January 2018 - Gnso-newgtld-wg-wt4

ICANN Org Response to WT4 CQ Data Request
by Steve Chan Jan. 31, 2018

Jan. 31, 2018

Dear WT4 Members, In response to a request made from Work Track 4 to obtain information related to clarifying questions (CQs), please see the attached response from ICANN Org. The response focuses on providing various options to address WT4’s request and then also providing an assessment of feasibility from ICANN Org’s perspective. If you have any questions, concerns, or wish to discuss any of these options in further detail with ICANN Org, please let us know. The attached response is available on the Wiki for the specific topic here https://community.icann.org/x/YT2AAw and on the WG’s correspondence page here https://community.icann.org/x/3B5yB. Best, Steve Steven Chan  Policy Director, GNSO Support ICANN 12025 Waterfront Drive, Suite 300 Los Angeles, CA 90094-2536  steve.chan(a)icann.org mobile: +1.310.339.4410 office tel: +1.310.301.5800 office fax: +1.310.823.8649 Find out more about the GNSO by taking our interactive courses and visiting the GNSO Newcomer pages. Follow @GNSO on Twitter: https://twitter.com/ICANN_GNSO Follow the GNSO on Facebook: https://www.facebook.com/icanngnso/ http://gnso.icann.org/en/

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Re: [Gnso-newgtld-wg-wt4] Registry Services straw-person
by Aikman-Scalese, Anne Jan. 22, 2018

Jan. 22, 2018

Rubens, Please excuse the delay in my reply as I have been traveling. I do not understand why you would require that I duplicate effort at a later stage of the subgroup’s deliberations. The call was characterized as a “rough consensus” call and the slides state “Consensus Re” throughout. There were no objections on the call to the language I suggested and Kurt supported one change very vocally. Cheryl specifically asked for suggested language changes during the call and these were provided in chat. In order for the work of the Subgroup to be “up to date” and to clearly present the issues discussed, I must request once again that the slides be revised in accordance with the call transcript and that the most current work product of the group be posted to the wiki. Hopefully this third written request will not be ignored by Leadership. Anne Anne E. Aikman-Scalese Of Counsel 520.629.4428 office 520.879.4725 fax AAikman(a)lrrc.com<mailto:AAikman@lrrc.com> _____________________________ [cid:image003.png@01D379AB.E391AD60] Lewis Roca Rothgerber Christie LLP One South Church Avenue, Suite 700 Tucson, Arizona 85701-1611 lrrc.com<http://lrrc.com/> From: Rubens Kuhl [mailto:rubensk@nic.br] Sent: Wednesday, December 13, 2017 2:22 PM To: Aikman-Scalese, Anne Cc: Cheryl Langdon-Orr; gnso-newgtld-wg-wt4(a)icann.org Subject: Re: [Gnso-newgtld-wg-wt4] Registry Services straw-person Importance: High Anne, Since your request was directed to WG co-chairs I can't answer on it specifically, but regardless of what happens regarding the meeting #21 slides, I suggest that you table the changes you meant for specific topics for meetings that happen in the future so these positions have consideration at some point, and they are either incorporated into proposed languages or considered but not incorporated. When we have meetings for those topics I doubt people will look at the slide archive, but they will definitely join the call, listen to recording or read transcripts. Rubens Em 13 de dez de 2017, à(s) 16:25:000, Aikman-Scalese, Anne <AAikman(a)lrrc.com<mailto:AAikman@lrrc.com>> escreveu: Cheryl and Jeff, Rubens says there will be no changes to the slides even though I was asked during the call to suggest language and even though the understanding was changes would be made to the slides since the items were noted as “consensus re”. I must strongly object to Rubens’ refusal to revise the slides in accordance with the transcript from the call, including Kurt Pritz’ very vocal support for one of the changes and no objections from others to the other requested changes. As written, the slides are not reflective of the last call. If Rubens refuses to revise the slides, then please ask staff to do so based on the language that was typed into chat and agreed in the recording. Thank you, Anne Anne E. Aikman-Scalese Of Counsel 520.629.4428 office 520.879.4725 fax AAikman(a)lrrc.com<mailto:AAikman@lrrc.com> _____________________________ <image003.png> Lewis Roca Rothgerber Christie LLP One South Church Avenue, Suite 700 Tucson, Arizona 85701-1611 lrrc.com<http://lrrc.com/> From: Rubens Kuhl [mailto:rubensk@nic.br] Sent: Tuesday, December 12, 2017 5:33 PM To: Aikman-Scalese, Anne Cc: Cheryl Langdon-Orr; gnso-newgtld-wg-wt4(a)icann.org<mailto:gnso-newgtld-wg-wt4@icann.org> Subject: Re: [Gnso-newgtld-wg-wt4] Registry Services straw-person Importance: High On 12 Dec 2017, at 20:31, Aikman-Scalese, Anne <AAikman(a)lrrc.com<mailto:AAikman@lrrc.com>> wrote: Cheryl and Rubens, There were consistent references to “rough consensus” in the discussion during this meeting. As was mentioned right when the meeting started, it wasn't a meeting to decide anything, so no any mention was a reference to previous meetings when decisions were made. In addition, there were several changes to the slides which were recommended and agreed. These changes do not appear in the slides at this time. When may we expect them? We won't rewrite history and pretend something different than actually presented had happened. It was a recap, so anything that might require change has to be decided during meetings that actually decide any of the topics where you can suggest changes to actual decisions. Rubens ________________________________ This message and any attachments are intended only for the use of the individual or entity to which they are addressed. If the reader of this message or an attachment is not the intended recipient or the employee or agent responsible for delivering the message or attachment to the intended recipient you are hereby notified that any dissemination, distribution or copying of this message or any attachment is strictly prohibited. If you have received this communication in error, please notify us immediately by replying to the sender. The information transmitted in this message and any attachments may be privileged, is intended only for the personal and confidential use of the intended recipients, and is covered by the Electronic Communications Privacy Act, 18 U.S.C. §2510-2521. ________________________________ This message and any attachments are intended only for the use of the individual or entity to which they are addressed. If the reader of this message or an attachment is not the intended recipient or the employee or agent responsible for delivering the message or attachment to the intended recipient you are hereby notified that any dissemination, distribution or copying of this message or any attachment is strictly prohibited. If you have received this communication in error, please notify us immediately by replying to the sender. The information transmitted in this message and any attachments may be privileged, is intended only for the personal and confidential use of the intended recipients, and is covered by the Electronic Communications Privacy Act, 18 U.S.C. §2510-2521.

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Recordings, attendance & AC chat from New gTLD Subsequent Procedures Sub Team Track 4 IDNs/Technical & Operations call on Thursday, 11 January 2018
by Michelle DeSmyter Jan. 11, 2018

Jan. 11, 2018

Dear All, Please find the attendance, AC Chat and recording of the call attached to this email. The Adobe Connect recording is below for the New gTLD Subsequent Procedures Sub Team - Track 4 - IDNs/Technical & Operations call held on Thursday, 11 January 2018 at 15:00 UTC. Mp3: https://audio.icann.org/gnso/gnso-new-gtld-subsequent-track4-11jan18-en.mp3 <https://audio.icann.org/gnso/gnso-new-gtld-subsequent-track4-11jan18-en.mp3> Adobe Connect recording: https://participate.icann.org/p117x1m54kr/ The recordings of the calls are posted on the GNSO Master Calendar page:http://gnso.icann.org/en/group-activities/calendar ** Please let me know if your name has been left off the list ** Mailing list archives: http://mm.icann.org/pipermail/gnso-newgtld-wg-wt4 Agenda Wiki page: https://community.icann.org/x/cx1yB Thank you. Kind regards, Michelle

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Notes and Action Items: New gTLD Subsequent Procedures PDP WG - Track 4 - 11 January 2018
by Julie Hedlund Jan. 11, 2018

Jan. 11, 2018

Dear Work Track members, Please see below the action items and notes from the meeting today. These high-level notes are designed to help WG members navigate through the content of the call and are not a substitute for the recording or transcript. See the chat transcript and recording at: https://community.icann.org/x/ERohB. Slides are attached for reference and some chat room excerpts are included below. Kind regards, Julie Julie Hedlund, Policy Director ---------------------------------------------------------------------------------------- Notes and Action Items: New gTLD Subsequent Procedures PDP WG - Track 4 – 11 January 2018 Action Item: Continue the discussion on the Financial Evaluation Straw Models on the list. Notes: 1. SOI Updates: No updates. 2. Review of Financial Evaluation Straw Models Slide 5: Background on Where We Are -- Recommendation 8: Applicants must be able to demonstrate their financial and organizational operational capability. -- 90% of applications received Clarifying Questions (costs, funding/revenue, and especially COI). -- Can financial capabilities be determined in a better way. Four Different Models: Slide 6: Straw Mushin -- COI discussion @WT2; once WT2 defines how this registrant protection plays out, WT4 or the full WG can go back to address it. Slide 7: Straw Mushin Draft Language -- Applicant will certify funding. -- ICANN Org will provide sample financial spreadsheets. -- ICANN Org will provide non-exhaustive list before application process. -- Self-certification process Slide 8: Straw Bee -- Compromise model would be to ask for financial statements bu not for a financial model. Slide 9: Straw Bee Draft Language -- Applicant will certify funding. -- ICANN Org will provide sample financial spreadsheets. -- Financial documentation such as spreadsheets will be requested. Slide 10: Straw Beetle -- Possibility of third-party certification. -- What else would make an evaluation model simpler than 2012 but still good enough? Slide 11: Straw Beetle Draft Language -- Applicant will obtain credible third-party certification. -- ICANN Org will provide sample financial spreadsheets. -- Financial document such as statements will be provided. Slide 12: Financial Evaluation Depth -- Financial statement does not usually extend beyond a 1-year timeframe. -- 2012-round registries revenues are less that projected, while costs are higher than projected. -- For Open TLDs there was an increased level of supply without an associated increase in demand. -- 2012-round applicants had no comparable data to establish projects and evaluators to pass judgment on them. -- We have had at least 1 finanical failure -- .wed -- which defaulted on RSP payments, causing the first EBERO transition. Slide 13: Straw Cookie Monster -- Two different templates -- 1) no expectation of revenue; 2) projected revenue endorsed by auditor. -- Stress-test tools. -- Consolidated view of multiple applications. -- Planning for when revenue goals aren't met, exceeding expenses, or funding shortfalls. -- Checks to make sure all direct expenses are foreseen. Slide 14: Models Decision Tree -- If a stricter financial evaluation model is to be applied, Straw Cookie Monsters is the only one satisfying this criteria. -- Among the 3 simpler models Straw Mushin is the only one with no financial evaluation. -- Between the 2 remaining models -- Straw Bee and Straw Beetle -- are very similar, but differ on whether applicants self-certify or obtain third-party certification. Discussion: -- On slides where it says that ICANN Org will provide sample spreadsheets -- that seems impossible. Could provide sample registry costs. -- Could simplify by dividing applicants into two categories: 1) ongoing/operating for years 2) start ups. -- Was there a post-mortem report from the evaluators? -- ICANN Org providing business models was kind of a wreck. Bifurcation could be good, such as public versus non-public. Should get some kind of financial report from a reputable accounting firm. -- Wonder if we might want to look at the bifurcation aspect in two ways: Startup versus non-startup may also be between public/listed and non-public. -- On ICANN Org providing financial spreadsheets, this would be only a model spreadsheet for calculations. -- On startups, sometimes companies' financials are in the red to start with, but they could still operate registries. -- On the Financial Evaluation improvement, most people agree that the model should be changed. Passing or failing an evaluation didn't correlate with whether a company could operate a registry. -- We need to distinguish between checking for financial fitness rather than likely financial success or business models. Financial fitness should have strict criteria, such as by certification by a third party. ICANN shouldn't be evaluating business models. -- Nobody used the model they provided to ICANN since costs changed. Not a lot of value in using models that are not applicable or sharing them. -- Add a placeholder about the cost of EBERO and also the letter of credit. -- Slide 11: Straw Beetle -- second paragraph -- not in favor of ICANN Org providing spreadsheets of common models. Take out that notion, but in order to get that third-party certification the applicant would need to provide information on what it intended to do with its TLD, including whether it would be open or closed. -- The Co-Chairs are trying to work with ICANN staff to try to get information on the Clarifying Questions to help us to revise the questions on the application form to avoid have so many Clarifying Questions in the future. The information is stored by ICANN but not in a way where it would be easy to extract that information. Quite expensive to get the information. Would need to get permission from the applicants to release even the questions that were asked and this was denied. >From the chat: Cheryl Langdon-Orr 2: so review the Financial Criteria run two (1) *types* of 'processes' on that is more suitable for start ups and the other for "going concerns" Noted Kurt Phil Buckingham: I would envisage a different type of financial evalaution/ due diligence for each different type of "category " - to be defined Steve Chan: The GDD's Program Implementation Review Report suggested that a 3rd party Steve Chan: And the report also acknowledges the challenges of reviewing each applications individually. Donna Austin, Neustar: @Steve, does it have to be an independent 3rd party certification or can that be provided by the applicants accountants?certification should be explored. You can see this mentioned first on page 86: https://www.icann.org/en/system/files/files/program-review-29jan16-en.pdf Christopher Wilkinson: Agree with Kurt and Jeff. Some financial data is necessary. We need measures that do not discriminate agaoinst start-ups. Steve Chan: @Donna, I don't believe that suggestion from GDD was intended to be prescriptive. Rather, it's an idea to be explored. Cheryl Langdon-Orr 2: Yes Steve one of the advantages we would no doubt see with any changes made to Finanical Eval in the future *should* be an aim to lower the time and other challenges caused by individual evaluations approach Anne Aikman-Scalese (IPC): If the Applicant's Chief Financial Officer certifies the financial statements and is somehow subject to professional discipline in his/her country of practice, then that would be a good check on the numbers. Cheryl Langdon-Orr 2: And the "Can" provide funding (as oopssed to having it "in the bank" may apply to some starte ups as well as entities alreadt 'trading' Jeff Neuman: I would not be in favor of ICANN providing cost models of registries even as templates. They do not have the experience or expertise to do this. Kurt Pritz: One of my oints is that there is someone sitting at KPMG or E&Y, having evaluated 1000 applications, thinking, "I know how to make that process half as onerous and just as (or more) effective." Have we asked them? Maxim Alzoba(FAITID): @Jeff, +1 Jeff Neuman: ICANN tried to do it for the last round and because of other unrelated issues, it was a disaster Jeff Neuman: and way off Jeff Neuman: Thus the proposed business models were WAY off by a huge factor Phil Buckingham: totally agree Jeff . Jeff Neuman: We need to accept the fact that there will be business failures of registries...that is ok Jeff Neuman: But that does not mean we should turn a blind eye if we see warning signes during the application process that a registry will not be succesful Jeff Neuman: [All of this is my personal opinion] Anne Aikman-Scalese (IPC): @Maxim - thank you - I just meant in the "real world", would professional accounting firms evaluate non-profits' financial stability in the same manner. @jeff - should we consider some contracts that are shorter than ten years in order to decrease barriers to entry and risk taking? Maxim Alzoba(FAITID): de we know the real EBERO costs for .wed? Jeff Neuman: @Anne - a shorter term contract with ICANN could have the opposite effect that we want; namely, it could become tougher for registries to get the funding that they need if investors believe that they will not have a lng enough time to recoup their investment Jeff Neuman: So, I would not be in favor of shorter terms. Jeff Neuman: @Maxim - that is a good question. Anne Aikman-Scalese (IPC): OK understood Maxim Alzoba(FAITID): but some brand might use franchise with paid registrations, for example (for it's business partners) Maxim Alzoba(FAITID): @Jeff, answer to that will change lots of things (including amounts on COI) Jeff Neuman: I do agree that there should be separate criteria for registries dependent on selling third party registrations and those that intend to use registries internally. I am purposely not using terms like open and brand as I think that is too limiting Jeff Neuman: But the separate crietria should be for evaluating financial fitness NOT for evaluating models Phil Buckingham: Agreed Jeff , there should no evaluation of the business model . Forecasts are meaningless two years out. Rubens Kuhl: ICANN established RAA 2013 requirement after application, and that invalidated all business models proposed. Anne Aikman-Scalese (IPC): I hope we do not lose Kurt's point that there are financial professionals who would be best equipped to help develop the litmus tests we need. As Jeff points out, ICANN does not have and should not be expected to have the expertise to put forth these models. Phil Buckingham: Agreed Jeff - by its very nature every single business model is different . We cant standardise any model Jeff Neuman: And every model changes. Those that launched 3 or 4 years after they applied went through lots of changes between application time and lauch time Rubens Kuhl: Start-up lingo for those changes is "pivoting" Phil Buckingham: exactly Cheryl , the overidding requirement here is innovation. Jeff Neuman: @Cheryl - true. But organizations had 3 or 4 years of ICANN csused delay during which time staff had to be maintained, resources kept, etc. THose costs cannot be ignored Jeff Neuman: and the many years delay / costs directly resulted in business models changing to recoup (or attempt to recoup) those costs Maxim Alzoba(FAITID): REgistries are not in business of supporting models, just DNS services Jeff Neuman: @Marttin - yes that is part of it...that it only focused on what ICANN considered critical functions was an issue as well. Phil Buckingham: We need to go much further than the straw cookie monster . Anne Aikman-Scalese (IPC): I think it is important to note that ICANN's internal review suggested third party certification per Steve's reference to page 86 of that review. Will try to reread that later today.

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WT4 Agenda and Reading Materials
by Rubens Kuhl Jan. 10, 2018

Jan. 10, 2018

Dear WT4 members, Today's (or tomorrow depending on timezone) call for the New gTLD Subsequent Procedures Sub Team – Track 4 - IDNs/Technical & Operations will take place January 11, 1500 UTC. The proposed agenda is as follows: 1. Welcome/Introduction/SOIs 2. Review of Financial Evaluation Straw Models 3. AOB In order to facilitate discussions and incorporate received feedback, two documents follow attached: a description of the problem background and of the 4 straw-models, and a position paper by Christa Taylor on financial evaluation in general. Adobe Connect room: https://participate.icann.org/newgtldsubteams/ You can connect your audio by following instructions in the pop up in the AC room, or use the Connect Me option that was sent in the calendar invitation. Best, CLO & Rubens

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FW: New gTLD Subsequent Procedures PDP WG: Request for Input Related to the Maximum Delegation Rate for New gTLDs
by Emily Barabas Jan. 10, 2018

Jan. 10, 2018

Dear Working Group members and Work Track 4 members, Please see the attached response from the SSAC to the Working Group’s request for input on root zone scaling. This document is also posted on the correspondence page of the Working Group wiki: https://community.icann.org/x/3B5yB . Kind regards, Emily From: Julie Hedlund <julie.hedlund(a)icann.org> Date: Friday 22 December 2017 at 16:46 To: Steve Chan <steve.chan(a)icann.org> Cc: Jeff Neuman <jeff.neuman(a)comlaude.com>, avri doria <avri(a)apc.org>, Rubens Kuhl <rubensk(a)nic.br>, Cheryl Langdon-Orr <langdonorr(a)gmail.com>, Emily Barabas <emily.barabas(a)icann.org>, Andrew Mcconachie <andrew.mcconachie(a)icann.org>, Steve Sheng <steve.sheng(a)icann.org>, Patrik Fältström <paf(a)frobbit.se> Subject: Re: New gTLD Subsequent Procedures PDP WG: Request for Input Related to the Maximum Delegation Rate for New gTLDs Dear Steve, On behalf of Patrik Fältström, SSAC Chair, please see the attached response from the SSAC concerning your request below. We wish you all a wonderful holiday and a very Happy New Year. Kind regards, Julie Julie Hedlund, Director, SSAC Support From: Steve Chan <steve.chan(a)icann.org> Date: Wednesday, September 13, 2017 at 8:00 PM To: "paf(a)frobbit.se" <paf(a)frobbit.se> Cc: Jeff Neuman <jeff.neuman(a)comlaude.com>, avri doria <avri(a)apc.org>, Rubens Kuhl <rubensk(a)nic.br>, Cheryl Langdon-Orr <langdonorr(a)gmail.com>, Emily Barabas <emily.barabas(a)icann.org>, Julie Hedlund <julie.hedlund(a)icann.org> Subject: New gTLD Subsequent Procedures PDP WG: Request for Input Related to the Maximum Delegation Rate for New gTLDs ** Sent on behalf of the New gTLD Subsequent Procedures PDP WG Co-chairs, Avri Doria and Jeff Neuman. The co-leaders of Work Track 4, Cheryl Langdon-Orr and Rubens Kuhl, are copied on this message. ** Dear Patrik, The New gTLD Subsequent Procedures PDP WG is seeking input from the community in regards to the maximum delegation rate of 1,000 TLDs per year. Please see the attached letter for details. As the letter notes, the WG co-chairs welcome your feedback and are available to answer any questions you may have about this request. Best, Steve Steven Chan  Policy Director, GNSO Support ICANN 12025 Waterfront Drive, Suite 300 Los Angeles, CA 90094-2536  steve.chan(a)icann.org mobile: +1.310.339.4410 office tel: +1.310.301.5800 office fax: +1.310.823.8649 Find out more about the GNSO by taking our interactive courses and visiting the GNSO Newcomer pages. Follow @GNSO on Twitter: https://twitter.com/ICANN_GNSO Follow the GNSO on Facebook: https://www.facebook.com/icanngnso/ http://gnso.icann.org/en/

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