Joint Applicant Support Working Group Issues and Recommendations

The following is a proposed framework for moving discussions forward within the JAS group, by defining issues and identifying matters of substance yet to be resolved (which will be marked in red for clarity).

This document could possibly be the framework for a the final report of the JAS group.

Given the eventual target audience of this document and our desire to have it presented and read unedited, the authors have attempted to adopt a simple format while maintaining accuracy and consistency with previous consensus.

Part 1: WHY (provide applicant support)?
Part 2: WHEN (should support be provided)?
Part 3: WHO (qualifies for support)?
Part 4: WHAT (do qualified applicants get)?
Part 5: HOW (do we evaluate the applications)?

[ TODO: Map issues below to specific items from the ALAC/GNSO charters ]

Part 1 - Why provide new applicant support?

During the International ICANN Meeting in Nairobi, ICANN’s Board recognized the importance of an inclusive New gTLD Program and the concern expressed by ICANN stakeholders regarding the financial and technical obstacles faced by applicants from developing economies seeking to offer new gTLDs. The Board issued a Resolution (#20) at requesting ICANN stakeholders…

"...to develop a sustainable approach to providing support to applicants requiring assistance in applying for and operating new gTLDs."

In April 2010 the GNSO and ALAC co-chartered a Joint Working Group on Applicant Support, also known as the “JAS WG” (and referred hereafter as the WG), in direct response to this Board resolution. The main objective of this WG is to develop a sustainable approach to providing support to Applicants requiring assistance in applying for and operating new gTLD Registries.

In November 2010 the WG presented the Board with a Milestone Report which suggested several mechanisms for providing support to Applicants. These included cost reduction support, sponsorship and funding support, modifications to the financial continued operation instrument obligation, logistical support, technical support for applicant in operating or qualifying to operate a gTLD, and exception to the rules requiring separation of the Registry and Registrar function.

Since the release of the Milestone Report, both the ICANN Board and the Government Advisory Committee (GAC) have requested further clarification and details from the WG. And while the Board (at its Trondheim meeting) refused to approve differential pricing for applicants in need, the GAC (in its “Scorecard”) has requested that the issue be reconsidered and the WG will continue to explore this option.  At its Brussels meeting with the GAC to discuss the Scorecard, the Board confirmed that ICANN could implement a differential fee schedule for needy applicants, but added that appropriate criteria and mechanisms would need to be proposed to enable it to happen.

This WG is comprised of members who support these aims and are committed to lowering the barriers to full participation in the gTLD program by a truly global community. It is Chartered by both ICANN's At-Large Advisory Committee (ALAC) and its Generic Names Supporting Organization (GNSO); though the two charters are similar but not identical; a comparison between the two charters is available in this downloadable document.

Part 2: When should support be offered? In this round or wait until later?

This WG has determined that in order to be most effective, this program (of support for in-need applications) be implemented for the first and subsequent rounds. Several reasons are provided in support of this recommendation:

• Board Resolution 2010.03.12.46-47 clearly expressed the need to ensure     that the New gTLD Program is inclusive. Much of the ICANN global community, particularly from  developing regions, has raised its hopes and expectations with this decision.
• With every new gTLD application round, the market competitive disadvantage increases. ICANN should not cause or allow the New gTLD Program to further the gap in gTLD Registry representation from other regions. The diversity, competition and innovation the New gTLD Program could bring should be an opportunity to all around the world since the Internet is a global resource that belongs to all. ICANN has the obligation to look closely into this issue and fulfill its responsibility to serve the global public interest by allowing accessibility and competition for all around the world.
• There  is no indication whether, in subsequent rounds, fees will be reduced and, in case there is any reduction, by how much, therefore there is no benefit in waiting.
• Informal market research by some of the WG members indicates there is built-up demand for new gTLDs, particularly IDN gTLDs. There is expectation for a considerable number of applications. One of the main concerns is that, without some sort of assistance program, the most obvious and valuable names (ASCII and IDNs), will be taken by wealthy investors. This may limit opportunities in developing regions, for local     community institutions and developing country entrepreneurs. The majority of the current 21 New gTLD Registries are located in USA or Europe. There is one in Hong Kong and absolutely none in a developing country.
• While,     per policy, ICANN plans for a second round, the timeline for this to happen is, at best, uncertain. Experiences from previous rounds add to the uncertainty. For example, ICANN communicated during the last round that this was to be followed soon by new rounds, nevertheless, it is taking almost a decade for a new round to materialise. Since ICANN cannot give guarantees and certainty of when future rounds will take place, making those who cannot afford to participate in the program during this round due to the current elevated fees is perceived as an unfair and non-inclusive treatme

Part 3 - Who qualifies for support?

The eligible Applicant must have some function that is social, philanthropic, community-based and/or minority IDN build-out. (see S. 2.8 of the Milestone Report). Applicants can take any form (except purely governmental) as long as they have a combination of financial need, public service and a sustainability plan.

By consensus of the WG, purely Governmental or para-statal applicants have been listed as not entitled to receive support. However, at the ICANN San Francisco meeting the WG received a request from the GAC to consider including Government applications from Developing Countries for support.  The WG will work to obtain a mutually acceptable definition and criteria to fit Government applications with the GAC WG, but recognizes the difficulty in measuring a government’s “need” and concern of the appropriateness of offering support for one government over another if resources are limited. The GAC WG has offered to review the JAS criteria and provide its recommendations on a formulation of a solution for possible support to Developing Country Government applications.

The WG defined eilgibility in both positive (eligible applications) and negative (ineligible applications) terms. That is, there are criteria that the application must meet and some criteria that it must not posess.

The WG has determined a number of criteria to be used in the determination of a gTLD application eligible for support and/or cost relief (henceforth to be referred to as “eligible application”):

1. Financial need of the applicant (primary and mandatory)
2. Corporate structure of the applicant
3. The need of the community to be served by the proposed TLD
4. Existing levels of service in the script of the proposed TLD string (in the case of IDNs)
5. Location of the applicant, the TLD registry and/or the primary stakeholders in a lesser developed country

3.1 Financial Need

The overriding consensus of the WG is that financial need is the primary criteria for determining eligible applications. It is important that, while determining need, that the applicant also demonstrate sufficient stability and sustainability. It is undesirable that a TLD would fail, for instance, if its sponsor was wholly dependent on external grants without long-term commitments. So while maximum operating metrics are to be established to demonstrate need, minimum metrics will also be required to demonstrate stability and  sustainability.

Amongst the criteria proposed as required for an applicant to qualify for assistance are:

• Minimum gross income being three times the combined operational and contingent risk costs required to sustain operations of the gTLD;

  [ is this accurate? If not, what should it be? ]

• Maximum annual income, unencumbered assets or liquid resources being not more than five times the conventional cost of obtaining a gTLD (currently set at $185,000)

  [ Is this number too low? too high? ]

• the ability to pay for all expenses remaining after reductions and support are factored in.

Applicants are not eligible if there are factors that would hinder the Applicant from availing itself of the WG support. It would be self-defeating to support an applicant who, by virtue of other disabilities, may not be able to avail themselves of any support granted e.g. if the applicant is already bankrupt, is the subject of pending litigation or criminal investigation etc.

3.2 Applicant mission and structure

The WG, by full consensus, agrees that consideration for eligibility be considered for: groups which exist to support cultural, linguistic and ethnic communities. Indeed, some in the WG believe that the process to evaluate eligible applicants could take advantage of the existing Applicant Guidebook processes for evaluating the “Community” category of gTLD application.

While for-profit companies, private-public partnerships and hybrid entities can be eligible, the WG agrees that this support program must not be used as a substitute for conventional business risk; it should be used to enable new gTLDs that could -- without this program -- be unimaginable.

The WG wished to maintain flexibility in the type of organizational structure that could apply, however there was agreement that the following shouldnot be eligible:

• Governments, para-statal agencies and government-owned companies
• Groups applying for TLDs based on geographical names (ie, “city TLDs”)
• Companies proposing a corporate name or brand as the applied-for TLD string

We are aware that the ICANN Governmental Advisory Committee has requested reconsideration for the WG's limit on governmental applications. However, the GAC has not provided any real rationale for this request, nor has it offered any participation of its own in the WG.

3.3 Communities needing to preserve a language or culture

The “.cat” Catalonian TLD is seen by many linguistic, ethnic and cultural communities as a success story that has helped to preserve and indeed grow the language and culture. Many such groups -- especially those with geographically dispersed diasporas -- see a TLD as unifying icon that will facilitate Internet use while encouraging community growth. The WG agreed that the applications by such communities, should they meet the requirements of need, should be eligible for relief/support.

3.4 Communities supports for under-served languages

In the working group call of April 26th, which had "IDN" as its scheduled topic, there was consensus among the participants to substitute the word "language" for the word "script" where it appears in the final text(s).

A number of WG members have advocated support for the build out of TLD strings in non-Latin scripts by communities that use these scripts and have to date been unserved or under-served on the web. 

As a part of this, the group has identified two categories of groups that might receive support – communities that regularly use more than one script but might otherwise be unable to afford full-price build out of two scripts; and smaller script communities whose scripts are very limited on the web.

To address the needs of these groups, partial (but not consensus) support has been expressed for concept of “bundling” -- that is, reducing the price of a TLD string in an “underserved” IDN script that accompanies a conventional application for the similar string in a Latin script. The WG achieved a consensus that as long as the Applicant is providing build-out of a language whose web-presence is limited and they meet the other criteria, price support should be recommended.

The WG did achieve consensus that as long as the Applicant is providing build-out of a language whose web-presence is limited and they meet the other criteria we should give support. 

3.5 Organizations based in Lesser Developed Economies

The WG achieved full consensus in agreeing that the criteria offered to judge applications give preference to those originating within the world’s poorer economies. Rather than having ICANN undertake the distracting task of determining where such economies are located, we would refer instead to the internationally agreed upon UN DESA list:

1. Least developed countries: category 199;
2. Landlocked Developing Countries: category 432; or
3. Small Island Developing States: category 722.

4. [ possibly -- per EBW and pending refinement -- a designation that would be inclusive of indigenous groups in developed economies as well as within non-national entities (ie, Palestine) ]

Part 4 - What benefits do qualified applicants receive?

• Financial support/relief from ICANN
• Cost Reductions -- at minimum, waive (consensus for this in the Milestone report) the Program Development Costs (US$26,000) 
• More reductions to be recommended as we are given better access to study the numbers
  • Staggered Fees
  • Partial refund from any Auction proceeds
  • Cost reductions for multi-script applications
  • Lower registry Fixed Fees
  • Lowered risk/contingency cost (US$60,000)
  • Review Base cost (US$100,000) to see if reduction can be made
  • Other possible reductions eg. Reduction of the Financial Continued Operation Instrument Obligation to 6-12 months
  • Ongoing support will be limited to five years

• Non-financial support/relief from ICANN* Logistical and technical help with the DAG application process including legal and filing support** Awareness/outreach efforts including efforts to ensure more people in underserved markets are aware of the new gTLD program and what they can do to participate in it** Deferred requirement of DNSSEC** Relaxed vertical integration regulations** What other non-financial relief (ie, regulation waiver/deferral) is possible?

• Support from third parties facilitated by ICANN** Pool of collected resources and assistance from third parties** Translation support** Logistical and technical support** Awareness and outreach** Infrastructure for providing IPv6 compatibility** DNSSEC consulting** IDN implementation support
  • Possible technical  setups
• Directory and referral service only for eligible applicants** Facilitating contacts with granting agencies and foundations** ICANN would facilitate but cannot commit to providing

• Financial support distributed by an ICANN originated (Development) Fund (S.2.3.1 of the Milestone Report)

Part 5 - How are gTLD applications evaluated against the above criteria?

For this part we can rely on some of the excellent detail work many WG members have put forward, and offer the excellent flowchart created and maintained by Dev Anand Teelucksingh. Here should be the specific tests and metrics used to determine compliance with the criteria stated in Part 3.

But before proceeding, there are some major fundamental points that -- at least to my (Evan's) recollection -- have never been adequately been resolved. Questions that have not even been asked need to be answered before the detailed part of this can be  accurately assembled.

Specifically ...

What is the required combination or formula regarding the application of the various criteria to determine an application's applicability to be considered for assistance. If the various eligibility criteria described in Section 3 above, what combination must an application meet in order to qualify? The only thing that was agreed by consensus at the Milestone Report was that financial need was a mandatory and primary criteria. The others, while mentioned, were not indicated as mandatory or option either alone or in combination. If all criteria were to be applied, then any application that did not include an IDN string would fail eligibility.

As an example,

"An application MUST meet criteria 3.1 (financial need) AND 3.2 (be made by a non-profit body or small business) AND 3.3 (part of an identified cultural, linguistic or ethnic community) AND EITHER 3.4 (require IDN support) OR 3.5 (be from a lesser developed country)"

Whether the JAS group accepts this particular formula is less important than having consensus on a forumla of some kind.