Dear Donna Looks to me a very balanced proposal. Of course is impossible to preview the right number of applications. Guess if it will be a very low number of application , to guarantee ICANN will not have a deficit may be ICANn itself can analyzing whole application without external payments. Regarding underserved applicants – being from this kind of region my point would be – if there is no money to pay this front payment it is more possible that the group will have no conditions to explore the domain and this is a risk for the security and stability. What I could suggest is the full payment shale done before the end of the evaluation process. My rationale is Cities governments for instance, as happened here last time, can be in a middle of election process and as such can not expend any $ at the window time for the application, but shall do during the evaluation process, before the process is completed. I could agree with the reimbursement afterwards, but also considering we are working of Auction proceeds and will come out with some suggestion , we also may considere to use the surplus – if any – to continue to sponsor some good projects. Kisses Vanda Scartezini Polo Consultores Associados Av. Paulista 1159, cj 1004 01311-200- Sao Paulo, SP, Brazil Land Line: +55 11 3266.6253 Mobile: + 55 11 98181.1464 Sorry for any typos. From: <gnso-newgtld-wg-wt1-bounces@icann.org<mailto:gnso-newgtld-wg-wt1-bounces@icann.org>> on behalf of "Austin, Donna via Gnso-newgtld-wg-wt1" <gnso-newgtld-wg-wt1@icann.org<mailto:gnso-newgtld-wg-wt1@icann.org>> Reply-To: "Austin, Donna" <Donna.Austin@team.neustar<mailto:Donna.Austin@team.neustar>> Date: Friday, August 4, 2017 at 19:13 To: Sara Bockey <sbockey@godaddy.com<mailto:sbockey@godaddy.com>>, "gnso-newgtld-wg-wt1@icann.org<mailto:gnso-newgtld-wg-wt1@icann.org>" <gnso-newgtld-wg-wt1@icann.org<mailto:gnso-newgtld-wg-wt1@icann.org>> Subject: Re: [Gnso-newgtld-wg-wt1] [EXTERNAL] Work Track 1 Agenda for 8 August 2017 @ 3:00 UTC Hi Sara, all I’ve had a look at the responses to the CC2 responses as they relate to Application Fees and believe that the responses are largely consistent with the discussions we have already had within the working group on this topic. My rudimentary analysis of the comments suggest the following: Based on the CC2 responses it would appear that most of the respondents support the principle of an application fee that is cost neutral or break even, which is consistent with the cost-recovery model that was developed for the 2012 round. However, many of the responses acknowledge that the assumptions of the 2012 round was off the mark because the number of applications exceeded expectations and resulted in a considerable surplus of funds (approximately $100M). It would appear from the responses that there is little support for maintaining the $185,000 application fee into the future, with many responses suggesting a reduction, with the exception of John Poole who recommended that each applicant require a $1m deposit. However, there was support for the principle that the application fee should maintain a bar sufficient to ensure that applications are worth dedicating resources to evaluation and processing; and fees should not be too low as to be detrimental to security and stability and competition between rounds. It would also appear that there is support for the WG providing direction on the use of excess funds, in the event that future rounds result in a surplus of funds. Some suggested considerations for moving this conversation forward: · While it appears that there is consensus around the concept of an application that achieves the principle of cost-recovery, it is impossible for this group to come up with an actual number for any future round because we have no way to predict how many applications there will be. · The number of applications for a future application window will depend on a range of factors, including the amount of the application fee. · We could ask ICANN to provide estimates for costs associated with preparing for the next application window, but I don’t believe we are far along in deciding some of the core issues to provide them with enough guidance on which to base any estimates or predictions. · What we do have from the 2012 application round is an application fee of $185,000 that resulted in 1930 applications—some 1400 more than was predicted. The policy for the WG could potentially be something along the lines of: · The application fee should be based on the principle of cost recovery. · Based on the principles of fairness and competition to 2012 new gTLD applications, $185,000 will be the application fee for any future application window. · In the event of surplus application fees, ICANN will provide all applicants (successful/unsuccessful?) with a reimbursement of an equal share of the surplus application fees; or · In the event of surplus applications fees, ICANN will provide all applicants a reimbursement up to an amount of $50,000/$80,000/$100,000 (successful applicants may choose this reimbursement as a contribution to ICANN’s annual fee); and · The remainder of the surplus application fees will be used to support ICANN’s efforts in Universal Awareness and Universal Acceptance (or some other designated activity) Some exemptions/exceptions: · Applications from underserved regions would/could (depending on the policy) have the application fee waived so that it is not considered a barrier to entry. · There may be other exclusions or exemptions from the application fee that could be developed to remove other possible barriers to entry perceived by some as being too high. Rationale: · We have a principle of cost recovery, but rather than requiring complex economic modelling (or somebody’s best guess) to arrive at the amount of the application fee, we achieve the principle in an order of reverse by providing a reimbursement of a portion of the application fee equal to the distribution of excess funds. I don’t believe we can solve this problem absent a considerable amount of data that at this point in time simply doesn’t exist, so I offer this as a possible way to enable us to move forward and certainly to encourage discussion. Donna From: gnso-newgtld-wg-wt1-bounces@icann.org<mailto:gnso-newgtld-wg-wt1-bounces@icann.org> [mailto:gnso-newgtld-wg-wt1-bounces@icann.org] On Behalf Of Sara Bockey Sent: Thursday, August 03, 2017 9:31 AM To: gnso-newgtld-wg-wt1@icann.org<mailto:gnso-newgtld-wg-wt1@icann.org> Subject: [EXTERNAL] [Gnso-newgtld-wg-wt1] Work Track 1 Agenda for 8 August 2017 @ 3:00 UTC Dear All, The next call for the New gTLD Subsequent Procedures Sub Team – Track 1 - Overall Process/Support/Outreach Issue will take place on Tuesday, 8 August 2017 at 3:00 UTC. The proposed agenda is as follows: 1. Welcome & Agenda Overview 2. SOIs 3. Review of CC2 responses to WT1 questions * Application Fees * Systems 4. AOB The CC2 responses we will be covering may be review in the google document: https://docs.google.com/spreadsheets/d/1427pgTCkguOj2NZZzMnz_H_lPe54dtvUErSJd9uhkZw/edit#gid=1442059046<https://urldefense.proofpoint.com/v2/url?u=https-3A__docs.google.com_spreadsheets_d_1427pgTCkguOj2NZZzMnz-5FH-5FlPe54dtvUErSJd9uhkZw_edit-23gid-3D1442059046&d=DwMGaQ&c=MOptNlVtIETeDALC_lULrw&r=CwipU91YB6EkpFXK9ynnT_QUef4yC5p7jpsDm8cU97g&m=KxXpBeMo6gbRQ-BqdZ0TqFv_TRF2rGQiCdN-DB_qN84&s=4vy3M-5mmpfeBvqqyXWRPSI-t6ZrUwBiYzDw4G8yxqQ&e=>. Chat soon! Sara sara bockey policy manager | GoDaddy™ sbockey@godaddy.com<mailto:sbockey@godaddy.com> 480-366-3616 skype: sbockey This email message and any attachments hereto is intended for use only by the addressee(s) named herein and may contain confidential information. If you have received this email in error, please immediately notify the sender and permanently delete the original and any copy of this message and its attachments.

Hi Rubens and Vanda, comments inline below. From: Rubens Kuhl [mailto:rubensk@nic.br] Sent: Sunday, August 06, 2017 3:23 PM To: Austin, Donna <Donna.Austin@team.neustar> Cc: Sara Bockey <sbockey@godaddy.com>; gnso-newgtld-wg-wt1@icann.org Subject: Re: [Gnso-newgtld-wg-wt1] [EXTERNAL] Work Track 1 Agenda for 8 August 2017 @ 3:00 UTC Donna, I believe the data points you mentioned do exist, in the form of the actual expenses incurred by ICANN in the 2012-round. And considering the gains of scale foreseen by aggregating technical evaluation per back-end, with or without RSP program, the actual cost for further rounds is clearly expected to be lower. DA: I agree that there is data available from 2012 that could be helpful to our discussion and to that end, we should ask Trang if she can provide an overview of the costs associated with the 2012 round, but we would need to define the cost parameters. I agree that an RSP program could reduce the costs associated with the technical evaluation, but current discussions suggest that the technical evaluation could still occur during the application process. But we could adopt something in between specifying a new application fee and the reimbursement idea, like this: - Application fee will be no less than 50% of the 2012-round fee, and designed to be of a cost-recovery target; in the event it generates more surplus than expected, the reimbursement will be available either as credit towards registry fees for successful applicants or reimbursement for non-approved or drop-out applicants. DA: I have no objection to the concept, but 50% seems to be a large reduction in terms of fairness and competition for 2012 applicants, but I accept your note below that 2012 applicants will have a time-to-market advantage over future entrants. Any number we come up will largely be arbitrary at this point so the challenge is to come up with a reasoned rationale. We should also look for options to address Vanda’s point about not making the upfront fee too prohibitive, or finding a mechanism that would allow applicants from underserved regions to pay post-evaluation. This would become complicated where there is contention for the string, but if there was no competition for the string then perhaps this would be a little easier. It’s also important to decide whether the application fee would change over time. I must admit that when I was thinking about this, it was only from the perspective of the next application window and not beyond that. It would be fair to assume that a lot of the setup costs for the next application window will not be repeated for processes beyond that, particularly as it relates to infrastructure or software development. The outcome of the rounds v first-come-first-serve discussion will be important to this one. One issue to calculate the reimbursement is how much does the legal reserves need to be; the 2012-round proved that litigation either thru internal accountability or legal courts will happen, but how much ? If someone from the work track, or someone from ICANN Board risk committee, could provide an actuary's point of view would be interesting. DA: Agree that a % of the application fee should be set aside for legal reserves, on the condition that the reserves are set aside for a designated period of time. We should note that 2012-round applicants got a 4 to 6 years time-to-market advantage, and that could be worth much more than the application fee difference. Rubens On Aug 4, 2017, at 7:13 PM, Austin, Donna via Gnso-newgtld-wg-wt1 <gnso-newgtld-wg-wt1@icann.org<mailto:gnso-newgtld-wg-wt1@icann.org>> wrote: Hi Sara, all I’ve had a look at the responses to the CC2 responses as they relate to Application Fees and believe that the responses are largely consistent with the discussions we have already had within the working group on this topic. My rudimentary analysis of the comments suggest the following: Based on the CC2 responses it would appear that most of the respondents support the principle of an application fee that is cost neutral or break even, which is consistent with the cost-recovery model that was developed for the 2012 round. However, many of the responses acknowledge that the assumptions of the 2012 round was off the mark because the number of applications exceeded expectations and resulted in a considerable surplus of funds (approximately $100M). It would appear from the responses that there is little support for maintaining the $185,000 application fee into the future, with many responses suggesting a reduction, with the exception of John Poole who recommended that each applicant require a $1m deposit. However, there was support for the principle that the application fee should maintain a bar sufficient to ensure that applications are worth dedicating resources to evaluation and processing; and fees should not be too low as to be detrimental to security and stability and competition between rounds. It would also appear that there is support for the WG providing direction on the use of excess funds, in the event that future rounds result in a surplus of funds. Some suggested considerations for moving this conversation forward: • While it appears that there is consensus around the concept of an application that achieves the principle of cost-recovery, it is impossible for this group to come up with an actual number for any future round because we have no way to predict how many applications there will be. • The number of applications for a future application window will depend on a range of factors, including the amount of the application fee. • We could ask ICANN to provide estimates for costs associated with preparing for the next application window, but I don’t believe we are far along in deciding some of the core issues to provide them with enough guidance on which to base any estimates or predictions. • What we do have from the 2012 application round is an application fee of $185,000 that resulted in 1930 applications—some 1400 more than was predicted. The policy for the WG could potentially be something along the lines of: • The application fee should be based on the principle of cost recovery. • Based on the principles of fairness and competition to 2012 new gTLD applications, $185,000 will be the application fee for any future application window. • In the event of surplus application fees, ICANN will provide all applicants (successful/unsuccessful?) with a reimbursement of an equal share of the surplus application fees; or • In the event of surplus applications fees, ICANN will provide all applicants a reimbursement up to an amount of $50,000/$80,000/$100,000 (successful applicants may choose this reimbursement as a contribution to ICANN’s annual fee); and • The remainder of the surplus application fees will be used to support ICANN’s efforts in Universal Awareness and Universal Acceptance (or some other designated activity) Some exemptions/exceptions: • Applications from underserved regions would/could (depending on the policy) have the application fee waived so that it is not considered a barrier to entry. • There may be other exclusions or exemptions from the application fee that could be developed to remove other possible barriers to entry perceived by some as being too high. Rationale: • We have a principle of cost recovery, but rather than requiring complex economic modelling (or somebody’s best guess) to arrive at the amount of the application fee, we achieve the principle in an order of reverse by providing a reimbursement of a portion of the application fee equal to the distribution of excess funds. I don’t believe we can solve this problem absent a considerable amount of data that at this point in time simply doesn’t exist, so I offer this as a possible way to enable us to move forward and certainly to encourage discussion. Donna From: gnso-newgtld-wg-wt1-bounces@icann.org<mailto:gnso-newgtld-wg-wt1-bounces@icann.org> [mailto:gnso-newgtld-wg-wt1-bounces@icann.org] On Behalf Of Sara Bockey Sent: Thursday, August 03, 2017 9:31 AM To: gnso-newgtld-wg-wt1@icann.org<mailto:gnso-newgtld-wg-wt1@icann.org> Subject: [EXTERNAL] [Gnso-newgtld-wg-wt1] Work Track 1 Agenda for 8 August 2017 @ 3:00 UTC Dear All, The next call for the New gTLD Subsequent Procedures Sub Team – Track 1 - Overall Process/Support/Outreach Issue will take place on Tuesday, 8 August 2017 at 3:00 UTC. The proposed agenda is as follows: 1. Welcome & Agenda Overview 2. SOIs 3. Review of CC2 responses to WT1 questions * Application Fees * Systems 1. AOB The CC2 responses we will be covering may be review in the google document: https://docs.google.com/spreadsheets/d/1427pgTCkguOj2NZZzMnz_H_lPe54dtvUErSJd9uhkZw/edit#gid=1442059046<https://urldefense.proofpoint.com/v2/url?u=https-3A__docs.google.com_spreadsheets_d_1427pgTCkguOj2NZZzMnz-5FH-5FlPe54dtvUErSJd9uhkZw_edit-23gid-3D1442059046&d=DwMGaQ&c=MOptNlVtIETeDALC_lULrw&r=CwipU91YB6EkpFXK9ynnT_QUef4yC5p7jpsDm8cU97g&m=KxXpBeMo6gbRQ-BqdZ0TqFv_TRF2rGQiCdN-DB_qN84&s=4vy3M-5mmpfeBvqqyXWRPSI-t6ZrUwBiYzDw4G8yxqQ&e=>. Chat soon! Sara sara bockey policy manager | GoDaddy™ sbockey@godaddy.com<mailto:sbockey@godaddy.com> 480-366-3616 skype: sbockey This email message and any attachments hereto is intended for use only by the addressee(s) named herein and may contain confidential information. If you have received this email in error, please immediately notify the sender and permanently delete the original and any copy of this message and its attachments. _______________________________________________ Gnso-newgtld-wg-wt1 mailing list Gnso-newgtld-wg-wt1@icann.org<mailto:Gnso-newgtld-wg-wt1@icann.org> https://mm.icann.org/mailman/listinfo/gnso-newgtld-wg-wt1<https://urldefense.proofpoint.com/v2/url?u=https-3A__mm.icann.org_mailman_listinfo_gnso-2Dnewgtld-2Dwg-2Dwt1&d=DwMFaQ&c=MOptNlVtIETeDALC_lULrw&r=CwipU91YB6EkpFXK9ynnT_QUef4yC5p7jpsDm8cU97g&m=Bdo0YPBPXCMV4oPzXW_8oGk9gquzou0maBmme5RbyNA&s=p4hxlu8rLGQN6CfZQEb5ZXdfFayWwy9qK6ooinj_0PQ&e=>

Thank you, Donna, Vanda and Rubens for your feedback on this. You’ve all made some excellent points and suggestions. We look forward to discussing this further and additional input during our next call in a few hours. Best, Sara sara bockey policy manager | GoDaddy™ sbockey@godaddy.com 480-366-3616 skype: sbockey This email message and any attachments hereto is intended for use only by the addressee(s) named herein and may contain confidential information. If you have received this email in error, please immediately notify the sender and permanently delete the original and any copy of this message and its attachments. From: Vanda Scartezini <vanda@scartezini.org> Date: Monday, August 7, 2017 at 1:06 PM To: "Austin, Donna" <Donna.Austin@team.neustar>, Rubens Kuhl <rubensk@nic.br> Cc: Sara Bockey <sbockey@godaddy.com>, "gnso-newgtld-wg-wt1@icann.org" <gnso-newgtld-wg-wt1@icann.org> Subject: Re: [Gnso-newgtld-wg-wt1] [EXTERNAL] Work Track 1 Agenda for 8 August 2017 @ 3:00 UTC Thanks for your feedback Donna. I understand having string conflict will be difficult to postpone but I was thinking only for cities ( government) which can face some pontual difficulty depends on the election calendar of each region. In general I would follow the idea to stick with same price for this next round. May be will be some surplus with such value but we can use as reserve to face any litigation, as suggested by Rubens or well as to define some alternative for reimbursement. Vanda Scartezini Polo Consultores Associados Av. Paulista 1159, cj 1004 01311-200- Sao Paulo, SP, Brazil Land Line: +55 11 3266.6253 Mobile: + 55 11 98181.1464 Sorry for any typos. From: "Austin, Donna" <Donna.Austin@team.neustar<mailto:Donna.Austin@team.neustar>> Date: Monday, August 7, 2017 at 15:10 To: Rubens Kuhl <rubensk@nic.br<mailto:rubensk@nic.br>>, Vanda Scartezini <vanda@scartezini.org<mailto:vanda@scartezini.org>> Cc: Sara Bockey <sbockey@godaddy.com<mailto:sbockey@godaddy.com>>, "gnso-newgtld-wg-wt1@icann.org<mailto:gnso-newgtld-wg-wt1@icann.org>" <gnso-newgtld-wg-wt1@icann.org<mailto:gnso-newgtld-wg-wt1@icann.org>> Subject: RE: [Gnso-newgtld-wg-wt1] [EXTERNAL] Work Track 1 Agenda for 8 August 2017 @ 3:00 UTC Hi Rubens and Vanda, comments inline below. From: Rubens Kuhl [mailto:rubensk@nic.br] Sent: Sunday, August 06, 2017 3:23 PM To: Austin, Donna <Donna.Austin@team.neustar<mailto:Donna.Austin@team.neustar>> Cc: Sara Bockey <sbockey@godaddy.com<mailto:sbockey@godaddy.com>>; gnso-newgtld-wg-wt1@icann.org<mailto:gnso-newgtld-wg-wt1@icann.org> Subject: Re: [Gnso-newgtld-wg-wt1] [EXTERNAL] Work Track 1 Agenda for 8 August 2017 @ 3:00 UTC Donna, I believe the data points you mentioned do exist, in the form of the actual expenses incurred by ICANN in the 2012-round. And considering the gains of scale foreseen by aggregating technical evaluation per back-end, with or without RSP program, the actual cost for further rounds is clearly expected to be lower. DA: I agree that there is data available from 2012 that could be helpful to our discussion and to that end, we should ask Trang if she can provide an overview of the costs associated with the 2012 round, but we would need to define the cost parameters. I agree that an RSP program could reduce the costs associated with the technical evaluation, but current discussions suggest that the technical evaluation could still occur during the application process. But we could adopt something in between specifying a new application fee and the reimbursement idea, like this: - Application fee will be no less than 50% of the 2012-round fee, and designed to be of a cost-recovery target; in the event it generates more surplus than expected, the reimbursement will be available either as credit towards registry fees for successful applicants or reimbursement for non-approved or drop-out applicants. DA: I have no objection to the concept, but 50% seems to be a large reduction in terms of fairness and competition for 2012 applicants, but I accept your note below that 2012 applicants will have a time-to-market advantage over future entrants. Any number we come up will largely be arbitrary at this point so the challenge is to come up with a reasoned rationale. We should also look for options to address Vanda’s point about not making the upfront fee too prohibitive, or finding a mechanism that would allow applicants from underserved regions to pay post-evaluation. This would become complicated where there is contention for the string, but if there was no competition for the string then perhaps this would be a little easier. It’s also important to decide whether the application fee would change over time. I must admit that when I was thinking about this, it was only from the perspective of the next application window and not beyond that. It would be fair to assume that a lot of the setup costs for the next application window will not be repeated for processes beyond that, particularly as it relates to infrastructure or software development. The outcome of the rounds v first-come-first-serve discussion will be important to this one. One issue to calculate the reimbursement is how much does the legal reserves need to be; the 2012-round proved that litigation either thru internal accountability or legal courts will happen, but how much ? If someone from the work track, or someone from ICANN Board risk committee, could provide an actuary's point of view would be interesting. DA: Agree that a % of the application fee should be set aside for legal reserves, on the condition that the reserves are set aside for a designated period of time. We should note that 2012-round applicants got a 4 to 6 years time-to-market advantage, and that could be worth much more than the application fee difference. Rubens On Aug 4, 2017, at 7:13 PM, Austin, Donna via Gnso-newgtld-wg-wt1 <gnso-newgtld-wg-wt1@icann.org<mailto:gnso-newgtld-wg-wt1@icann.org>> wrote: Hi Sara, all I’ve had a look at the responses to the CC2 responses as they relate to Application Fees and believe that the responses are largely consistent with the discussions we have already had within the working group on this topic. My rudimentary analysis of the comments suggest the following: Based on the CC2 responses it would appear that most of the respondents support the principle of an application fee that is cost neutral or break even, which is consistent with the cost-recovery model that was developed for the 2012 round. However, many of the responses acknowledge that the assumptions of the 2012 round was off the mark because the number of applications exceeded expectations and resulted in a considerable surplus of funds (approximately $100M). It would appear from the responses that there is little support for maintaining the $185,000 application fee into the future, with many responses suggesting a reduction, with the exception of John Poole who recommended that each applicant require a $1m deposit. However, there was support for the principle that the application fee should maintain a bar sufficient to ensure that applications are worth dedicating resources to evaluation and processing; and fees should not be too low as to be detrimental to security and stability and competition between rounds. It would also appear that there is support for the WG providing direction on the use of excess funds, in the event that future rounds result in a surplus of funds. Some suggested considerations for moving this conversation forward: · While it appears that there is consensus around the concept of an application that achieves the principle of cost-recovery, it is impossible for this group to come up with an actual number for any future round because we have no way to predict how many applications there will be. · The number of applications for a future application window will depend on a range of factors, including the amount of the application fee. · We could ask ICANN to provide estimates for costs associated with preparing for the next application window, but I don’t believe we are far along in deciding some of the core issues to provide them with enough guidance on which to base any estimates or predictions. · What we do have from the 2012 application round is an application fee of $185,000 that resulted in 1930 applications—some 1400 more than was predicted. The policy for the WG could potentially be something along the lines of: · The application fee should be based on the principle of cost recovery. · Based on the principles of fairness and competition to 2012 new gTLD applications, $185,000 will be the application fee for any future application window. · In the event of surplus application fees, ICANN will provide all applicants (successful/unsuccessful?) with a reimbursement of an equal share of the surplus application fees; or · In the event of surplus applications fees, ICANN will provide all applicants a reimbursement up to an amount of $50,000/$80,000/$100,000 (successful applicants may choose this reimbursement as a contribution to ICANN’s annual fee); and · The remainder of the surplus application fees will be used to support ICANN’s efforts in Universal Awareness and Universal Acceptance (or some other designated activity) Some exemptions/exceptions: · Applications from underserved regions would/could (depending on the policy) have the application fee waived so that it is not considered a barrier to entry. · There may be other exclusions or exemptions from the application fee that could be developed to remove other possible barriers to entry perceived by some as being too high. Rationale: · We have a principle of cost recovery, but rather than requiring complex economic modelling (or somebody’s best guess) to arrive at the amount of the application fee, we achieve the principle in an order of reverse by providing a reimbursement of a portion of the application fee equal to the distribution of excess funds. I don’t believe we can solve this problem absent a considerable amount of data that at this point in time simply doesn’t exist, so I offer this as a possible way to enable us to move forward and certainly to encourage discussion. Donna From: gnso-newgtld-wg-wt1-bounces@icann.org<mailto:gnso-newgtld-wg-wt1-bounces@icann.org> [mailto:gnso-newgtld-wg-wt1-bounces@icann.org] On Behalf Of Sara Bockey Sent: Thursday, August 03, 2017 9:31 AM To: gnso-newgtld-wg-wt1@icann.org<mailto:gnso-newgtld-wg-wt1@icann.org> Subject: [EXTERNAL] [Gnso-newgtld-wg-wt1] Work Track 1 Agenda for 8 August 2017 @ 3:00 UTC Dear All, The next call for the New gTLD Subsequent Procedures Sub Team – Track 1 - Overall Process/Support/Outreach Issue will take place on Tuesday, 8 August 2017 at 3:00 UTC. The proposed agenda is as follows: 1. Welcome & Agenda Overview 2. SOIs 3. Review of CC2 responses to WT1 questions * Application Fees * Systems 1. AOB The CC2 responses we will be covering may be review in the google document: https://docs.google.com/spreadsheets/d/1427pgTCkguOj2NZZzMnz_H_lPe54dtvUErSJd9uhkZw/edit#gid=1442059046<https://urldefense.proofpoint.com/v2/url?u=https-3A__docs.google.com_spreadsheets_d_1427pgTCkguOj2NZZzMnz-5FH-5FlPe54dtvUErSJd9uhkZw_edit-23gid-3D1442059046&d=DwMGaQ&c=MOptNlVtIETeDALC_lULrw&r=CwipU91YB6EkpFXK9ynnT_QUef4yC5p7jpsDm8cU97g&m=KxXpBeMo6gbRQ-BqdZ0TqFv_TRF2rGQiCdN-DB_qN84&s=4vy3M-5mmpfeBvqqyXWRPSI-t6ZrUwBiYzDw4G8yxqQ&e=>. Chat soon! Sara sara bockey policy manager | GoDaddy™ sbockey@godaddy.com<mailto:sbockey@godaddy.com> 480-366-3616 skype: sbockey This email message and any attachments hereto is intended for use only by the addressee(s) named herein and may contain confidential information. If you have received this email in error, please immediately notify the sender and permanently delete the original and any copy of this message and its attachments. _______________________________________________ Gnso-newgtld-wg-wt1 mailing list Gnso-newgtld-wg-wt1@icann.org<mailto:Gnso-newgtld-wg-wt1@icann.org> https://mm.icann.org/mailman/listinfo/gnso-newgtld-wg-wt1<https://urldefense.proofpoint.com/v2/url?u=https-3A__mm.icann.org_mailman_listinfo_gnso-2Dnewgtld-2Dwg-2Dwt1&d=DwMFaQ&c=MOptNlVtIETeDALC_lULrw&r=CwipU91YB6EkpFXK9ynnT_QUef4yC5p7jpsDm8cU97g&m=Bdo0YPBPXCMV4oPzXW_8oGk9gquzou0maBmme5RbyNA&s=p4hxlu8rLGQN6CfZQEb5ZXdfFayWwy9qK6ooinj_0PQ&e=>

Alan I believe the applications from 2012 were done in batches and I think Trang made some comments in this regard on a recent call. Donna From: Alan Greenberg [mailto:alan.greenberg@mcgill.ca] Sent: Monday, August 07, 2017 4:07 PM To: Sara Bockey <sbockey@godaddy.com>; Vanda Scartezini <vanda@scartezini.org>; Austin, Donna <Donna.Austin@team.neustar>; Rubens Kuhl <rubensk@nic.br> Cc: gnso-newgtld-wg-wt1@icann.org Subject: Re: [Gnso-newgtld-wg-wt1] [EXTERNAL] Work Track 1 Agenda for 8 August 2017 @ 3:00 UTC As I read through these responses, a question came to mind. Is or was there an economy of scale in processing applications. That is, it is more expensive to process say 10 applications one by one than as a batch. If there is an economy of scale, the price that is set should work for the later staeady-state situation where the applications may be coming in slowly and will need to be processed one at a time. Alan At 07/08/2017 04:37 PM, Sara Bockey wrote: Thank you, Donna, Vanda and Rubens for your feedback on this. You’ve all made some excellent points and suggestions. We look forward to discussing this further and additional input during our next call in a few hours. Best, Sara sara bockey policy manager | GoDaddy™ sbockey@godaddy.com<mailto:sbockey@godaddy.com> 480-366-3616 skype: sbockey This email message and any attachments hereto is intended for use only by the addressee(s) named herein and may contain confidential information. If you have received this email in error, please immediately notify the sender and permanently delete the original and any copy of this message and its attachments. From: Vanda Scartezini <vanda@scartezini.org<mailto:vanda@scartezini.org>> Date: Monday, August 7, 2017 at 1:06 PM To: "Austin, Donna" <Donna.Austin@team.neustar<mailto:Donna.Austin@team.neustar>>, Rubens Kuhl <rubensk@nic.br<mailto:rubensk@nic.br>> Cc: Sara Bockey <sbockey@godaddy.com<mailto:sbockey@godaddy.com>>, "gnso-newgtld-wg-wt1@icann.org<mailto:gnso-newgtld-wg-wt1@icann.org>" <gnso-newgtld-wg-wt1@icann.org<mailto:gnso-newgtld-wg-wt1@icann.org>> Subject: Re: [Gnso-newgtld-wg-wt1] [EXTERNAL] Work Track 1 Agenda for 8 August 2017 @ 3:00 UTC Thanks for your feedback Donna. I understand having string conflict will be difficult to postpone but I was thinking only for cities ( government) which can face some pontual difficulty depends on the election calendar of each region. In general I would follow the idea to stick with same price for this next round. May be will be some surplus with such value but we can use as reserve to face any litigation, as suggested by Rubens or well as to define some alternative for reimbursement. Vanda Scartezini Polo Consultores Associados Av. Paulista 1159, cj 1004 01311-200- Sao Paulo, SP, Brazil Land Line: +55 11 3266.6253 Mobile: + 55 11 98181.1464 Sorry for any typos. From: "Austin, Donna" < Donna.Austin@team.neustar<mailto:Donna.Austin@team.neustar>> Date: Monday, August 7, 2017 at 15:10 To: Rubens Kuhl <rubensk@nic.br<mailto:rubensk@nic.br>>, Vanda Scartezini <vanda@scartezini.org<mailto:vanda@scartezini.org>> Cc: Sara Bockey <sbockey@godaddy.com<mailto:sbockey@godaddy.com>>, " gnso-newgtld-wg-wt1@icann.org<mailto:gnso-newgtld-wg-wt1@icann.org>" < gnso-newgtld-wg-wt1@icann.org<mailto:gnso-newgtld-wg-wt1@icann.org>> Subject: RE: [Gnso-newgtld-wg-wt1] [EXTERNAL] Work Track 1 Agenda for 8 August 2017 @ 3:00 UTC Hi Rubens and Vanda, comments inline below. From: Rubens Kuhl [mailto:rubensk@nic.br] Sent: Sunday, August 06, 2017 3:23 PM To: Austin, Donna < Donna.Austin@team.neustar<mailto:Donna.Austin@team.neustar>> Cc: Sara Bockey <sbockey@godaddy.com<mailto:sbockey@godaddy.com>>; gnso-newgtld-wg-wt1@icann.org<mailto:gnso-newgtld-wg-wt1@icann.org> Subject: Re: [Gnso-newgtld-wg-wt1] [EXTERNAL] Work Track 1 Agenda for 8 August 2017 @ 3:00 UTC Donna, I believe the data points you mentioned do exist, in the form of the actual expenses incurred by ICANN in the 2012-round. And considering the gains of scale foreseen by aggregating technical evaluation per back-end, with or without RSP program, the actual cost for further rounds is clearly expected to be lower. DA: I agree that there is data available from 2012 that could be helpful to our discussion and to that end, we should ask Trang if she can provide an overview of the costs associated with the 2012 round, but we would need to define the cost parameters. I agree that an RSP program could reduce the costs associated with the technical evaluation, but current discussions suggest that the technical evaluation could still occur during the application process. But we could adopt something in between specifying a new application fee and the reimbursement idea, like this: - Application fee will be no less than 50% of the 2012-round fee, and designed to be of a cost-recovery target; in the event it generates more surplus than expected, the reimbursement will be available either as credit towards registry fees for successful applicants or reimbursement for non-approved or drop-out applicants. DA: I have no objection to the concept, but 50% seems to be a large reduction in terms of fairness and competition for 2012 applicants, but I accept your note below that 2012 applicants will have a time-to-market advantage over future entrants. Any number we come up will largely be arbitrary at this point so the challenge is to come up with a reasoned rationale. We should also look for options to address Vanda’s point about not making the upfront fee too prohibitive, or finding a mechanism that would allow applicants from underserved regions to pay post-evaluation. This would become complicated where there is contention for the string, but if there was no competition for the string then perhaps this would be a little easier. It’s also important to decide whether the application fee would change over time. I must admit that when I was thinking about this, it was only from the perspective of the next application window and not beyond that. It would be fair to assume that a lot of the setup costs for the next application window will not be repeated for processes beyond that, particularly as it relates to infrastructure or software development. The outcome of the rounds v first-come-first-serve discussion will be important to this one. One issue to calculate the reimbursement is how much does the legal reserves need to be; the 2012-round proved that litigation either thru internal accountability or legal courts will happen, but how much ? If someone from the work track, or someone from ICANN Board risk committee, could provide an actuary's point of view would be interesting. DA: Agree that a % of the application fee should be set aside for legal reserves, on the condition that the reserves are set aside for a designated period of time. We should note that 2012-round applicants got a 4 to 6 years time-to-market advantage, and that could be worth much more than the application fee difference. Rubens On Aug 4, 2017, at 7:13 PM, Austin, Donna via Gnso-newgtld-wg-wt1 < gnso-newgtld-wg-wt1@icann.org<mailto:gnso-newgtld-wg-wt1@icann.org>> wrote: Hi Sara, all I’ve had a look at the responses to the CC2 responses as they relate to Application Fees and believe that the responses are largely consistent with the discussions we have already had within the working group on this topic. My rudimentary analysis of the comments suggest the following: Based on the CC2 responses it would appear that most of the respondents support the principle of an application fee that is cost neutral or break even, which is consistent with the cost-recovery model that was developed for the 2012 round. However, many of the responses acknowledge that the assumptions of the 2012 round was off the mark because the number of applications exceeded expectations and resulted in a considerable surplus of funds (approximately $100M). It would appear from the responses that there is little support for maintaining the $185,000 application fee into the future, with many responses suggesting a reduction, with the exception of John Poole who recommended that each applicant require a $1m deposit. However, there was support for the principle that the application fee should maintain a bar sufficient to ensure that applications are worth dedicating resources to evaluation and processing; and fees should not be too low as to be detrimental to security and stability and competition between rounds. It would also appear that there is support for the WG providing direction on the use of excess funds, in the event that future rounds result in a surplus of funds. Some suggested considerations for moving this conversation forward: · While it appears that there is consensus around the concept of an application that achieves the principle of cost-recovery, it is impossible for this group to come up with an actual number for any future round because we have no way to predict how many applications there will be. · The number of applications for a future application window will depend on a range of factors, including the amount of the application fee. · We could ask ICANN to provide estimates for costs associated with preparing for the next application window, but I don’t believe we are far along in deciding some of the core issues to provide them with enough guidance on which to base any estimates or predictions. · What we do have from the 2012 application round is an application fee of $185,000 that resulted in 1930 applications—some 1400 more than was preddicted. The policy for the WG could potentially be something along the lines of: · The application fee should be based on the principle of cost recovery. · Based on the principles of fairness and competition to 2012 new gTLD applications, $185,000 will be the application fee for any future application window. · In the event of surplus application fees, ICANN will provide all applicants (successful/unsuccessful?) with a reimbursement of an equal share of the surplus application fees; or · In the event of surplus applications fees, ICANN will provide all applicants a reimbursement up to an amount of $50,000/$80,000/$100,000 (successful applicants may choose this reimbursement as a contribution to ICANN’s annual fee); and · The remainder of the surplus application fees will be used to support ICANN’s efforts in Universal Awareness and Universal Acceptance (or some other designated activity) Some exemptions/exceptions: · Applications from underserved regions would/could (depending on the policy) have the application fee waived so that it is not considered a barrier to entry. · There may be other exclusions or exemptions from the application fee that could be developed to remove other possible barriers to entry perceived by some as being too high. Rationale: · We have a principle of cost recovery, but rather than requiring complex economic modelling (or somebody’s best guess) to arrive at the amount of the application fee, we achieve the principle in an order of reverse by providing a reimbursement of a portion of the application fee equal to the distribution of excess funds. I don’t believe we can solve this problem absent a considerable amount of data that at this point in time simply doesn’t exist, so I offer this as a possible way to enable us to move forward and certainly to encourage discussion. Donna From: gnso-newgtld-wg-wt1-bounces@icann.org<mailto:gnso-newgtld-wg-wt1-bounces@icann.org> [ mailto:gnso-newgtld-wg-wt1-bounces@icann.org] On Behalf Of Sara Bockey Sent: Thursday, August 03, 2017 9:31 AM To: gnso-newgtld-wg-wt1@icann.org<mailto:gnso-newgtld-wg-wt1@icann.org> Subject: [EXTERNAL] [Gnso-newgtld-wg-wt1] Work Track 1 Agenda for 8 August 2017 @ 3:00 UTC Dear All, The next call for the New gTLD Subsequent Procedures Sub Team – Track 1 - Overall Process/Suppport/Outreach Issue will take place on Tuesday, 8 August 2017 at 3:00 UTC. The proposed agenda is as follows: Welcome & Agenda Overview SOIs Review of CC2 responses to WT1 questions 1. Application Fees 2. Systems • AOB The CC2 responses we will be covering may be review in the google document: https://docs.google.com/spreadsheets/d/1427pgTCkguOj2NZZzMnz_H_lPe54dtvUErSJd9uhkZw/edit#gid=1442059046<https://urldefense.proofpoint.com/v2/url?u=https-3A__docs.google.com_spreadsheets_d_1427pgTCkguOj2NZZzMnz-5FH-5FlPe54dtvUErSJd9uhkZw_edit-23gid-3D1442059046&d=DwMGaQ&c=MOptNlVtIETeDALC_lULrw&r=CwipU91YB6EkpFXK9ynnT_QUef4yC5p7jpsDm8cU97g&m=KxXpBeMo6gbRQ-BqdZ0TqFv_TRF2rGQiCdN-DB_qN84&s=4vy3M-5mmpfeBvqqyXWRPSI-t6ZrUwBiYzDw4G8yxqQ&e=> . Chat soon! Sara sara bockey policy manager | GoDaddy™ sbockey@godaddy.com<mailto:sbockey@godaddy.com> 480-366-3616 skype: sbockey This email message and any attachments hereto is intended for use only by the addressee(s) named herein and may contain confidential information. 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Dear Vanda, It is usually NOT the city Government that applies for a city based gTLD – nor should it be. Not even in Russia the Government intervened with free business (.moscow for example is NOT a Government company). The Internet is NOT a Government controlled and owned environment – and I assume we will find close to zero proponents to make big changes to that status quo. The biggest ccTLD for example is completely FREE of Government control whatsoever. And Germans so much like to “control” :D But your comment regarding “election periods” points to a good question: What should be the maximum age for a letter of non-objection? I think 3 month prior to the actual application date would be a good measure. 2.2.1.4.3 doesn’t provide guidance here (or have I missed it?). Also: While it allows for a withdrawal of support “if the registry operator has deviated from the conditions of original support or nonobjection”: what if a newly incoming city council withdraws a just 2 month old letter WITHOUT any reasons (just to “stick it” to the former major)? I predict hundreds of geo applications this round – we need more predictability. Thanks, Alexander.berlin From: gnso-newgtld-wg-wt1-bounces@icann.org [mailto:gnso-newgtld-wg-wt1-bounces@icann.org] On Behalf Of Vanda Scartezini Sent: Montag, 7. August 2017 23:07 To: Austin, Donna <Donna.Austin@team.neustar>; Rubens Kuhl <rubensk@nic.br> Cc: gnso-newgtld-wg-wt1@icann.org Subject: Re: [Gnso-newgtld-wg-wt1] [EXTERNAL] Work Track 1 Agenda for 8 August 2017 @ 3:00 UTC Thanks for your feedback Donna. I understand having string conflict will be difficult to postpone but I was thinking only for cities ( government) which can face some pontual difficulty depends on the election calendar of each region. In general I would follow the idea to stick with same price for this next round. May be will be some surplus with such value but we can use as reserve to face any litigation, as suggested by Rubens or well as to define some alternative for reimbursement. Vanda Scartezini Polo Consultores Associados Av. Paulista 1159, cj 1004 01311-200- Sao Paulo, SP, Brazil Land Line: +55 11 3266.6253 Mobile: + 55 11 98181.1464 Sorry for any typos. From: "Austin, Donna" < <mailto:Donna.Austin@team.neustar> Donna.Austin@team.neustar> Date: Monday, August 7, 2017 at 15:10 To: Rubens Kuhl < <mailto:rubensk@nic.br> rubensk@nic.br>, Vanda Scartezini < <mailto:vanda@scartezini.org> vanda@scartezini.org> Cc: Sara Bockey < <mailto:sbockey@godaddy.com> sbockey@godaddy.com>, " <mailto:gnso-newgtld-wg-wt1@icann.org> gnso-newgtld-wg-wt1@icann.org" < <mailto:gnso-newgtld-wg-wt1@icann.org> gnso-newgtld-wg-wt1@icann.org> Subject: RE: [Gnso-newgtld-wg-wt1] [EXTERNAL] Work Track 1 Agenda for 8 August 2017 @ 3:00 UTC Hi Rubens and Vanda, comments inline below. From: Rubens Kuhl [ <mailto:rubensk@nic.br> mailto:rubensk@nic.br] Sent: Sunday, August 06, 2017 3:23 PM To: Austin, Donna < <mailto:Donna.Austin@team.neustar> Donna.Austin@team.neustar> Cc: Sara Bockey < <mailto:sbockey@godaddy.com> sbockey@godaddy.com>; <mailto:gnso-newgtld-wg-wt1@icann.org> gnso-newgtld-wg-wt1@icann.org Subject: Re: [Gnso-newgtld-wg-wt1] [EXTERNAL] Work Track 1 Agenda for 8 August 2017 @ 3:00 UTC Donna, I believe the data points you mentioned do exist, in the form of the actual expenses incurred by ICANN in the 2012-round. And considering the gains of scale foreseen by aggregating technical evaluation per back-end, with or without RSP program, the actual cost for further rounds is clearly expected to be lower. DA: I agree that there is data available from 2012 that could be helpful to our discussion and to that end, we should ask Trang if she can provide an overview of the costs associated with the 2012 round, but we would need to define the cost parameters. I agree that an RSP program could reduce the costs associated with the technical evaluation, but current discussions suggest that the technical evaluation could still occur during the application process. But we could adopt something in between specifying a new application fee and the reimbursement idea, like this: - Application fee will be no less than 50% of the 2012-round fee, and designed to be of a cost-recovery target; in the event it generates more surplus than expected, the reimbursement will be available either as credit towards registry fees for successful applicants or reimbursement for non-approved or drop-out applicants. DA: I have no objection to the concept, but 50% seems to be a large reduction in terms of fairness and competition for 2012 applicants, but I accept your note below that 2012 applicants will have a time-to-market advantage over future entrants. Any number we come up will largely be arbitrary at this point so the challenge is to come up with a reasoned rationale. We should also look for options to address Vanda’s point about not making the upfront fee too prohibitive, or finding a mechanism that would allow applicants from underserved regions to pay post-evaluation. This would become complicated where there is contention for the string, but if there was no competition for the string then perhaps this would be a little easier. It’s also important to decide whether the application fee would change over time. I must admit that when I was thinking about this, it was only from the perspective of the next application window and not beyond that. It would be fair to assume that a lot of the setup costs for the next application window will not be repeated for processes beyond that, particularly as it relates to infrastructure or software development. The outcome of the rounds v first-come-first-serve discussion will be important to this one. One issue to calculate the reimbursement is how much does the legal reserves need to be; the 2012-round proved that litigation either thru internal accountability or legal courts will happen, but how much ? If someone from the work track, or someone from ICANN Board risk committee, could provide an actuary's point of view would be interesting. DA: Agree that a % of the application fee should be set aside for legal reserves, on the condition that the reserves are set aside for a designated period of time. We should note that 2012-round applicants got a 4 to 6 years time-to-market advantage, and that could be worth much more than the application fee difference. Rubens On Aug 4, 2017, at 7:13 PM, Austin, Donna via Gnso-newgtld-wg-wt1 <gnso-newgtld-wg-wt1@icann.org <mailto:gnso-newgtld-wg-wt1@icann.org> > wrote: Hi Sara, all I’ve had a look at the responses to the CC2 responses as they relate to Application Fees and believe that the responses are largely consistent with the discussions we have already had within the working group on this topic. My rudimentary analysis of the comments suggest the following: Based on the CC2 responses it would appear that most of the respondents support the principle of an application fee that is cost neutral or break even, which is consistent with the cost-recovery model that was developed for the 2012 round. However, many of the responses acknowledge that the assumptions of the 2012 round was off the mark because the number of applications exceeded expectations and resulted in a considerable surplus of funds (approximately $100M). It would appear from the responses that there is little support for maintaining the $185,000 application fee into the future, with many responses suggesting a reduction, with the exception of John Poole who recommended that each applicant require a $1m deposit. However, there was support for the principle that the application fee should maintain a bar sufficient to ensure that applications are worth dedicating resources to evaluation and processing; and fees should not be too low as to be detrimental to security and stability and competition between rounds. It would also appear that there is support for the WG providing direction on the use of excess funds, in the event that future rounds result in a surplus of funds. Some suggested considerations for moving this conversation forward: · While it appears that there is consensus around the concept of an application that achieves the principle of cost-recovery, it is impossible for this group to come up with an actual number for any future round because we have no way to predict how many applications there will be. · The number of applications for a future application window will depend on a range of factors, including the amount of the application fee. · We could ask ICANN to provide estimates for costs associated with preparing for the next application window, but I don’t believe we are far along in deciding some of the core issues to provide them with enough guidance on which to base any estimates or predictions. · What we do have from the 2012 application round is an application fee of $185,000 that resulted in 1930 applications—some 1400 more than was predicted. The policy for the WG could potentially be something along the lines of: · The application fee should be based on the principle of cost recovery. · Based on the principles of fairness and competition to 2012 new gTLD applications, $185,000 will be the application fee for any future application window. · In the event of surplus application fees, ICANN will provide all applicants (successful/unsuccessful?) with a reimbursement of an equal share of the surplus application fees; or · In the event of surplus applications fees, ICANN will provide all applicants a reimbursement up to an amount of $50,000/$80,000/$100,000 (successful applicants may choose this reimbursement as a contribution to ICANN’s annual fee); and · The remainder of the surplus application fees will be used to support ICANN’s efforts in Universal Awareness and Universal Acceptance (or some other designated activity) Some exemptions/exceptions: · Applications from underserved regions would/could (depending on the policy) have the application fee waived so that it is not considered a barrier to entry. · There may be other exclusions or exemptions from the application fee that could be developed to remove other possible barriers to entry perceived by some as being too high. Rationale: · We have a principle of cost recovery, but rather than requiring complex economic modelling (or somebody’s best guess) to arrive at the amount of the application fee, we achieve the principle in an order of reverse by providing a reimbursement of a portion of the application fee equal to the distribution of excess funds. I don’t believe we can solve this problem absent a considerable amount of data that at this point in time simply doesn’t exist, so I offer this as a possible way to enable us to move forward and certainly to encourage discussion. Donna From: <mailto:gnso-newgtld-wg-wt1-bounces@icann.org> gnso-newgtld-wg-wt1-bounces@icann.org [ <mailto:gnso-newgtld-wg-wt1-bounces@icann.org> mailto:gnso-newgtld-wg-wt1-bounces@icann.org] On Behalf Of Sara Bockey Sent: Thursday, August 03, 2017 9:31 AM To: <mailto:gnso-newgtld-wg-wt1@icann.org> gnso-newgtld-wg-wt1@icann.org Subject: [EXTERNAL] [Gnso-newgtld-wg-wt1] Work Track 1 Agenda for 8 August 2017 @ 3:00 UTC Dear All, The next call for the New gTLD Subsequent Procedures Sub Team – Track 1 - Overall Process/Support/Outreach Issue will take place on Tuesday, 8 August 2017 at 3:00 UTC. The proposed agenda is as follows: 1. Welcome & Agenda Overview 2. SOIs 3. Review of CC2 responses to WT1 questions 1. Application Fees 2. Systems 4. AOB The CC2 responses we will be covering may be review in the google document: <https://urldefense.proofpoint.com/v2/url?u=https-3A__docs.google.com_spreads...> https://docs.google.com/spreadsheets/d/1427pgTCkguOj2NZZzMnz_H_lPe54dtvUErSJ.... Chat soon! Sara sara bockey policy manager | GoDaddy™ <mailto:sbockey@godaddy.com> sbockey@godaddy.com 480-366-3616 skype: sbockey This email message and any attachments hereto is intended for use only by the addressee(s) named herein and may contain confidential information. If you have received this email in error, please immediately notify the sender and permanently delete the original and any copy of this message and its attachments. _______________________________________________ Gnso-newgtld-wg-wt1 mailing list <mailto:Gnso-newgtld-wg-wt1@icann.org> Gnso-newgtld-wg-wt1@icann.org <https://urldefense.proofpoint.com/v2/url?u=https-3A__mm.icann.org_mailman_li...> https://mm.icann.org/mailman/listinfo/gnso-newgtld-wg-wt1

All, Given that there is active dialogue on this topic and we are heading towards a call which I am unlikely to make, I’d like to add general support to the points laid out by Donna. The proposed policy points have some good ideas in them, clearly developed a little in the dialogue since. The broad principle recognising that we are discussing rounds of the same programme as opposed to independent and different programmes is a point we should remain cognisant of here. Also, to the extent that any subsidy or discounting of application fees is considered, it will be vital ensure that this is not gamed in any way. Jonathan From: Austin, Donna via Gnso-newgtld-wg-wt1 [mailto:gnso-newgtld-wg-wt1@icann.org] Sent: Monday, August 7, 2017 7:10 PM To: Rubens Kuhl <rubensk@nic.br>; vanda@scartezini.org Cc: gnso-newgtld-wg-wt1@icann.org Subject: Re: [Gnso-newgtld-wg-wt1] [EXTERNAL] Work Track 1 Agenda for 8 August 2017 @ 3:00 UTC Hi Rubens and Vanda, comments inline below. From: Rubens Kuhl [mailto:rubensk@nic.br] Sent: Sunday, August 06, 2017 3:23 PM To: Austin, Donna <Donna.Austin@team.neustar <mailto:Donna.Austin@team.neustar> > Cc: Sara Bockey <sbockey@godaddy.com <mailto:sbockey@godaddy.com> >; gnso-newgtld-wg-wt1@icann.org <mailto:gnso-newgtld-wg-wt1@icann.org> Subject: Re: [Gnso-newgtld-wg-wt1] [EXTERNAL] Work Track 1 Agenda for 8 August 2017 @ 3:00 UTC Donna, I believe the data points you mentioned do exist, in the form of the actual expenses incurred by ICANN in the 2012-round. And considering the gains of scale foreseen by aggregating technical evaluation per back-end, with or without RSP program, the actual cost for further rounds is clearly expected to be lower. DA: I agree that there is data available from 2012 that could be helpful to our discussion and to that end, we should ask Trang if she can provide an overview of the costs associated with the 2012 round, but we would need to define the cost parameters. I agree that an RSP program could reduce the costs associated with the technical evaluation, but current discussions suggest that the technical evaluation could still occur during the application process. But we could adopt something in between specifying a new application fee and the reimbursement idea, like this: - Application fee will be no less than 50% of the 2012-round fee, and designed to be of a cost-recovery target; in the event it generates more surplus than expected, the reimbursement will be available either as credit towards registry fees for successful applicants or reimbursement for non-approved or drop-out applicants. DA: I have no objection to the concept, but 50% seems to be a large reduction in terms of fairness and competition for 2012 applicants, but I accept your note below that 2012 applicants will have a time-to-market advantage over future entrants. Any number we come up will largely be arbitrary at this point so the challenge is to come up with a reasoned rationale. We should also look for options to address Vanda’s point about not making the upfront fee too prohibitive, or finding a mechanism that would allow applicants from underserved regions to pay post-evaluation. This would become complicated where there is contention for the string, but if there was no competition for the string then perhaps this would be a little easier. It’s also important to decide whether the application fee would change over time. I must admit that when I was thinking about this, it was only from the perspective of the next application window and not beyond that. It would be fair to assume that a lot of the setup costs for the next application window will not be repeated for processes beyond that, particularly as it relates to infrastructure or software development. The outcome of the rounds v first-come-first-serve discussion will be important to this one. One issue to calculate the reimbursement is how much does the legal reserves need to be; the 2012-round proved that litigation either thru internal accountability or legal courts will happen, but how much ? If someone from the work track, or someone from ICANN Board risk committee, could provide an actuary's point of view would be interesting. DA: Agree that a % of the application fee should be set aside for legal reserves, on the condition that the reserves are set aside for a designated period of time. We should note that 2012-round applicants got a 4 to 6 years time-to-market advantage, and that could be worth much more than the application fee difference. Rubens On Aug 4, 2017, at 7:13 PM, Austin, Donna via Gnso-newgtld-wg-wt1 <gnso-newgtld-wg-wt1@icann.org <mailto:gnso-newgtld-wg-wt1@icann.org> > wrote: Hi Sara, all I’ve had a look at the responses to the CC2 responses as they relate to Application Fees and believe that the responses are largely consistent with the discussions we have already had within the working group on this topic. My rudimentary analysis of the comments suggest the following: Based on the CC2 responses it would appear that most of the respondents support the principle of an application fee that is cost neutral or break even, which is consistent with the cost-recovery model that was developed for the 2012 round. However, many of the responses acknowledge that the assumptions of the 2012 round was off the mark because the number of applications exceeded expectations and resulted in a considerable surplus of funds (approximately $100M). It would appear from the responses that there is little support for maintaining the $185,000 application fee into the future, with many responses suggesting a reduction, with the exception of John Poole who recommended that each applicant require a $1m deposit. However, there was support for the principle that the application fee should maintain a bar sufficient to ensure that applications are worth dedicating resources to evaluation and processing; and fees should not be too low as to be detrimental to security and stability and competition between rounds. It would also appear that there is support for the WG providing direction on the use of excess funds, in the event that future rounds result in a surplus of funds. Some suggested considerations for moving this conversation forward: * While it appears that there is consensus around the concept of an application that achieves the principle of cost-recovery, it is impossible for this group to come up with an actual number for any future round because we have no way to predict how many applications there will be. * The number of applications for a future application window will depend on a range of factors, including the amount of the application fee. * We could ask ICANN to provide estimates for costs associated with preparing for the next application window, but I don’t believe we are far along in deciding some of the core issues to provide them with enough guidance on which to base any estimates or predictions. * What we do have from the 2012 application round is an application fee of $185,000 that resulted in 1930 applications—some 1400 more than was predicted. The policy for the WG could potentially be something along the lines of: * The application fee should be based on the principle of cost recovery. * Based on the principles of fairness and competition to 2012 new gTLD applications, $185,000 will be the application fee for any future application window. * In the event of surplus application fees, ICANN will provide all applicants (successful/unsuccessful?) with a reimbursement of an equal share of the surplus application fees; or * In the event of surplus applications fees, ICANN will provide all applicants a reimbursement up to an amount of $50,000/$80,000/$100,000 (successful applicants may choose this reimbursement as a contribution to ICANN’s annual fee); and * The remainder of the surplus application fees will be used to support ICANN’s efforts in Universal Awareness and Universal Acceptance (or some other designated activity) Some exemptions/exceptions: * Applications from underserved regions would/could (depending on the policy) have the application fee waived so that it is not considered a barrier to entry. * There may be other exclusions or exemptions from the application fee that could be developed to remove other possible barriers to entry perceived by some as being too high. Rationale: * We have a principle of cost recovery, but rather than requiring complex economic modelling (or somebody’s best guess) to arrive at the amount of the application fee, we achieve the principle in an order of reverse by providing a reimbursement of a portion of the application fee equal to the distribution of excess funds. I don’t believe we can solve this problem absent a considerable amount of data that at this point in time simply doesn’t exist, so I offer this as a possible way to enable us to move forward and certainly to encourage discussion. Donna From: gnso-newgtld-wg-wt1-bounces@icann.org <mailto:gnso-newgtld-wg-wt1-bounces@icann.org> [mailto:gnso-newgtld-wg-wt1-bounces@icann.org] On Behalf Of Sara Bockey Sent: Thursday, August 03, 2017 9:31 AM To: gnso-newgtld-wg-wt1@icann.org <mailto:gnso-newgtld-wg-wt1@icann.org> Subject: [EXTERNAL] [Gnso-newgtld-wg-wt1] Work Track 1 Agenda for 8 August 2017 @ 3:00 UTC Dear All, The next call for the New gTLD Subsequent Procedures Sub Team – Track 1 - Overall Process/Support/Outreach Issue will take place on Tuesday, 8 August 2017 at 3:00 UTC. The proposed agenda is as follows: 1. Welcome & Agenda Overview 2. SOIs 3. Review of CC2 responses to WT1 questions 1. Application Fees 2. Systems 4. AOB The CC2 responses we will be covering may be review in the google document: <https://urldefense.proofpoint.com/v2/url?u=https-3A__docs.google.com_spreads...> https://docs.google.com/spreadsheets/d/1427pgTCkguOj2NZZzMnz_H_lPe54dtvUErSJ.... Chat soon! Sara sara bockey policy manager | GoDaddy™ <mailto:sbockey@godaddy.com> sbockey@godaddy.com 480-366-3616 skype: sbockey This email message and any attachments hereto is intended for use only by the addressee(s) named herein and may contain confidential information. If you have received this email in error, please immediately notify the sender and permanently delete the original and any copy of this message and its attachments. _______________________________________________ Gnso-newgtld-wg-wt1 mailing list Gnso-newgtld-wg-wt1@icann.org <mailto:Gnso-newgtld-wg-wt1@icann.org> https://mm.icann.org/mailman/listinfo/gnso-newgtld-wg-wt1 <https://urldefense.proofpoint.com/v2/url?u=https-3A__mm.icann.org_mailman_li...>

To Ashely’s last point and something I mentioned on the call last night. Is it possible to get from the Finance team at ICANN an accounting of everything that went into the “historical costs” to help us assess what might feed into a “cost recovery model” for this next process? Thanks Jim Prendergast The Galway Strategy Group +1 202 285 3699 @jimpren From: gnso-newgtld-wg-wt1-bounces@icann.org [mailto:gnso-newgtld-wg-wt1-bounces@icann.org] On Behalf Of Ashley Roberts Sent: Tuesday, August 08, 2017 12:45 PM To: Austin, Donna <Donna.Austin@team.neustar>; Rubens Kuhl <rubensk@nic.br>; vanda@scartezini.org Cc: gnso-newgtld-wg-wt1@icann.org Subject: Re: [Gnso-newgtld-wg-wt1] [EXTERNAL] Work Track 1 Agenda for 8 August 2017 @ 3:00 UTC Hi Donna, Thanks for getting the ball rolling on this. I agree that the general trend from the CC2 comments and from our work track seems to support application fees being based on cost recovery. I also agree that the CC2 comments don’t seem to support maintaining the fee of $185,000, so I don’t think we should be making a recommendation for a fee of $185,000 for future application windows. Aside from the CC2 comments not seeming to support such a fee, the fact that there was such a large fee surplus from the 2012 round ($96 mil) coupled with the likelihood of improved efficiencies in the evaluation process (e.g. through aggregating back-end evaluation, as Rubens pointed out, and lower development costs, etc.) suggests a cost-recovery based estimate would be lower than $185,000. I also agree with Rubens that we don’t need to tie ourselves to the same fee out of a concern over competition and fairness. The first mover advantage for 2012 applicants was significant (as much as 4 years and counting), plus I don’t think anything in the original policy suggested the fee couldn’t or wouldn’t change in future rounds. While we are probably not currently in a position to put forward a specific amount for the fee, we could recommend that ICANN carry out a fresh cost estimate based upon parameters that we could help define, and upon the information they have from the 2012 costs. Thanks, Ashley Ashley Roberts Senior Manager | Valideus Ltd E: ashley.roberts@valideus.com<mailto:ashley.roberts@valideus.com> D: +44 20 7421 8264 Liability cannot be accepted for statements made which are clearly the sender’s own and not made on behalf of Valideus. This message is intended solely for the addressee and may contain confidential information. If you have received this message in error, please send it back to us, and immediately and permanently delete it. Do not use, copy or disclose the information contained in this message or in any attachment. Valideus Ltd is registered in England and Wales with company number 06181291 and VAT number 987 7551 49. Our registered office is at 28-30 Little Russell Street, London, WC1A 2HN. From: gnso-newgtld-wg-wt1-bounces@icann.org<mailto:gnso-newgtld-wg-wt1-bounces@icann.org> [mailto:gnso-newgtld-wg-wt1-bounces@icann.org] On Behalf Of Austin, Donna via Gnso-newgtld-wg-wt1 Sent: 07 August 2017 19:10 To: Rubens Kuhl <rubensk@nic.br<mailto:rubensk@nic.br>>; vanda@scartezini.org<mailto:vanda@scartezini.org> Cc: gnso-newgtld-wg-wt1@icann.org<mailto:gnso-newgtld-wg-wt1@icann.org> Subject: Re: [Gnso-newgtld-wg-wt1] [EXTERNAL] Work Track 1 Agenda for 8 August 2017 @ 3:00 UTC Hi Rubens and Vanda, comments inline below. From: Rubens Kuhl [mailto:rubensk@nic.br] Sent: Sunday, August 06, 2017 3:23 PM To: Austin, Donna <Donna.Austin@team.neustar<mailto:Donna.Austin@team.neustar>> Cc: Sara Bockey <sbockey@godaddy.com<mailto:sbockey@godaddy.com>>; gnso-newgtld-wg-wt1@icann.org<mailto:gnso-newgtld-wg-wt1@icann.org> Subject: Re: [Gnso-newgtld-wg-wt1] [EXTERNAL] Work Track 1 Agenda for 8 August 2017 @ 3:00 UTC Donna, I believe the data points you mentioned do exist, in the form of the actual expenses incurred by ICANN in the 2012-round. And considering the gains of scale foreseen by aggregating technical evaluation per back-end, with or without RSP program, the actual cost for further rounds is clearly expected to be lower. DA: I agree that there is data available from 2012 that could be helpful to our discussion and to that end, we should ask Trang if she can provide an overview of the costs associated with the 2012 round, but we would need to define the cost parameters. I agree that an RSP program could reduce the costs associated with the technical evaluation, but current discussions suggest that the technical evaluation could still occur during the application process. But we could adopt something in between specifying a new application fee and the reimbursement idea, like this: - Application fee will be no less than 50% of the 2012-round fee, and designed to be of a cost-recovery target; in the event it generates more surplus than expected, the reimbursement will be available either as credit towards registry fees for successful applicants or reimbursement for non-approved or drop-out applicants. DA: I have no objection to the concept, but 50% seems to be a large reduction in terms of fairness and competition for 2012 applicants, but I accept your note below that 2012 applicants will have a time-to-market advantage over future entrants. Any number we come up will largely be arbitrary at this point so the challenge is to come up with a reasoned rationale. We should also look for options to address Vanda’s point about not making the upfront fee too prohibitive, or finding a mechanism that would allow applicants from underserved regions to pay post-evaluation. This would become complicated where there is contention for the string, but if there was no competition for the string then perhaps this would be a little easier. It’s also important to decide whether the application fee would change over time. I must admit that when I was thinking about this, it was only from the perspective of the next application window and not beyond that. It would be fair to assume that a lot of the setup costs for the next application window will not be repeated for processes beyond that, particularly as it relates to infrastructure or software development. The outcome of the rounds v first-come-first-serve discussion will be important to this one. One issue to calculate the reimbursement is how much does the legal reserves need to be; the 2012-round proved that litigation either thru internal accountability or legal courts will happen, but how much ? If someone from the work track, or someone from ICANN Board risk committee, could provide an actuary's point of view would be interesting. DA: Agree that a % of the application fee should be set aside for legal reserves, on the condition that the reserves are set aside for a designated period of time. We should note that 2012-round applicants got a 4 to 6 years time-to-market advantage, and that could be worth much more than the application fee difference. Rubens On Aug 4, 2017, at 7:13 PM, Austin, Donna via Gnso-newgtld-wg-wt1 <gnso-newgtld-wg-wt1@icann.org<mailto:gnso-newgtld-wg-wt1@icann.org>> wrote: Hi Sara, all I’ve had a look at the responses to the CC2 responses as they relate to Application Fees and believe that the responses are largely consistent with the discussions we have already had within the working group on this topic. My rudimentary analysis of the comments suggest the following: Based on the CC2 responses it would appear that most of the respondents support the principle of an application fee that is cost neutral or break even, which is consistent with the cost-recovery model that was developed for the 2012 round. However, many of the responses acknowledge that the assumptions of the 2012 round was off the mark because the number of applications exceeded expectations and resulted in a considerable surplus of funds (approximately $100M). It would appear from the responses that there is little support for maintaining the $185,000 application fee into the future, with many responses suggesting a reduction, with the exception of John Poole who recommended that each applicant require a $1m deposit. However, there was support for the principle that the application fee should maintain a bar sufficient to ensure that applications are worth dedicating resources to evaluation and processing; and fees should not be too low as to be detrimental to security and stability and competition between rounds. It would also appear that there is support for the WG providing direction on the use of excess funds, in the event that future rounds result in a surplus of funds. Some suggested considerations for moving this conversation forward: • While it appears that there is consensus around the concept of an application that achieves the principle of cost-recovery, it is impossible for this group to come up with an actual number for any future round because we have no way to predict how many applications there will be. • The number of applications for a future application window will depend on a range of factors, including the amount of the application fee. • We could ask ICANN to provide estimates for costs associated with preparing for the next application window, but I don’t believe we are far along in deciding some of the core issues to provide them with enough guidance on which to base any estimates or predictions. • What we do have from the 2012 application round is an application fee of $185,000 that resulted in 1930 applications—some 1400 more than was predicted. The policy for the WG could potentially be something along the lines of: • The application fee should be based on the principle of cost recovery. • Based on the principles of fairness and competition to 2012 new gTLD applications, $185,000 will be the application fee for any future application window. • In the event of surplus application fees, ICANN will provide all applicants (successful/unsuccessful?) with a reimbursement of an equal share of the surplus application fees; or • In the event of surplus applications fees, ICANN will provide all applicants a reimbursement up to an amount of $50,000/$80,000/$100,000 (successful applicants may choose this reimbursement as a contribution to ICANN’s annual fee); and • The remainder of the surplus application fees will be used to support ICANN’s efforts in Universal Awareness and Universal Acceptance (or some other designated activity) Some exemptions/exceptions: • Applications from underserved regions would/could (depending on the policy) have the application fee waived so that it is not considered a barrier to entry. • There may be other exclusions or exemptions from the application fee that could be developed to remove other possible barriers to entry perceived by some as being too high. Rationale: • We have a principle of cost recovery, but rather than requiring complex economic modelling (or somebody’s best guess) to arrive at the amount of the application fee, we achieve the principle in an order of reverse by providing a reimbursement of a portion of the application fee equal to the distribution of excess funds. I don’t believe we can solve this problem absent a considerable amount of data that at this point in time simply doesn’t exist, so I offer this as a possible way to enable us to move forward and certainly to encourage discussion. Donna From: gnso-newgtld-wg-wt1-bounces@icann.org<mailto:gnso-newgtld-wg-wt1-bounces@icann.org> [mailto:gnso-newgtld-wg-wt1-bounces@icann.org] On Behalf Of Sara Bockey Sent: Thursday, August 03, 2017 9:31 AM To: gnso-newgtld-wg-wt1@icann.org<mailto:gnso-newgtld-wg-wt1@icann.org> Subject: [EXTERNAL] [Gnso-newgtld-wg-wt1] Work Track 1 Agenda for 8 August 2017 @ 3:00 UTC Dear All, The next call for the New gTLD Subsequent Procedures Sub Team – Track 1 - Overall Process/Support/Outreach Issue will take place on Tuesday, 8 August 2017 at 3:00 UTC. The proposed agenda is as follows: 1. Welcome & Agenda Overview 2. SOIs 3. Review of CC2 responses to WT1 questions * Application Fees * Systems 1. AOB The CC2 responses we will be covering may be review in the google document: https://docs.google.com/spreadsheets/d/1427pgTCkguOj2NZZzMnz_H_lPe54dtvUErSJd9uhkZw/edit#gid=1442059046<https://urldefense.proofpoint.com/v2/url?u=https-3A__docs.google.com_spreadsheets_d_1427pgTCkguOj2NZZzMnz-5FH-5FlPe54dtvUErSJd9uhkZw_edit-23gid-3D1442059046&d=DwMGaQ&c=MOptNlVtIETeDALC_lULrw&r=CwipU91YB6EkpFXK9ynnT_QUef4yC5p7jpsDm8cU97g&m=KxXpBeMo6gbRQ-BqdZ0TqFv_TRF2rGQiCdN-DB_qN84&s=4vy3M-5mmpfeBvqqyXWRPSI-t6ZrUwBiYzDw4G8yxqQ&e=>. Chat soon! Sara sara bockey policy manager | GoDaddy™ sbockey@godaddy.com<mailto:sbockey@godaddy.com> 480-366-3616 skype: sbockey This email message and any attachments hereto is intended for use only by the addressee(s) named herein and may contain confidential information. If you have received this email in error, please immediately notify the sender and permanently delete the original and any copy of this message and its attachments. _______________________________________________ Gnso-newgtld-wg-wt1 mailing list Gnso-newgtld-wg-wt1@icann.org<mailto:Gnso-newgtld-wg-wt1@icann.org> https://mm.icann.org/mailman/listinfo/gnso-newgtld-wg-wt1<https://urldefense.proofpoint.com/v2/url?u=https-3A__mm.icann.org_mailman_listinfo_gnso-2Dnewgtld-2Dwg-2Dwt1&d=DwMFaQ&c=MOptNlVtIETeDALC_lULrw&r=CwipU91YB6EkpFXK9ynnT_QUef4yC5p7jpsDm8cU97g&m=Bdo0YPBPXCMV4oPzXW_8oGk9gquzou0maBmme5RbyNA&s=p4hxlu8rLGQN6CfZQEb5ZXdfFayWwy9qK6ooinj_0PQ&e=>

Chapter 8 of ICANN’s Program Implementation Review<https://www.icann.org/en/system/files/files/program-review-29jan16-en.pdf> is also relevant. https://www.icann.org/news/announcement-2016-01-29-en From: Steve Chan [mailto:steve.chan@icann.org] Sent: Tuesday, August 08, 2017 10:05 AM To: Jim Prendergast <jim@GALWAYSG.COM>; Ashley Roberts <ashley.roberts@valideus.com>; Austin, Donna <Donna.Austin@team.neustar>; Rubens Kuhl <rubensk@nic.br>; vanda@scartezini.org Cc: gnso-newgtld-wg-wt1@icann.org Subject: Re: [Gnso-newgtld-wg-wt1] [EXTERNAL] Work Track 1 Agenda for 8 August 2017 @ 3:00 UTC Dear Jim, all, You may recall that in 2008, ICANN performed an analysis of the cost considerations of the new gTLD program (and later updated in 2009), which discussed the historical/development costs (available here: https://archive.icann.org/en/topics/new-gtlds/cost-considerations-04oct09-en...). See section 3.1 of the paper, where it provides a summary of the development costs. It also discusses the appropriate starting point for accruing costs. Hopefully this is helpful, at least as a starting point. Best, Steve From: <gnso-newgtld-wg-wt1-bounces@icann.org<mailto:gnso-newgtld-wg-wt1-bounces@icann.org>> on behalf of Jim Prendergast <jim@GALWAYSG.COM<mailto:jim@GALWAYSG.COM>> Date: Tuesday, August 8, 2017 at 9:51 AM To: Ashley Roberts <ashley.roberts@valideus.com<mailto:ashley.roberts@valideus.com>>, "Austin, Donna" <Donna.Austin@team.neustar<mailto:Donna.Austin@team.neustar>>, Rubens Kuhl <rubensk@nic.br<mailto:rubensk@nic.br>>, "vanda@scartezini.org<mailto:vanda@scartezini.org>" <vanda@scartezini.org<mailto:vanda@scartezini.org>> Cc: "gnso-newgtld-wg-wt1@icann.org<mailto:gnso-newgtld-wg-wt1@icann.org>" <gnso-newgtld-wg-wt1@icann.org<mailto:gnso-newgtld-wg-wt1@icann.org>> Subject: Re: [Gnso-newgtld-wg-wt1] [EXTERNAL] Work Track 1 Agenda for 8 August 2017 @ 3:00 UTC To Ashely’s last point and something I mentioned on the call last night. Is it possible to get from the Finance team at ICANN an accounting of everything that went into the “historical costs” to help us assess what might feed into a “cost recovery model” for this next process? Thanks Jim Prendergast The Galway Strategy Group +1 202 285 3699 @jimpren From: gnso-newgtld-wg-wt1-bounces@icann.org<mailto:gnso-newgtld-wg-wt1-bounces@icann.org> [mailto:gnso-newgtld-wg-wt1-bounces@icann.org] On Behalf Of Ashley Roberts Sent: Tuesday, August 08, 2017 12:45 PM To: Austin, Donna <Donna.Austin@team.neustar<mailto:Donna.Austin@team.neustar>>; Rubens Kuhl <rubensk@nic.br<mailto:rubensk@nic.br>>; vanda@scartezini.org<mailto:vanda@scartezini.org> Cc: gnso-newgtld-wg-wt1@icann.org<mailto:gnso-newgtld-wg-wt1@icann.org> Subject: Re: [Gnso-newgtld-wg-wt1] [EXTERNAL] Work Track 1 Agenda for 8 August 2017 @ 3:00 UTC Hi Donna, Thanks for getting the ball rolling on this. I agree that the general trend from the CC2 comments and from our work track seems to support application fees being based on cost recovery. I also agree that the CC2 comments don’t seem to support maintaining the fee of $185,000, so I don’t think we should be making a recommendation for a fee of $185,000 for future application windows. Aside from the CC2 comments not seeming to support such a fee, the fact that there was such a large fee surplus from the 2012 round ($96 mil) coupled with the likelihood of improved efficiencies in the evaluation process (e.g. through aggregating back-end evaluation, as Rubens pointed out, and lower development costs, etc.) suggests a cost-recovery based estimate would be lower than $185,000. I also agree with Rubens that we don’t need to tie ourselves to the same fee out of a concern over competition and fairness. The first mover advantage for 2012 applicants was significant (as much as 4 years and counting), plus I don’t think anything in the original policy suggested the fee couldn’t or wouldn’t change in future rounds. While we are probably not currently in a position to put forward a specific amount for the fee, we could recommend that ICANN carry out a fresh cost estimate based upon parameters that we could help define, and upon the information they have from the 2012 costs. Thanks, Ashley Ashley Roberts Senior Manager | Valideus Ltd E: ashley.roberts@valideus.com<mailto:ashley.roberts@valideus.com> D: +44 20 7421 8264 Liability cannot be accepted for statements made which are clearly the sender’s own and not made on behalf of Valideus. This message is intended solely for the addressee and may contain confidential information. If you have received this message in error, please send it back to us, and immediately and permanently delete it. Do not use, copy or disclose the information contained in this message or in any attachment. Valideus Ltd is registered in England and Wales with company number 06181291 and VAT number 987 7551 49. Our registered office is at 28-30 Little Russell Street, London, WC1A 2HN. From: gnso-newgtld-wg-wt1-bounces@icann.org<mailto:gnso-newgtld-wg-wt1-bounces@icann.org> [mailto:gnso-newgtld-wg-wt1-bounces@icann.org] On Behalf Of Austin, Donna via Gnso-newgtld-wg-wt1 Sent: 07 August 2017 19:10 To: Rubens Kuhl <rubensk@nic.br<mailto:rubensk@nic.br>>; vanda@scartezini.org<mailto:vanda@scartezini.org> Cc: gnso-newgtld-wg-wt1@icann.org<mailto:gnso-newgtld-wg-wt1@icann.org> Subject: Re: [Gnso-newgtld-wg-wt1] [EXTERNAL] Work Track 1 Agenda for 8 August 2017 @ 3:00 UTC Hi Rubens and Vanda, comments inline below. From: Rubens Kuhl [mailto:rubensk@nic.br] Sent: Sunday, August 06, 2017 3:23 PM To: Austin, Donna <Donna.Austin@team.neustar<mailto:Donna.Austin@team.neustar>> Cc: Sara Bockey <sbockey@godaddy.com<mailto:sbockey@godaddy.com>>; gnso-newgtld-wg-wt1@icann.org<mailto:gnso-newgtld-wg-wt1@icann.org> Subject: Re: [Gnso-newgtld-wg-wt1] [EXTERNAL] Work Track 1 Agenda for 8 August 2017 @ 3:00 UTC Donna, I believe the data points you mentioned do exist, in the form of the actual expenses incurred by ICANN in the 2012-round. And considering the gains of scale foreseen by aggregating technical evaluation per back-end, with or without RSP program, the actual cost for further rounds is clearly expected to be lower. DA: I agree that there is data available from 2012 that could be helpful to our discussion and to that end, we should ask Trang if she can provide an overview of the costs associated with the 2012 round, but we would need to define the cost parameters. I agree that an RSP program could reduce the costs associated with the technical evaluation, but current discussions suggest that the technical evaluation could still occur during the application process. But we could adopt something in between specifying a new application fee and the reimbursement idea, like this: - Application fee will be no less than 50% of the 2012-round fee, and designed to be of a cost-recovery target; in the event it generates more surplus than expected, the reimbursement will be available either as credit towards registry fees for successful applicants or reimbursement for non-approved or drop-out applicants. DA: I have no objection to the concept, but 50% seems to be a large reduction in terms of fairness and competition for 2012 applicants, but I accept your note below that 2012 applicants will have a time-to-market advantage over future entrants. Any number we come up will largely be arbitrary at this point so the challenge is to come up with a reasoned rationale. We should also look for options to address Vanda’s point about not making the upfront fee too prohibitive, or finding a mechanism that would allow applicants from underserved regions to pay post-evaluation. This would become complicated where there is contention for the string, but if there was no competition for the string then perhaps this would be a little easier. It’s also important to decide whether the application fee would change over time. I must admit that when I was thinking about this, it was only from the perspective of the next application window and not beyond that. It would be fair to assume that a lot of the setup costs for the next application window will not be repeated for processes beyond that, particularly as it relates to infrastructure or software development. The outcome of the rounds v first-come-first-serve discussion will be important to this one. One issue to calculate the reimbursement is how much does the legal reserves need to be; the 2012-round proved that litigation either thru internal accountability or legal courts will happen, but how much ? If someone from the work track, or someone from ICANN Board risk committee, could provide an actuary's point of view would be interesting. DA: Agree that a % of the application fee should be set aside for legal reserves, on the condition that the reserves are set aside for a designated period of time. We should note that 2012-round applicants got a 4 to 6 years time-to-market advantage, and that could be worth much more than the application fee difference. Rubens On Aug 4, 2017, at 7:13 PM, Austin, Donna via Gnso-newgtld-wg-wt1 <gnso-newgtld-wg-wt1@icann.org<mailto:gnso-newgtld-wg-wt1@icann.org>> wrote: Hi Sara, all I’ve had a look at the responses to the CC2 responses as they relate to Application Fees and believe that the responses are largely consistent with the discussions we have already had within the working group on this topic. My rudimentary analysis of the comments suggest the following: Based on the CC2 responses it would appear that most of the respondents support the principle of an application fee that is cost neutral or break even, which is consistent with the cost-recovery model that was developed for the 2012 round. However, many of the responses acknowledge that the assumptions of the 2012 round was off the mark because the number of applications exceeded expectations and resulted in a considerable surplus of funds (approximately $100M). It would appear from the responses that there is little support for maintaining the $185,000 application fee into the future, with many responses suggesting a reduction, with the exception of John Poole who recommended that each applicant require a $1m deposit. However, there was support for the principle that the application fee should maintain a bar sufficient to ensure that applications are worth dedicating resources to evaluation and processing; and fees should not be too low as to be detrimental to security and stability and competition between rounds. It would also appear that there is support for the WG providing direction on the use of excess funds, in the event that future rounds result in a surplus of funds. Some suggested considerations for moving this conversation forward: • While it appears that there is consensus around the concept of an application that achieves the principle of cost-recovery, it is impossible for this group to come up with an actual number for any future round because we have no way to predict how many applications there will be. • The number of applications for a future application window will depend on a range of factors, including the amount of the application fee. • We could ask ICANN to provide estimates for costs associated with preparing for the next application window, but I don’t believe we are far along in deciding some of the core issues to provide them with enough guidance on which to base any estimates or predictions. • What we do have from the 2012 application round is an application fee of $185,000 that resulted in 1930 applications—some 1400 more than was predicted. The policy for the WG could potentially be something along the lines of: • The application fee should be based on the principle of cost recovery. • Based on the principles of fairness and competition to 2012 new gTLD applications, $185,000 will be the application fee for any future application window. • In the event of surplus application fees, ICANN will provide all applicants (successful/unsuccessful?) with a reimbursement of an equal share of the surplus application fees; or • In the event of surplus applications fees, ICANN will provide all applicants a reimbursement up to an amount of $50,000/$80,000/$100,000 (successful applicants may choose this reimbursement as a contribution to ICANN’s annual fee); and • The remainder of the surplus application fees will be used to support ICANN’s efforts in Universal Awareness and Universal Acceptance (or some other designated activity) Some exemptions/exceptions: • Applications from underserved regions would/could (depending on the policy) have the application fee waived so that it is not considered a barrier to entry. • There may be other exclusions or exemptions from the application fee that could be developed to remove other possible barriers to entry perceived by some as being too high. Rationale: • We have a principle of cost recovery, but rather than requiring complex economic modelling (or somebody’s best guess) to arrive at the amount of the application fee, we achieve the principle in an order of reverse by providing a reimbursement of a portion of the application fee equal to the distribution of excess funds. I don’t believe we can solve this problem absent a considerable amount of data that at this point in time simply doesn’t exist, so I offer this as a possible way to enable us to move forward and certainly to encourage discussion. Donna From: gnso-newgtld-wg-wt1-bounces@icann.org<mailto:gnso-newgtld-wg-wt1-bounces@icann.org> [mailto:gnso-newgtld-wg-wt1-bounces@icann.org] On Behalf Of Sara Bockey Sent: Thursday, August 03, 2017 9:31 AM To: gnso-newgtld-wg-wt1@icann.org<mailto:gnso-newgtld-wg-wt1@icann.org> Subject: [EXTERNAL] [Gnso-newgtld-wg-wt1] Work Track 1 Agenda for 8 August 2017 @ 3:00 UTC Dear All, The next call for the New gTLD Subsequent Procedures Sub Team – Track 1 - Overall Process/Support/Outreach Issue will take place on Tuesday, 8 August 2017 at 3:00 UTC. The proposed agenda is as follows: 1. Welcome & Agenda Overview 2. SOIs 3. Review of CC2 responses to WT1 questions * Application Fees * Systems 1. AOB The CC2 responses we will be covering may be review in the google document: https://docs.google.com/spreadsheets/d/1427pgTCkguOj2NZZzMnz_H_lPe54dtvUErSJd9uhkZw/edit#gid=1442059046<https://urldefense.proofpoint.com/v2/url?u=https-3A__docs.google.com_spreadsheets_d_1427pgTCkguOj2NZZzMnz-5FH-5FlPe54dtvUErSJd9uhkZw_edit-23gid-3D1442059046&d=DwMGaQ&c=MOptNlVtIETeDALC_lULrw&r=CwipU91YB6EkpFXK9ynnT_QUef4yC5p7jpsDm8cU97g&m=KxXpBeMo6gbRQ-BqdZ0TqFv_TRF2rGQiCdN-DB_qN84&s=4vy3M-5mmpfeBvqqyXWRPSI-t6ZrUwBiYzDw4G8yxqQ&e=>. Chat soon! Sara sara bockey policy manager | GoDaddy™ sbockey@godaddy.com<mailto:sbockey@godaddy.com> 480-366-3616 skype: sbockey This email message and any attachments hereto is intended for use only by the addressee(s) named herein and may contain confidential information. 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