Thanks for your response, Anne. As you note, the change of control in the ASP Handbook Restrictions section 4.6 states, "Supported applicants that progress to delegation will be restricted from assigning the Registry Agreement or from any Change of Control for a period of three years..." If the applicant submits a change request during the ASP application or evaluation process, that would need to be assessed for materiality and potentially re-evaluated if necessary. After an ASP applicant qualifies and before they become a Registry Operator (RO), ICANN is proposing that the ASP T&Cs include a provision for ICANN to confirm that the supported applicant or RO still needs financial support before it receives the next financial benefit. We added a few scenarios for context and to highlight some of the potential risks if ICANN were not to confirm eligibility prior to conferring the next financial benefit. Hope that helps to clarify and looking forward to our discussion. @All, we apologize for the delay in posting the combined redline--it was more challenging than we thought to show different versions of redlines while avoiding duplications, etc. I will share it on screen during the meeting and we will post it to the wiki just after. Many thanks for your patience and hopefully the redline shared last week was helpful in the meantime. Kind regards, Kristy ________________________________ From: Anne ICANN <anneicanngnso@gmail.com> Sent: Monday, October 21, 2024 6:30:40 PM To: Kristy Buckley Cc: subpro-irt@icann.org Subject: [Ext] Re: [SubPro-IRT] [For Review] ASP T&Cs Updates Hi Kristy - not sure why Scenarios 2 and 3 are even being brought up for discussion again. These both represent changes in control and we worked on this in the Sub-track and said that a change in control would disqualify an applicant. There are also specific provisions regarding transfers of ownership until after a certain time period. Are these issues being raised again for discussion in order to change the provisions that were already reviewed? Or am I just missing issues created by the existing "change of control" provisions that have already been published in final form in the handbook? Thank you, Anne Anne Aikman-Scalese GNSO Councilor NomCom Non-Voting 2022-2026 anneicanngnso@gmail.com<mailto:anneicanngnso@gmail.com> On Fri, Oct 18, 2024 at 5:40 PM Kristy Buckley via SubPro-IRT <subpro-irt@icann.org<mailto:subpro-irt@icann.org>> wrote: Greetings IRT colleagues, Further to our discussions during IRT meeting #78<https://community.icann.org/pages/viewpage.action?pageId=365592854> and based upon the input so far on the ASP Terms & Conditions (T&Cs), it seems we may be grappling with some more fundamental questions. Before diving into wordsmithing the T&Cs, we thought it might be helpful to tee up some “food-for-thought” IRT discussion questions and scenarios, outlined below. Discussion Questions: 1. In relation to Public Responsibility Due Diligence: * Can the applicant become affiliated with an existing RO/gTLD applicant after qualifying? * Can the supported applicant act counter to international law? 2. In relation to Financial Need: * Does a supported applicant have to be financially needy to receive each subsequent financial support? 3. In relation to Financial Viability: * This is covered by deposit and paying discounted gTLD eval fee; then by the gTLD Financial Evaluation. 4. In relation to Eligible Entities: * Can a supported applicant change their entity type after qualifying? * If we allow the supported applicant to change control as a prospective or actual gTLD applicant, how do we harmonize this with ASP Handbook [newgtldprogram.icann.org]<https://urldefense.com/v3/__https://newgtldprogram.icann.org/sites/default/f...> Restriction 4.6.6 that does not allow change of control for the first three years as an RO? * [Note: ASP Handbook Restriction 4.6.6 indicates that supported applicants that progress to delegation will be restricted from assigning the Registry Agreement or change of control for a period of three years unless for necessary reasons, in-line with a modified approach to SubPro IG 17.17 discussed with the ASP-IRT]. In relation to each of these questions, we’ve also developed an attached infographic to help share our thinking on the T&Cs (and in particular, T&Cs Section 4) in relation to the ASP evaluation criteria. The orange bars in the graphic illustrate our proposal for the period of time the applicant is expected to adhere with each of the ASP evaluation criteria categories. The yellow diamonds indicate potential checkpoints, where ICANN may, at its discretion, request documentation or information from the supported applicant/RO before it receives the next financial support. This approach is in alignment with ICANN’s mission as a nonprofit public-benefit corporation. Scenarios As you’re reviewing the ASP T&Cs, it may be helpful to consider some potential scenarios we may encounter with supported applicants: * Scenario 1: a small non-profit organization qualifies for support and receives the gTLD evaluation fee discount. It then receives a US $500K grant to support their future efforts as a Registry Operator. No other material changes are made on the supported applicant side. * If ICANN were to check/reaffirm eligibility prior to the applicant receiving a discount on a conditional evaluation fee, the supported applicant would still be eligible to receive the discount. * Scenario 2: a small social enterprise business qualifies for support. Prior to applying for a gTLD, the supported applicant sells a controlling share to an existing Registry Operator in return for a US $8M investment. * If ICANN were to check/reaffirm eligibility prior to the applicant receiving a discount on the gTLD evaluation fee, the supported applicant would no longer be eligible to receive a discount because they are affiliated with another Registry Operator (Public Responsibility Due Diligence) and they no longer meet the Financial Need nor Small Business requirements (<$5M USD in revenue, sales, cash and cash equivalents). * Scenario 3: a non-governmental organization qualifies for support and receives gTLD evaluation and conditional fee discounts. After passing the gTLD evaluation, prior to delegation, the applicant converts its status to a for-profit entity and auctions off the business. A Fortune 500 company buys the business. * If ICANN were to check/reaffirm eligibility prior to the Registry Operator (RO) receiving reduced base Registry Agreement fees, the RO would no longer be eligible for the discount. * [Note: ASP Handbook Restriction 4.6.6 indicates that supported applicants that progress to delegation will be restricted from assigning the Registry Agreement or change of control for a period of three years unless for necessary reasons, in-line with a modified approach to SubPro IG 17.17 discussed with the ASP-IRT. If the eligibility entity status is not required post-qualification per the T&Cs, the supported applicant can sell their business to another RO or gTLD applicant, increasing the risk of gaming and abuse.] I realize this is a lot of information to digest via email. As such, we will also prepare this information into slides but we wanted to share our thinking in advance of IRT meeting #81 on Tuesday to help inform our discussions. We have also attached the latest redline of the ASP Terms & Conditions (T&Cs) for your review. We will post a comparative redline to the 30 Sept version to the EXT Drive on Monday. Of course, please feel free to share your views on-list in advance of the meeting. Many thanks for your thinking on this and we look forward to meeting next week. Kind regards, Kristy, on behalf of the ASP Project Team _______________________________________________ SubPro-IRT mailing list -- subpro-irt@icann.org<mailto:subpro-irt@icann.org> To unsubscribe send an email to subpro-irt-leave@icann.org<mailto:subpro-irt-leave@icann.org> _______________________________________________ By submitting your personal data, you consent to the processing of your personal data for purposes of subscribing to this mailing list accordance with the ICANN Privacy Policy (https://www.icann.org/privacy/policy) and the website Terms of Service (https://www.icann.org/privacy/tos). 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