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Transcript

• Transcript_DT-O Meeting_17 March 2016.doc
• Transcript_DT-O Meeting_17 March 2016.pdf

Recording

• The Adobe Connect recording is available here:  https://icann.adobeconnect.com/p39qp7iname/
• The audio recording is available here:  http://audio.icann.org/stewardship-transition/iana-dto-17mar16-en.mp3

Proposed Agenda:

1. Define the financial objective(s) for PTI
   1. Please note Olivier’s message on this topic:

                         i.  Primary objective: “financial sustainability for IANA”

                         ii.  Two main components:

a)      Financial stability (“The IANA budget must be set well in advance and must therefore be predictable. Any sudden change in circumstances, whether internal or external to IANA, which may trigger an increase in the IANA budget, must be covered to a certain extent. (which we might need to define).”

b)      Financial independence from ICANN

b.  Discussion
c.   Agree on next steps for finalizing the financial objectives

2.  Develop a recommendation for ensuring multi-year continuity of IANA Services funding

1. 1. Brainstorm ideas
   2. Discuss pros & cons of ideas
   3. Agree on a process for determining a DT-O recommendations

3.  Develop a process for development and approval of the IANA Services budget.

1. 1. Development of this process should involve Elise Gerich and Xavier Calvez or their designees.
   2. Is it possible to have a rough draft of a process by our meeting next week (Wednesday, 23 March, 1700 UTC)?
   3. Are there any volunteers to work on this effort?

1. 1. Who would the bigger group include that are not in DT-O?  (Jordan Carter)
   2. Discussion
   3. Next steps

Notes

4. Cooption of DT-O into a bigger group that is also dealing with CCWG matters?

    a. Who would the bigger group include that are not in DT-O?  (Jordan Carter)

    b. Discussion

    c. Next steps

• What are the possible implications? What issues does the CCWG have to deal with in relation with Budget? Does CCWG already 
  have a group in place? First meeting of informal CCWG group was held in Marrakesh - those same people would likely be 
  interested to join this effort (see minutes of that meeting). Primary issue for CCWG is defining a framework for a caretaker budget 
  for the overall ICANN budget. Outstanding questions from that meeting was Xavier's suggestion to incorprate in that budget a 
  caretaker budget for PTI or does that needs to be separate. In FY17 draft budget open question how much is spent and how 
  these expenses will be funded - not decided yet whether this would come from the reserve fund. Assuming in the budget that CWG-Stewardship implementation moves forward and as such PTI operation costs are included in the FY17 draft budget. What is not 
  included at the moment is any costs related to the implementation / further work on any other transition related work such as WS2 
  or implementation of other aspects.
• Not clear yet how PTI will be implemented which is being worked on by a CWG-Stewardship Task Force. Need to ensure co-ordination between all these different streams of activity.  
• Make sure that focus is not lost by widening the scope of this effort. 
• CCWG-Accountability mechanisms also cover PTI. 
• Need to confirm who is covering IANA care-taker budget if two groups decide to work separately
• Proposed approach: CCWG members are welcome to participate in DT-O meetings, but will recommend to the CCWG-Accountability the formation of a separate group to focus on the CCWG Budget related elements. DT-O to cover IANA 
  Services / PTI care-taker budget, which would include all IANA services (with PTI being a sub-set).  
• Consider taking similar approaches with regards to care-taker budget through regular communication / co-ordination.
• Question is whether IANA services care-taker budget would be part of the overall care-taker budget or not. Both groups to check in with each other in a couple of weeks to discuss further. 
• From ICANN Finance perspective it would make more sense to tackle both in one approach and then solicit input from the 
  different groups. Consider setting up email distribution list that would combine both groups.

1. Define the financial objective(s) for PTI

    a. Please note Olivier’s message on this topic:

          i.Primary objective: “financial sustainability for IANA”

         ii.Two main components:

            a) Financial stability (“The IANA budget must be set well in advance and must therefore be predictable. Any sudden change in 
circumstances, whether internal or external to IANA, which may trigger an increase in the 
IANA budget, must be covered to a certain extent. (which we might need to define).”

            b) Financial independence from ICANN

    b. Discussion

    c. Agree on next steps for finalizing the financial objectives

• What do we want to achieve? Stability in light of lack of financial independence (immunity of the IANA operations budget from 
  ICANN's), operational excellence (ensure there are sufficient funds to guarantee operational excellence), operational financial 
  independence. Financial stability and operational excellence would cover all the points made. Consider adding some clarifying 
  notes to explain these in further detail. 

Action item #1: Staff to add clarifying points to main objectives of financial stability and operational excellence and circulate these 
to the DT for review prior to next week's meeting. 

2. Develop a recommendation for ensuring multi-year continuity of IANA Services funding

    a. Brainstorm ideas

    b. Discuss pros & cons of ideas

    c. Agree on a process for determining a DT-O recommendations

• Have to make sure that current operational budget is in PTI's control. Money has to be transferred to PTI in the beginning 
  of the year. PTI should be isolated from any financial issues that ICANN may encounter. Need to segregate money from 
  ICANN budget so it is available for PTI to spend. 
• Possible options to ensure multi-year guarantee to be further considered: hold year's budget in escrow, would an insurance 
  be an option or bank cash deposit
• Minimize complexity but also factor in what could happen in case of bankruptcy. See also Sidley memo: A parent entity bankruptcy 
  filing does not result in a subsidiary entity also becoming a debtor in a bankruptcy proceeding, regardless of whether the subsidiary 
  is a non-profit corporation or LLC. Thus, a wholly owned subsidiary is not also a “debtor” in bankruptcy unless its governing body specifically 
  determines that it should file for bankruptcy or there is some basis to substantively consolidate the subsidiary with the parent (which is 
  unlikely in this circumstance.
• Clarification by what is meant with budget - a budget is not a bucket in which there is money, a budget is the quantification of a 
  perspective action plan in monetary terms (resources required to deliver onthat action plan). Avoid confusing budget and bank account. 
• If there is anything that needs to go into Bylaws would need to be identified as soon as possible as that process has started. 
• Which issue is early approval of PTI budget solving? Financial stability issue - community felt there needs to be an approved budget 
  sooner than the ICANN budget factoring in the critical nature of the IANA Functions. What seems to be the point is that the funding of 
  IANA/PTI is secured, this is quite a different point than having the budget approved early/late. Other reason was to ensure that any 
  concerns with IANA Budget could be dealt with at an early stage. 
• Xavier / Finance Team will be responsible for drafting the process for the development and approval of the PTI budget in consultation with DT-O (as such, no need to reach out to Elise which was identified earlier as an action item).

Action item #2: All to share ideas on how to have multi-year guarantee of funding ahead of next week's meeting. 

Action item #3: Staff to pull from the CWG-Stewardship and CCWG-Accountability proposals those items that specifically relate to IANA Services Funding

Action Items

• Action item #1: Staff to add clarifying points to main objectives of financial stability and operational excellence and circulate 
  these to the DT for review prior to next week's meeting. 

• Action item #2: All to share ideas on how to have multi-year guarantee of funding ahead of next week's meeting. 

• Action item #3: Staff to pull from the CWG-Stewardship and CCWG-Accountability proposals those items that specifically 
  relate to IANA Services Funding

Chat Transcript

  Brenda Brewer: (3/17/2016 14:47) Good day and welcome to DT-O Meeting #9 on 17 March at 20:00 UTC!

  Chuck Gomes: (14:58) Hello all.

  Mary Uduma: (15:04) Hello all

  Jonathan Robinson: (15:05) Apologies. I had problems logging in. Here now

  Jonathan Robinson: (15:05) Thanks Chuck

  Xavier: (15:05) Trang and I are on the phone line as well.

  Jonathan Robinson: (15:07) Chuck. Agreed, it will be helpful to understand Jordan's suggestion

  Paul Kane: (15:10) I think this group is just related to PTI .... ICANN budget is seperate - There is an Implementation Group but that is a different Group....

  Alan Greenberg: (15:10) Sorry for being late.

  Alan Greenberg: (15:11) Will be on bridge in a moment.

  Alan Greenberg: (15:14) Did we already cover items 1-3 or are we doing them out of order?

  Jonathan Zuck: (15:14) out of order for me Alan. Thanks

  Marika Konings: (15:14) @ Alan, we are covering item 4 first

  Alan Greenberg: (15:15) Thanks.

  Paul Kane: (15:15) Alan - changed the order 4 moved to first item

  Bernard Turcotte Staff Support: (15:15) Jordan will join in a few minutes

  Jonathan Zuck: (15:16) sorry, I meant IANA functions budget

  Jordan Carter (.nz, CCWG): (15:20) hi all

  Jordan Carter (.nz, CCWG): (15:21) which agenda item are we on?

  Alan Greenberg: (15:21) 4

  Xavier: (15:21) #4

  Alan Greenberg: (15:21)  skipped ahead

  Jonathan Robinson: (15:23) @Alan. Agreed, Jonathan Z, Jordan and any others are welcome in the DT-O meetings from my persapective

  Jordan Carter (.nz, CCWG): (15:26) by just being on the list we can make sure we are coordinated

  Jonathan Zuck: (15:26) +1 Jordan

  Paul Kane: (15:26) But you are welcome to join to hear/participate in our discussion so you know what the CWG group is discussing....

  Grace Abuhamad: (15:26) Should anyone else be added to the list?

  Jonathan Robinson: (15:28) @Chuck. I agree with the composite IANA Services languange i.e. to encompass all current services

  Paul Kane: (15:30) It is assumed that PTI does all 3 roles.....  The naming community is just a subset....

  Jonathan Robinson: (15:30) @Alan. It is consistent with my understanding that PTI will undertake all functions

  Alan Greenberg: (15:31) @Jonathan, yes, but that is not what some ICANN folks including Elise seem to be envisioning. At least as how I understand it.

  Jordan Carter (.nz, CCWG): (15:31) will do, thanks

  Paul Kane: (15:32) Alan - interesting.  I wonder why ....

  Jordan Carter (.nz, CCWG): (15:32) it's probably based on what the other operational communities actually want

  Alan Greenberg: (15:33) @Paul, at leasst partly due to the CWG using the term PTI in two different ways, 1) the entity that does all IAN  functions and 2) the entity that the names community could require the separation of (ie the names part of IANA)>

  Jonathan Robinson: (15:33) @Alan. Understood and that is why I think we need to do the detailed work within the staff / CWG Implementation group in order to iron all o fthat out

  Jordan Carter (.nz, CCWG): (15:33) and from my point of view the answer to Jonathan's question is no: there should be no impact whatsoever on the IANA budget if there is an ICANN budget veto. Otherwise we break the proposed approach that veto of one doesn't affect the other

  Alan Greenberg: (15:34) Also, Elise seems to think that having INANAnot subcontract to PTI for those two parts would be easier and also more comforting for staff (that part is a bit fuzzy in my mind).

  Olivier Crepin-Leblond: (15:34) The way I see our discussion is that this is all going to be about scheduling the work of the two groups so as to (1) maximise resources, (2) avoid conflicting work and (3) coordinate the two groups

  Alan Greenberg: (15:35) @Jonathan, I thought that was the purpose of the coordination group (co-chairs and DT leaders) formed in Marrakech).

  Jonathan Robinson: (15:35) @Xavier. Agreed you tackling both simultaneously makes sense. That is why I referred to staff as having a bridging / connecting function in my opening remarks.

  Jordan Carter (.nz, CCWG): (15:36) Agree Xavier

  Jonathan Robinson: (15:36) @Alan. Exactly. That is the purpose of the coordination group

  Jordan Carter (.nz, CCWG): (15:37) We could use this email list, since the key CCWG people have been added to the DT-O list by staff

  Jonathan Zuck: (15:38) and Jorda and I will sneak off

  Jonathan Zuck: (15:39) No. we're good. I'm gonna run screaming from issues 1-3

  Paul Kane: (15:40) Olivier +1

  Alan Greenberg: (15:44) Operational financial independence

  Alan Greenberg: (15:45) Relative isolation from ICANN financial instabilities

  Alan Greenberg: (15:45) ??

  Xavier: (15:46) immunity of the IANA operations budget from ICANN's.

  Alan Greenberg: (15:48) Funding does not guarantee excellance, but insufficient funding can make it very difficult.

  Paul Kane: (15:50) Operational excellence is not a financial matter....  PTI needs funding to deliver excellence service.

  Paul Kane: (15:50) Xavier - agree

  Jonathan Robinson: (15:51) Note that "insulation" needs to be from both short term purturbations and longer term issues. Longer term is probably for agenda item 2

  CLO: (15:52) hi all justify through Boarder Control and clear to join.

  Paul Kane: (15:52) Operational stability

  CLO: (15:53) add some depth and colour.... yes

  Marika Konings: (15:53) Yes

  CLO: (15:53) ;-)

  Marika Konings: (15:53) yes

  Xavier: (15:54) and we help Marika.

  Xavier: (15:54) But it will be a draft

  CLO: (15:54) thx Xavier

  Paul Kane: (15:54) Thanks Marika and Xavier

  Bernard Turcotte Staff Support: (15:54) sorry have to step away

  Xavier: (15:54) ok, so it will be a first draft

  Paul Kane: (15:57) Alan +1

  Alan Greenberg: (16:00) Not quite: In case of bankrupcy, PTI could likely be isolated...

  CLO: (16:02) operating funds Xavier?

  Jonathan Robinson: (16:03) Refer Sidlley memo from April 2015 regarding subsidiary & bankrupcy

  Jonathan Robinson: (16:03) A parent entity bankruptcy filing does not result in a subsidiary entity also becoming a debtor in a bankruptcy proceeding, regardless of whether the subsidiary is a non-profit corporation or LLC. Thus, a wholly owned subsidiary is not also a “debtor” in bankruptcy unless its governing body specifically determines that it should file for bankruptcy or there is some basis to substantively consolidate the subsidiary with the parent (which is unlikely in this circumstance

  Chuck Gomes: (16:05) Thanks Jonathan

  Olivier Crepin-Leblond: (16:06) @Jonathan: but what happens when a wholly owned subsidiary is entirely dependent on its parent financially?

  Olivier Crepin-Leblond: (16:07) would a bankruptcy filing of the parent company signify an automatic bankruptcy filing for the subsidiary?

  Jonathan Robinson: (16:07) @Olivier. That's what we need to deal with here i.e. some form of "IANA Reserve Fund" to guarantee stability

  Paul Kane: (16:08) I am not familiar with Californian Corp law .... hence guidance from Xavier is welcome

  Paul Kane: (16:11) Jonathan - real support for the idea of a Reserve Fund

  Paul Kane: (16:11) Alan +1

  Alan Greenberg: (16:13) Insurance is surely possible. I was once told that lloys will insure anything. BUt there would of course be a fee.

  Alan Greenberg: (16:13) lloyDs

  Paul Kane: (16:13) I'm not in favour of  Risk Insurance ... cash set-aside is certain :-)

  Alan Greenberg: (16:13) Good idea

  Jonathan Robinson: (16:14) @Olivier. Creative thinking indeed. But, an ongoing cost.

  Olivier Crepin-Leblond: (16:14) @Alan: if a yearly fee is less than the interest on a sum that's several millions of dollars (multiple years of budget) it could be a potential solution?

  Alan Greenberg: (16:14) Depends on how they assess the likelihood of needing the money.

  Olivier Crepin-Leblond: (16:14) there is a cost to putting a large sum of money aside

  Olivier Crepin-Leblond: (16:15) also -- an insurance might be more independent and less likely to be targeted by creditors of ICANN if ICANN goes into bankruptcy

  Alan Greenberg: (16:15) Olivier, not really. Some excrow accounts may not yield interest, but that is not a given.

  Olivier Crepin-Leblond: (16:15) just a wild guess :-)

  Paul Kane: (16:15) :-)

  CLO: (16:19) mission critical funds allocation = IANA budgeting and funds allocation

  Xavier: (16:26) I think Jonathan R. captured the point: what seems to be the point is that the funding of IANA/PTI is secured, this is quite a different point than having the budget approved early/late.

  Olivier Crepin-Leblond: (16:30) I think that there is an angst in the community that if the ICANN Board budget is approved late, thus the IANA budget could be approved late, and might sufer a shutdown like the US government shutdowns

  Xavier: (16:31) @Alan. that is a completely different topic which makes complete sense on its own. BTW, that concern is totally equivalent for the rest of ICANN

  Paul Kane: (16:32) Very faint

  Brenda Brewer: (16:32) very faint Cheryl

  Olivier Crepin-Leblond: (16:32) I cannot hear Cheryl at all

  CLO: (16:32) I'll type

  CLO: (16:33) in a car sorry

  Xavier: (16:33) don't type while driving...

  Paul Kane: (16:35) Mary - I don't think there are difficulties it is just a need to comply with recommendation

  Paul Kane: (16:35) and what the group meant

  Paul Kane: (16:39) I dont think Alan was advocating 9 months in advance - 3 months would be enough IMHO

  Marika Konings: (16:39) I think Grace had to drop from the call

  CLO: (16:39)  we need to make some assumptions and declared methodologies in all this...  some of what we have 'said' was clearly based on our clear needs to "secure operating funds" for X years...   But if we have established (as Xavier indicated there are choices)  that we have secured ops funds,  then we would still need to establish a method for regular review and modification of budget(s)  as needs etc., must be able to be made for the efficiency and effectiveness of IANA services

  Olivier Crepin-Leblond: (16:39) well understood -- but the "vetoing the IANA budget" needs to be carefully designed if we are going to design implementation for this type of thing

  Marika Konings: (16:40) but I will pass on the action item

  CLO: (16:41) Chuck a little over an hour ago I was landing back in Sydney

  Olivier Crepin-Leblond: (16:41) Welcome back to Australia Cheryl :-)

  Paul Kane: (16:41) Alan - I think the CWG was clear that PTI covers all three services - but concerning at this late stage there is an intent to split it

  Paul Kane: (16:42) Thanks all

  CLO: (16:42) been a long trip OCL

  CLO: (16:43) thanks everyone... bye for now...