporate housekeeping are essentially ministerial tasks, and are neither particularly complex or time-consuming (though it requires some familiarity and experience to do these tasks). It's really a fairly objective and entirely reasonable statement for someone with the requisite knowledge to say that these "can be fairly minimal." Indeed, I can't think of a scenario where attending to corporate formalities would not be fairly minimal.
Similarly, I'm fairly sure counsel have dealt many times with the costs associated with having business units in wholly-owned or controlled subsidiaries rather than divisions, and they are aware of what those costs are. Again this seems like a reasonable statement and one that I'm sure is made objectively. From my experience, the costs that are a direct result of running a business as a subsidiary, as opposed to as a business unit within the same entity, are not significant.
In sum, I believe these are both reasonable and very unsurprising statements. I know that it is not the intent, but I think that giving the impression that the opposite (corporate formalities are not fairly minimal; costs resulting from operating a business as a subsidiary (vs. as a business unit) are significant) could be true creates FUD where there should be none. Therefore, I think it would be appropriate to accept this advice.
If we don't want to accept counsel's advice, I don't think the appropriate response is to delete it. Rather, I think the appropriate action would be to ask counsel to explain the basis of the statements. Alternatively, we could insert "counsel advises" after "although" in each statement. Let me say that I don't believe we need to do either of these things. But, if the group is not willing to accept these and move on, these are the courses of action that should be considered.
Greg
On Sun, Apr 19, 2015 at 11:51 AM, Gomes, Chuck <cgomes@verisign.com> wrote:
I think that Eduardo is probably right that we really don’t know whether the increased cost for the legal separation will be significant or not without a detailed analysis by the Finance Team. Now that we are specifically leaning toward the legal separation approach, I suggest that we request an analysis by the Finance Team right away. It will take them awhile to do it and they will probably have some questions for us but the sooner we get that started the better. Xavier understands that a lot of the shared IANA costs can still be shared so that will minimize the increase but there will still be increases. As far as the language in © below, I suggest we say something along these lines instead saying ‘*although those should not be significant*’: “The significance of the increased costs cannot be determined until a detailed analysis is done by the ICANN Finance Team, but the CWG has requested that analysis and expects to have at least preliminary results before the public comment period ends.”
Chuck
*From:* cwg-stewardship-bounces@icann.org [mailto: cwg-stewardship-bounces@icann.org] *On Behalf Of *Eduardo Diaz *Sent:* Saturday, April 18, 2015 4:43 PM *To:* cwg-stewardship@icann.org *Subject:* Re: [CWG-Stewardship] [client com] Draft: Summary of Legal Structure for CWG Proposal
My comments about the S-A document 20179247_3 on legal structure:
1] It is not clear who is going to decide about the concepts of designator vs. members (2nd para, page3). Is this an item for the CCWG to resolve?
2] Items (a) & (c) in section "The weaknesses of the proposed structure are as follows." (page 3):
*"(a) Requires forming a new entity and on an ongoing basis attending to a set of associated corporate formalities, although those can be fairly minimal;"*
*" (c) May have some negative impact on operational efficiency due to the *
*functional separation, and the separate legal status will introduce some *
*additional costs, although those should not be significant." *
I suggest to delete the two statements pointed here by an underline/italics. Both statements are seemly subjectives and tend to steer the reader
to think that this will be easy to implement and that it will not be costly. There has not been any deep analysis done on these to support either statement.
-ed
On Sat, Apr 18, 2015 at 1:49 PM, Client Committee List for CWG < cwg-client@icann.org> wrote:
Dear All,
Attached is a summary of the current legal structure under consideration by the CWG. This also includes the CCWG dependencies.
Please let us know if you have any comments or would like to discuss.
Best regards,
Sharon
*SHARON* *FLANAGAN* Partner
*Sidley Austin LLP* +1.415.772.1271 sflanagan@sidley.com
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_______________________________________________ CWG-Stewardship mailing list CWG-Stewardship@icann.org https://mm.icann.org/mailman/listinfo/cwg-stewardship
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Hello Eduardo: Can you identify any objective reasons why we should be extremely concerned about the potential costs associated with separating out a department that consists of only 7 people (even less, if it’s only the “names-related part) with no heavy, specialized capital equipment? How would the cost of these legal formalities and minor asset reshufflings compare to the cost of sending ICANN’s CEO and assistants to the World Economic Forum for a week? How would it compare to the costs of running 42 conference calls for the CWG over the course of 8 months, with 3-5 staff members present on each call? Within those parameters, I would suggest that the term “not that significant” or “fairly minimal” is not so subjective or arbitrary. I am not arguing against Chuck’s suggestion that ICANN accounting develop an estimate (and it will be an estimate, not a measurement). More information can be useful. But we do have objective knowledge of the size of the IANA functions operation and in the greater scheme of things I think these costs are going to look pretty darn small once those estimates are developed. Let’s also not forget the potential security advantages of separating IANA functions infrastructure from routine, unrelated ICANN stuff. There could be significant reductions of risk, and thus cost, there. --MM From: cwg-stewardship-bounces@icann.org [mailto:cwg-stewardship-bounces@icann.org] On Behalf Of Eduardo Diaz I am not suggesting that we do not accept counsel's advice but to adjust what I consider subjective statements. "fairly minimal and not be significant" need to be defined to make them objective. Based on my business experience also cost is always impredecible especially when you do not have all the details. -ed
Milton: I am not implying that we should or not be concerned about the potential costs associated with separating out the department. I am saying that the statements are subjective. *F**airly minima*l and *not be significant *are not really defined. For example, *fairly minimal* for some may be nothing and *not be significant* (in relation to cost) for others might mean 1% of ICANN's total budget. Who knows? Thanks for the suggestion proposed in your comparison example. That is exactly what we need: real data that will support the f*airly minima*l and *not be significant *statements. -ed On Mon, Apr 20, 2015 at 10:38 AM, Milton L Mueller <mueller@syr.edu> wrote:
Hello Eduardo:
Can you identify any objective reasons why we should be extremely concerned about the potential costs associated with separating out a department that consists of only 7 people (even less, if it’s only the “names-related part) with no heavy, specialized capital equipment?
How would the cost of these legal formalities and minor asset reshufflings compare to the cost of sending ICANN’s CEO and assistants to the World Economic Forum for a week? How would it compare to the costs of running 42 conference calls for the CWG over the course of 8 months, with 3-5 staff members present on each call? Within those parameters, I would suggest that the term “not that significant” or “fairly minimal” is not so subjective or arbitrary.
I am not arguing against Chuck’s suggestion that ICANN accounting develop an estimate (and it will be an estimate, not a measurement). More information can be useful. But we do have objective knowledge of the size of the IANA functions operation and in the greater scheme of things I think these costs are going to look pretty darn small once those estimates are developed.
Let’s also not forget the potential security advantages of separating IANA functions infrastructure from routine, unrelated ICANN stuff. There could be significant reductions of risk, and thus cost, there.
--MM
*From:* cwg-stewardship-bounces@icann.org [mailto: cwg-stewardship-bounces@icann.org] *On Behalf Of *Eduardo Diaz
I am not suggesting that we do not accept counsel's advice but to adjust what I consider subjective statements. *"fairly minimal *and* not be significant"* need to be defined to make them objective. Based on my business experience also cost is always impredecible especially when you do not have all the details.
-ed
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I will bring this request back to Sidley Austin for clarification. Greg On Mon, Apr 20, 2015 at 11:41 AM, Eduardo Diaz <eduardodiazrivera@gmail.com> wrote:
Milton:
I am not implying that we should or not be concerned about the potential costs associated with separating out the department. I am saying that the statements are subjective. *F**airly minima*l and *not be significant *are not really defined. For example, *fairly minimal* for some may be nothing and *not be significant* (in relation to cost) for others might mean 1% of ICANN's total budget. Who knows?
Thanks for the suggestion proposed in your comparison example. That is exactly what we need: real data that will support the f*airly minima*l and *not be significant *statements.
-ed
On Mon, Apr 20, 2015 at 10:38 AM, Milton L Mueller <mueller@syr.edu> wrote:
Hello Eduardo:
Can you identify any objective reasons why we should be extremely concerned about the potential costs associated with separating out a department that consists of only 7 people (even less, if it’s only the “names-related part) with no heavy, specialized capital equipment?
How would the cost of these legal formalities and minor asset reshufflings compare to the cost of sending ICANN’s CEO and assistants to the World Economic Forum for a week? How would it compare to the costs of running 42 conference calls for the CWG over the course of 8 months, with 3-5 staff members present on each call? Within those parameters, I would suggest that the term “not that significant” or “fairly minimal” is not so subjective or arbitrary.
I am not arguing against Chuck’s suggestion that ICANN accounting develop an estimate (and it will be an estimate, not a measurement). More information can be useful. But we do have objective knowledge of the size of the IANA functions operation and in the greater scheme of things I think these costs are going to look pretty darn small once those estimates are developed.
Let’s also not forget the potential security advantages of separating IANA functions infrastructure from routine, unrelated ICANN stuff. There could be significant reductions of risk, and thus cost, there.
--MM
*From:* cwg-stewardship-bounces@icann.org [mailto: cwg-stewardship-bounces@icann.org] *On Behalf Of *Eduardo Diaz
I am not suggesting that we do not accept counsel's advice but to adjust what I consider subjective statements. *"fairly minimal *and* not be significant"* need to be defined to make them objective. Based on my business experience also cost is always impredecible especially when you do not have all the details.
-ed
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Greg, Please understand that I am not suggesting that we do not accept Counsel’s advice but rather that we validate it. As you know, I do not have the expertise on subsidiaries/affiliates that Counsel and others have, but I do know that subsidiaries/affiliates can take many different forms. If nothing else, going through the exercise with ICANN Finance to analyze and scope out the cost impacts would help us refine the proposal details to further minimize cost impacts if needed or simply confirm Counsel’s advice in our specific situation. Chuck From: Greg Shatan [mailto:gregshatanipc@gmail.com] Sent: Monday, April 20, 2015 12:06 AM To: Gomes, Chuck Cc: Eduardo Diaz; cwg-stewardship@icann.org Subject: Re: [CWG-Stewardship] [client com] Draft: Summary of Legal Structure for CWG Proposal Respectfully, I disagree with Eduardo and Chuck on the following issue: 2] Items (a) & (c) in section "The weaknesses of the proposed structure are as follows." (page 3): "(a) Requires forming a new entity and on an ongoing basis attending to a set of associated corporate formalities, although those can be fairly minimal;" " (c) May have some negative impact on operational efficiency due to the functional separation, and the separate legal status will introduce some additional costs, although those should not be significant." I suggest to delete the two statements pointed here by an underline/italics. Both statements are seemly subjectives and tend to steer the reader to think that this will be easy to implement and that it will not be costly. There has not been any deep analysis done on these to support either statement. As a general point, we have asked counsel to provide us not only with their technical expertise, but also with the benefit of their practical experience. Here they are telling us two things based on their experience: -- corporate formalities "can be fairly minimal." -- additional costs introduced by operating PTI with a separate legal status "should not be significant." Our counsels' practical experience certainly includes forming corporate entities and attending to corporate formalities (sometimes called "corporate housekeeping") -- I'd daresay among our counsel they have done and continue to do this for hundreds (if not thousands) of corporations. From my own experience and knowledge, corporate formation and corporate housekeeping are essentially ministerial tasks, and are neither particularly complex or time-consuming (though it requires some familiarity and experience to do these tasks). It's really a fairly objective and entirely reasonable statement for someone with the requisite knowledge to say that these "can be fairly minimal." Indeed, I can't think of a scenario where attending to corporate formalities would not be fairly minimal. Similarly, I'm fairly sure counsel have dealt many times with the costs associated with having business units in wholly-owned or controlled subsidiaries rather than divisions, and they are aware of what those costs are. Again this seems like a reasonable statement and one that I'm sure is made objectively. From my experience, the costs that are a direct result of running a business as a subsidiary, as opposed to as a business unit within the same entity, are not significant. In sum, I believe these are both reasonable and very unsurprising statements. I know that it is not the intent, but I think that giving the impression that the opposite (corporate formalities are not fairly minimal; costs resulting from operating a business as a subsidiary (vs. as a business unit) are significant) could be true creates FUD where there should be none. Therefore, I think it would be appropriate to accept this advice. If we don't want to accept counsel's advice, I don't think the appropriate response is to delete it. Rather, I think the appropriate action would be to ask counsel to explain the basis of the statements. Alternatively, we could insert "counsel advises" after "although" in each statement. Let me say that I don't believe we need to do either of these things. But, if the group is not willing to accept these and move on, these are the courses of action that should be considered. Greg On Sun, Apr 19, 2015 at 11:51 AM, Gomes, Chuck <cgomes@verisign.com<mailto:cgomes@verisign.com>> wrote: I think that Eduardo is probably right that we really don’t know whether the increased cost for the legal separation will be significant or not without a detailed analysis by the Finance Team. Now that we are specifically leaning toward the legal separation approach, I suggest that we request an analysis by the Finance Team right away. It will take them awhile to do it and they will probably have some questions for us but the sooner we get that started the better. Xavier understands that a lot of the shared IANA costs can still be shared so that will minimize the increase but there will still be increases. As far as the language in © below, I suggest we say something along these lines instead saying ‘although those should not be significant’: “The significance of the increased costs cannot be determined until a detailed analysis is done by the ICANN Finance Team, but the CWG has requested that analysis and expects to have at least preliminary results before the public comment period ends.” Chuck From: cwg-stewardship-bounces@icann.org<mailto:cwg-stewardship-bounces@icann.org> [mailto:cwg-stewardship-bounces@icann.org<mailto:cwg-stewardship-bounces@icann.org>] On Behalf Of Eduardo Diaz Sent: Saturday, April 18, 2015 4:43 PM To: cwg-stewardship@icann.org<mailto:cwg-stewardship@icann.org> Subject: Re: [CWG-Stewardship] [client com] Draft: Summary of Legal Structure for CWG Proposal My comments about the S-A document 20179247_3 on legal structure: 1] It is not clear who is going to decide about the concepts of designator vs. members (2nd para, page3). Is this an item for the CCWG to resolve? 2] Items (a) & (c) in section "The weaknesses of the proposed structure are as follows." (page 3): "(a) Requires forming a new entity and on an ongoing basis attending to a set of associated corporate formalities, although those can be fairly minimal;" " (c) May have some negative impact on operational efficiency due to the functional separation, and the separate legal status will introduce some additional costs, although those should not be significant." I suggest to delete the two statements pointed here by an underline/italics. Both statements are seemly subjectives and tend to steer the reader to think that this will be easy to implement and that it will not be costly. There has not been any deep analysis done on these to support either statement. -ed On Sat, Apr 18, 2015 at 1:49 PM, Client Committee List for CWG <cwg-client@icann.org<mailto:cwg-client@icann.org>> wrote: Dear All, Attached is a summary of the current legal structure under consideration by the CWG. This also includes the CCWG dependencies. Please let us know if you have any comments or would like to discuss. Best regards, Sharon SHARON FLANAGAN Partner Sidley Austin LLP +1.415.772.1271<tel:%2B1.415.772.1271> sflanagan@sidley.com<mailto:sflanagan@sidley.com> **************************************************************************************************** This e-mail is sent by a law firm and may contain information that is privileged or confidential. If you are not the intended recipient, please delete the e-mail and any attachments and notify us immediately. **************************************************************************************************** _______________________________________________ Cwg-client mailing list Cwg-client@icann.org<mailto:Cwg-client@icann.org> https://mm.icann.org/mailman/listinfo/cwg-client -- NOTICE: This email may contain information which is confidential and/or subject to legal privilege, and is intended for the use of the named addressee only. If you are not the intended recipient, you must not use, disclose or copy any part of this email. If you have received this email by mistake, please notify the sender and delete this message immediately. _______________________________________________ CWG-Stewardship mailing list CWG-Stewardship@icann.org<mailto:CWG-Stewardship@icann.org> https://mm.icann.org/mailman/listinfo/cwg-stewardship
I agree with Greg. This is not a subjective guess, it is based on experience, and on common sense. (As an aside, I find it amusing that people are claiming that a one-off cost associated with legal separation are terrifying while the ongoing costs imposed on the community by creating interminable community working groups for internal oversight and their ‘intensive work weeks’ are all taken in stride. ;-) --MM From: cwg-stewardship-bounces@icann.org [mailto:cwg-stewardship-bounces@icann.org] On Behalf Of Greg Shatan Sent: Monday, April 20, 2015 12:06 AM To: Gomes, Chuck Cc: cwg-stewardship@icann.org Subject: Re: [CWG-Stewardship] [client com] Draft: Summary of Legal Structure for CWG Proposal Respectfully, I disagree with Eduardo and Chuck on the following issue: 2] Items (a) & (c) in section "The weaknesses of the proposed structure are as follows." (page 3): "(a) Requires forming a new entity and on an ongoing basis attending to a set of associated corporate formalities, although those can be fairly minimal;" " (c) May have some negative impact on operational efficiency due to the functional separation, and the separate legal status will introduce some additional costs, although those should not be significant." I suggest to delete the two statements pointed here by an underline/italics. Both statements are seemly subjectives and tend to steer the reader to think that this will be easy to implement and that it will not be costly. There has not been any deep analysis done on these to support either statement. As a general point, we have asked counsel to provide us not only with their technical expertise, but also with the benefit of their practical experience. Here they are telling us two things based on their experience: -- corporate formalities "can be fairly minimal." -- additional costs introduced by operating PTI with a separate legal status "should not be significant." Our counsels' practical experience certainly includes forming corporate entities and attending to corporate formalities (sometimes called "corporate housekeeping") -- I'd daresay among our counsel they have done and continue to do this for hundreds (if not thousands) of corporations. From my own experience and knowledge, corporate formation and corporate housekeeping are essentially ministerial tasks, and are neither particularly complex or time-consuming (though it requires some familiarity and experience to do these tasks). It's really a fairly objective and entirely reasonable statement for someone with the requisite knowledge to say that these "can be fairly minimal." Indeed, I can't think of a scenario where attending to corporate formalities would not be fairly minimal. Similarly, I'm fairly sure counsel have dealt many times with the costs associated with having business units in wholly-owned or controlled subsidiaries rather than divisions, and they are aware of what those costs are. Again this seems like a reasonable statement and one that I'm sure is made objectively. From my experience, the costs that are a direct result of running a business as a subsidiary, as opposed to as a business unit within the same entity, are not significant. In sum, I believe these are both reasonable and very unsurprising statements. I know that it is not the intent, but I think that giving the impression that the opposite (corporate formalities are not fairly minimal; costs resulting from operating a business as a subsidiary (vs. as a business unit) are significant) could be true creates FUD where there should be none. Therefore, I think it would be appropriate to accept this advice. If we don't want to accept counsel's advice, I don't think the appropriate response is to delete it. Rather, I think the appropriate action would be to ask counsel to explain the basis of the statements. Alternatively, we could insert "counsel advises" after "although" in each statement. Let me say that I don't believe we need to do either of these things. But, if the group is not willing to accept these and move on, these are the courses of action that should be considered. Greg On Sun, Apr 19, 2015 at 11:51 AM, Gomes, Chuck <cgomes@verisign.com<mailto:cgomes@verisign.com>> wrote: I think that Eduardo is probably right that we really don’t know whether the increased cost for the legal separation will be significant or not without a detailed analysis by the Finance Team. Now that we are specifically leaning toward the legal separation approach, I suggest that we request an analysis by the Finance Team right away. It will take them awhile to do it and they will probably have some questions for us but the sooner we get that started the better. Xavier understands that a lot of the shared IANA costs can still be shared so that will minimize the increase but there will still be increases. As far as the language in © below, I suggest we say something along these lines instead saying ‘although those should not be significant’: “The significance of the increased costs cannot be determined until a detailed analysis is done by the ICANN Finance Team, but the CWG has requested that analysis and expects to have at least preliminary results before the public comment period ends.” Chuck From: cwg-stewardship-bounces@icann.org<mailto:cwg-stewardship-bounces@icann.org> [mailto:cwg-stewardship-bounces@icann.org<mailto:cwg-stewardship-bounces@icann.org>] On Behalf Of Eduardo Diaz Sent: Saturday, April 18, 2015 4:43 PM To: cwg-stewardship@icann.org<mailto:cwg-stewardship@icann.org> Subject: Re: [CWG-Stewardship] [client com] Draft: Summary of Legal Structure for CWG Proposal My comments about the S-A document 20179247_3 on legal structure: 1] It is not clear who is going to decide about the concepts of designator vs. members (2nd para, page3). Is this an item for the CCWG to resolve? 2] Items (a) & (c) in section "The weaknesses of the proposed structure are as follows." (page 3): "(a) Requires forming a new entity and on an ongoing basis attending to a set of associated corporate formalities, although those can be fairly minimal;" " (c) May have some negative impact on operational efficiency due to the functional separation, and the separate legal status will introduce some additional costs, although those should not be significant." I suggest to delete the two statements pointed here by an underline/italics. Both statements are seemly subjectives and tend to steer the reader to think that this will be easy to implement and that it will not be costly. There has not been any deep analysis done on these to support either statement. -ed On Sat, Apr 18, 2015 at 1:49 PM, Client Committee List for CWG <cwg-client@icann.org<mailto:cwg-client@icann.org>> wrote: Dear All, Attached is a summary of the current legal structure under consideration by the CWG. This also includes the CCWG dependencies. Please let us know if you have any comments or would like to discuss. Best regards, Sharon SHARON FLANAGAN Partner Sidley Austin LLP +1.415.772.1271<tel:%2B1.415.772.1271> sflanagan@sidley.com<mailto:sflanagan@sidley.com> **************************************************************************************************** This e-mail is sent by a law firm and may contain information that is privileged or confidential. If you are not the intended recipient, please delete the e-mail and any attachments and notify us immediately. **************************************************************************************************** _______________________________________________ Cwg-client mailing list Cwg-client@icann.org<mailto:Cwg-client@icann.org> https://mm.icann.org/mailman/listinfo/cwg-client -- NOTICE: This email may contain information which is confidential and/or subject to legal privilege, and is intended for the use of the named addressee only. If you are not the intended recipient, you must not use, disclose or copy any part of this email. If you have received this email by mistake, please notify the sender and delete this message immediately. _______________________________________________ CWG-Stewardship mailing list CWG-Stewardship@icann.org<mailto:CWG-Stewardship@icann.org> https://mm.icann.org/mailman/listinfo/cwg-stewardship
I must of missed something. Who has claimed that the legal separation costs are terrifying? Chuck From: Milton L Mueller [mailto:mueller@syr.edu] Sent: Monday, April 20, 2015 10:06 AM To: 'Greg Shatan'; Gomes, Chuck Cc: 'cwg-stewardship@icann.org' Subject: RE: [CWG-Stewardship] [client com] Draft: Summary of Legal Structure for CWG Proposal I agree with Greg. This is not a subjective guess, it is based on experience, and on common sense. (As an aside, I find it amusing that people are claiming that a one-off cost associated with legal separation are terrifying while the ongoing costs imposed on the community by creating interminable community working groups for internal oversight and their ‘intensive work weeks’ are all taken in stride. ;-) --MM From: cwg-stewardship-bounces@icann.org<mailto:cwg-stewardship-bounces@icann.org> [mailto:cwg-stewardship-bounces@icann.org] On Behalf Of Greg Shatan Sent: Monday, April 20, 2015 12:06 AM To: Gomes, Chuck Cc: cwg-stewardship@icann.org<mailto:cwg-stewardship@icann.org> Subject: Re: [CWG-Stewardship] [client com] Draft: Summary of Legal Structure for CWG Proposal Respectfully, I disagree with Eduardo and Chuck on the following issue: 2] Items (a) & (c) in section "The weaknesses of the proposed structure are as follows." (page 3): "(a) Requires forming a new entity and on an ongoing basis attending to a set of associated corporate formalities, although those can be fairly minimal;" " (c) May have some negative impact on operational efficiency due to the functional separation, and the separate legal status will introduce some additional costs, although those should not be significant." I suggest to delete the two statements pointed here by an underline/italics. Both statements are seemly subjectives and tend to steer the reader to think that this will be easy to implement and that it will not be costly. There has not been any deep analysis done on these to support either statement. As a general point, we have asked counsel to provide us not only with their technical expertise, but also with the benefit of their practical experience. Here they are telling us two things based on their experience: -- corporate formalities "can be fairly minimal." -- additional costs introduced by operating PTI with a separate legal status "should not be significant." Our counsels' practical experience certainly includes forming corporate entities and attending to corporate formalities (sometimes called "corporate housekeeping") -- I'd daresay among our counsel they have done and continue to do this for hundreds (if not thousands) of corporations. From my own experience and knowledge, corporate formation and corporate housekeeping are essentially ministerial tasks, and are neither particularly complex or time-consuming (though it requires some familiarity and experience to do these tasks). It's really a fairly objective and entirely reasonable statement for someone with the requisite knowledge to say that these "can be fairly minimal." Indeed, I can't think of a scenario where attending to corporate formalities would not be fairly minimal. Similarly, I'm fairly sure counsel have dealt many times with the costs associated with having business units in wholly-owned or controlled subsidiaries rather than divisions, and they are aware of what those costs are. Again this seems like a reasonable statement and one that I'm sure is made objectively. From my experience, the costs that are a direct result of running a business as a subsidiary, as opposed to as a business unit within the same entity, are not significant. In sum, I believe these are both reasonable and very unsurprising statements. I know that it is not the intent, but I think that giving the impression that the opposite (corporate formalities are not fairly minimal; costs resulting from operating a business as a subsidiary (vs. as a business unit) are significant) could be true creates FUD where there should be none. Therefore, I think it would be appropriate to accept this advice. If we don't want to accept counsel's advice, I don't think the appropriate response is to delete it. Rather, I think the appropriate action would be to ask counsel to explain the basis of the statements. Alternatively, we could insert "counsel advises" after "although" in each statement. Let me say that I don't believe we need to do either of these things. But, if the group is not willing to accept these and move on, these are the courses of action that should be considered. Greg On Sun, Apr 19, 2015 at 11:51 AM, Gomes, Chuck <cgomes@verisign.com<mailto:cgomes@verisign.com>> wrote: I think that Eduardo is probably right that we really don’t know whether the increased cost for the legal separation will be significant or not without a detailed analysis by the Finance Team. Now that we are specifically leaning toward the legal separation approach, I suggest that we request an analysis by the Finance Team right away. It will take them awhile to do it and they will probably have some questions for us but the sooner we get that started the better. Xavier understands that a lot of the shared IANA costs can still be shared so that will minimize the increase but there will still be increases. As far as the language in © below, I suggest we say something along these lines instead saying ‘although those should not be significant’: “The significance of the increased costs cannot be determined until a detailed analysis is done by the ICANN Finance Team, but the CWG has requested that analysis and expects to have at least preliminary results before the public comment period ends.” Chuck From: cwg-stewardship-bounces@icann.org<mailto:cwg-stewardship-bounces@icann.org> [mailto:cwg-stewardship-bounces@icann.org<mailto:cwg-stewardship-bounces@icann.org>] On Behalf Of Eduardo Diaz Sent: Saturday, April 18, 2015 4:43 PM To: cwg-stewardship@icann.org<mailto:cwg-stewardship@icann.org> Subject: Re: [CWG-Stewardship] [client com] Draft: Summary of Legal Structure for CWG Proposal My comments about the S-A document 20179247_3 on legal structure: 1] It is not clear who is going to decide about the concepts of designator vs. members (2nd para, page3). Is this an item for the CCWG to resolve? 2] Items (a) & (c) in section "The weaknesses of the proposed structure are as follows." (page 3): "(a) Requires forming a new entity and on an ongoing basis attending to a set of associated corporate formalities, although those can be fairly minimal;" " (c) May have some negative impact on operational efficiency due to the functional separation, and the separate legal status will introduce some additional costs, although those should not be significant." I suggest to delete the two statements pointed here by an underline/italics. Both statements are seemly subjectives and tend to steer the reader to think that this will be easy to implement and that it will not be costly. There has not been any deep analysis done on these to support either statement. -ed On Sat, Apr 18, 2015 at 1:49 PM, Client Committee List for CWG <cwg-client@icann.org<mailto:cwg-client@icann.org>> wrote: Dear All, Attached is a summary of the current legal structure under consideration by the CWG. This also includes the CCWG dependencies. Please let us know if you have any comments or would like to discuss. Best regards, Sharon SHARON FLANAGAN Partner Sidley Austin LLP +1.415.772.1271<tel:%2B1.415.772.1271> sflanagan@sidley.com<mailto:sflanagan@sidley.com> **************************************************************************************************** This e-mail is sent by a law firm and may contain information that is privileged or confidential. If you are not the intended recipient, please delete the e-mail and any attachments and notify us immediately. **************************************************************************************************** _______________________________________________ Cwg-client mailing list Cwg-client@icann.org<mailto:Cwg-client@icann.org> https://mm.icann.org/mailman/listinfo/cwg-client -- NOTICE: This email may contain information which is confidential and/or subject to legal privilege, and is intended for the use of the named addressee only. If you are not the intended recipient, you must not use, disclose or copy any part of this email. If you have received this email by mistake, please notify the sender and delete this message immediately. _______________________________________________ CWG-Stewardship mailing list CWG-Stewardship@icann.org<mailto:CWG-Stewardship@icann.org> https://mm.icann.org/mailman/listinfo/cwg-stewardship
Chuck: As far as I have read emails, no one. -ed On Mon, Apr 20, 2015 at 12:52 PM, Gomes, Chuck <cgomes@verisign.com> wrote:
I must of missed something. Who has claimed that the legal separation costs are terrifying?
Chuck
*From:* Milton L Mueller [mailto:mueller@syr.edu] *Sent:* Monday, April 20, 2015 10:06 AM *To:* 'Greg Shatan'; Gomes, Chuck *Cc:* 'cwg-stewardship@icann.org' *Subject:* RE: [CWG-Stewardship] [client com] Draft: Summary of Legal Structure for CWG Proposal
I agree with Greg. This is not a subjective guess, it is based on experience, and on common sense.
(As an aside, I find it amusing that people are claiming that a one-off cost associated with legal separation are terrifying while the ongoing costs imposed on the community by creating interminable community working groups for internal oversight and their ‘intensive work weeks’ are all taken in stride. ;-)
--MM
*From:* cwg-stewardship-bounces@icann.org [ mailto:cwg-stewardship-bounces@icann.org <cwg-stewardship-bounces@icann.org>] *On Behalf Of *Greg Shatan *Sent:* Monday, April 20, 2015 12:06 AM *To:* Gomes, Chuck *Cc:* cwg-stewardship@icann.org *Subject:* Re: [CWG-Stewardship] [client com] Draft: Summary of Legal Structure for CWG Proposal
Respectfully, I disagree with Eduardo and Chuck on the following issue:
2] Items (a) & (c) in section "The weaknesses of the proposed structure are as follows." (page 3):
*"(a) Requires forming a new entity and on an ongoing basis attending to a set of associated corporate formalities, although those can be fairly minimal;"*
*" (c) May have some negative impact on operational efficiency due to the functional separation, and the separate legal status will introduce some additional costs, although those should not be significant." *
I suggest to delete the two statements pointed here by an underline/italics. Both statements are seemly subjectives and tend to steer the reader
to think that this will be easy to implement and that it will not be costly. There has not been any deep analysis done on these to support either statement.
As a general point, we have asked counsel to provide us not only with their technical expertise, but also with the benefit of their practical experience. Here they are telling us two things based on their experience:
-- corporate formalities "can be fairly minimal."
-- additional costs introduced by operating PTI with a separate legal status "should not be significant."
Our counsels' practical experience certainly includes forming corporate entities and attending to corporate formalities (sometimes called "corporate housekeeping") -- I'd daresay among our counsel they have done and continue to do this for hundreds (if not thousands) of corporations. From my own experience and knowledge, corporate formation and corporate housekeeping are essentially ministerial tasks, and are neither particularly complex or time-consuming (though it requires some familiarity and experience to do these tasks). It's really a fairly objective and entirely reasonable statement for someone with the requisite knowledge to say that these "can be fairly minimal." Indeed, I can't think of a scenario where attending to corporate formalities would not be fairly minimal.
Similarly, I'm fairly sure counsel have dealt many times with the costs associated with having business units in wholly-owned or controlled subsidiaries rather than divisions, and they are aware of what those costs are. Again this seems like a reasonable statement and one that I'm sure is made objectively. From my experience, the costs that are a direct result of running a business as a subsidiary, as opposed to as a business unit within the same entity, are not significant.
In sum, I believe these are both reasonable and very unsurprising statements. I know that it is not the intent, but I think that giving the impression that the opposite (corporate formalities are not fairly minimal; costs resulting from operating a business as a subsidiary (vs. as a business unit) are significant) could be true creates FUD where there should be none. Therefore, I think it would be appropriate to accept this advice.
If we don't want to accept counsel's advice, I don't think the appropriate response is to delete it. Rather, I think the appropriate action would be to ask counsel to explain the basis of the statements. Alternatively, we could insert "counsel advises" after "although" in each statement. Let me say that I don't believe we need to do either of these things. But, if the group is not willing to accept these and move on, these are the courses of action that should be considered.
Greg
On Sun, Apr 19, 2015 at 11:51 AM, Gomes, Chuck <cgomes@verisign.com> wrote:
I think that Eduardo is probably right that we really don’t know whether the increased cost for the legal separation will be significant or not without a detailed analysis by the Finance Team. Now that we are specifically leaning toward the legal separation approach, I suggest that we request an analysis by the Finance Team right away. It will take them awhile to do it and they will probably have some questions for us but the sooner we get that started the better. Xavier understands that a lot of the shared IANA costs can still be shared so that will minimize the increase but there will still be increases. As far as the language in © below, I suggest we say something along these lines instead saying ‘*although those should not be significant*’: “The significance of the increased costs cannot be determined until a detailed analysis is done by the ICANN Finance Team, but the CWG has requested that analysis and expects to have at least preliminary results before the public comment period ends.”
Chuck
*From:* cwg-stewardship-bounces@icann.org [mailto: cwg-stewardship-bounces@icann.org] *On Behalf Of *Eduardo Diaz *Sent:* Saturday, April 18, 2015 4:43 PM *To:* cwg-stewardship@icann.org *Subject:* Re: [CWG-Stewardship] [client com] Draft: Summary of Legal Structure for CWG Proposal
My comments about the S-A document 20179247_3 on legal structure:
1] It is not clear who is going to decide about the concepts of designator vs. members (2nd para, page3). Is this an item for the CCWG to resolve?
2] Items (a) & (c) in section "The weaknesses of the proposed structure are as follows." (page 3):
*"(a) Requires forming a new entity and on an ongoing basis attending to a set of associated corporate formalities, although those can be fairly minimal;"*
*" (c) May have some negative impact on operational efficiency due to the *
*functional separation, and the separate legal status will introduce some *
*additional costs, although those should not be significant." *
I suggest to delete the two statements pointed here by an underline/italics. Both statements are seemly subjectives and tend to steer the reader
to think that this will be easy to implement and that it will not be costly. There has not been any deep analysis done on these to support either statement.
-ed
On Sat, Apr 18, 2015 at 1:49 PM, Client Committee List for CWG < cwg-client@icann.org> wrote:
Dear All,
Attached is a summary of the current legal structure under consideration by the CWG. This also includes the CCWG dependencies.
Please let us know if you have any comments or would like to discuss.
Best regards,
Sharon
*SHARON* *FLANAGAN* Partner
*Sidley Austin LLP* +1.415.772.1271 sflanagan@sidley.com
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participants (6)
-
Eduardo Diaz -
Gomes, Chuck -
Greg Shatan -
Jordan Carter -
Matthew Shears -
Milton L Mueller