Notes

RFP 3 Meeting - 26 January 2015

Agenda

 1. Welcome

 2. Roll Call

Attendance will be taken from AC room

On audio only: Siva

 3. Review Structural Analysis - Contract Co.

See https://docs.google.com/document/d/1KXYKuFKfPADgF3U0WmruLPrwhm8y3yHv160Lphz3-X8/edit?usp=sharing. 

Entity Status of Contract Co.

• • Survey did not reveal many areas of convergence
  • Objective to flesh out details of contract co. regardless of whether the principle of contract co. is supported at the end of the day
  • Does non-profit corporation status require specific resources or could it be a 1$ company i.e. how well does it need to be funded? No particular minimum funding requirements (no statutory requirements), at least in the US. Not-profit does not make it cannot make money - in a US context it mainly refers to the fact that it does not have shareholders and does not return profit to third parties. Not-profit typically has a public interest purpose, which could also be in the form of a membership organisation (for the benefit of its members). 
  • A non-profit first needs to be established as a corporation - what is the time frame to move from a corporation to a not-for-profit corporation (501C status)? As it incorporates it is immediately characterised as a not-for-profit. Needs specific approval and apply for tax exempt status. 
  • How does this compare to a limited liability corporation? All corporation provide limited liability. A limited liability corporation is always for profit - lighter weight structure for a typical corporation (for example, units compared to shares)

Jurisdiction

• • Diversity of jurisdiction would be satisfied by having it in another jurisdiction than California. Suggested jurisdiction is Delaware which is set up to provide a home for many corporations. 
  • Delaware law is set up to be easily adopted by third parties - allow for standard aspects of setting up a corporation.
  • All registry agreements are signed under California law - could be a reason to maintain Contract Co. in the US. 

Membership

• • Contract Co. would have no members

Relationship to ICANN

• • Independent of ICANN
  • Indemnification - contemplated in the contract, IANA Operator would indemnify Contract. Co. Would that mean that ICANN would be funding its opponents case without any limitations? Normally parties will bear their own costs - only in exceptional cases this may be different. Indemnification does not mean you can act with impunity. 

Relationship to MRT

• • If MRT is a committee of Contract Co, this could be problematic. - was one of the suggestion, not necessarily a recommendation
  • Bylaws of Contract Co would specify it would take its direction from MRT
  • Should MRT be Board of Contract Co? Entities should be separate to avoid empire building. However, would it be possible to keep MRT within the same bounds as Contract Co.? How would MRT institute itself? MRT could be the board and bylaws could restrict actions of MRT - could be as effective as any other set of restrictions to avoid overreaching of board. Could address some issues, but might create others? Consider pros and cons of structuring it this way.
  • RFP would be most labor intensive task for MRT but would only occur periodically.

Organizational Documentation

• • Contract Co would have Articles of Incorporation and Bylaws to make its limited purpose clear - not able to act outside its limited remit. 
  • Any decisions that would need to be made would be specified in the Bylaws
  • Running of RFP would fall to the MRT

Transparency 

• • Contract Co would function in a fully transparent manner

Accountability

• • Accountable to MRT; board members subject to recall; performance subject to review as well as budget. 

Composition of Board

• • Board will be as small as allowed by relevant corporate law.
  • May want to consider staying away from paying board members - but further advice may be needed.
  • Only motivation is to carry out limited tasks of Contract Co and take direction from MRT.
  • Staff would be as small as possible

Meetings

• • Conducted primarily by phone and web

Term lengths / limits

• • Staggered, term limited

How will decisions be made

• • Decisions will be made by the MRT and adopted by the Board of Contract Co. 

Support needs

• • Little or no staff - delegate daily functions to CSC, MRT or MRT secretariat
  • May require a web-site as well as email and email lists

When would the Board meet

• • As rarely as possible consistent with legal requirements

Funding

• • Same as MRT

Capture

• • Safeguards must be in place to avoid capture
  • Capture shouldn't be defined by economic interests as registries are expected to have a specific interest in the IANA function

Further legal advice will be needed to assess viability of Contract Co. option. - any suggestions for legal counsel are welcome.

Transcript

Transcript RFP3 26 JAN.doc

Transcript RFP3 26 JAN.pdf

Recording

The Adobe Connect recording is available here: https://icann.adobeconnect.com/p8prbtf2t8m/

The audio recording is available here:  http://audio.icann.org/gnso/gnso-rfp3-26jan15-en.mp3

Chat Transcript

  Brenda Brewer:Welcome to the CWG RFP3 call on 26 January at 21:00 UTC.

  Gary Campbell:Hi Brenda

  Brenda Brewer:Hi Gary!

  Gary Campbell:How are you?

  Brenda Brewer:I'm great thank you, and you?

  Eduardo Diaz - (ALAC):¡hola a todos!

  Gary Campbell:I am great

  Bernard Turcotte - staff support:hello

  Brenda Brewer:Hi Avri!  you sound loud and clear.

  Avri Doria:thanks Brenda

  Matthew Shears:Hello!

  Lars Erik Forsberg GAC:Hello everyone

  Martin Boyle, Nominet:Hi all

  Grace Abuhamad:Hi all !

  Avri Doria:does this chart include the functions or is that another chart.?

  Avri Doria:i guess it is another chart.

  Martin Boyle, Nominet:I hope that this organisation is not acruing money at all

  Alan Greenberg (ALAC):What it does is sort of referred to under Organizational Documentation.

  Mil:Avri, you apply for TAX EXEMPT status you do not apply for nonprofit status

  Greg Shatan:I think the idea is it would not be funded or it would be minimally funded to the smallest amount necessary.

  Alan Greenberg (ALAC):I thought that Non-profit is a characteristic. Charitable status is what is applied for.

  Alan Greenberg (ALAC):And tax-free status also a separate issue

  Avri Doria:got it.  thanks

  Bernard Turcotte - staff support:Are we not getting legal experts to tell us all about this

  Alan Greenberg (ALAC):I beleive that tax-exempt does not imply charitable (able to issue receipts for donations).

  Donna Austin, RySG:@Bernie, I hope we are.

  Avri Doria:unless it charges, all of its dfunds are going to come from charitable donations. i would assume.

  Alan Greenberg (ALAC):@Avri, I would not assume that.

  Alan Greenberg (ALAC):From the perspective of the source of the finds, it does not make a lot of difference. It is either an expense or a donation, both tend to be tax deductible. Charitable status really has import when you are looking for donations from individuals.

  Martin Boyle, Nominet:@Avri:  I can't see how they would be, especially if we were to transfer funding from icann.  So I can see a NfP organisation, but not a tax-exempt or charitable trust

  Olivier Crepin-Leblond:so I gather this contract co would need to subscribe liability insurance for those involved?

  Avri Doria:Why Deleaware?

  Avri Doria:Are the legal implications good in del? 

  Mil:that is key, we don't want to concentrate too much authority in one jurisdiction

  Lars Erik Forsberg GAC:So why not outside the USA?

  Bernard Turcotte - staff support:There is no argument when it comes to maple syrup

  Bernard Turcotte - staff support:Québec is it

  Mil:it could be Lars, but we need specifics at this point, so people know what kind of law they are dealing with and what characteristics it has

  Avri Doria:i prefer RI Maple.

  Brenden Kuerbis:Can we capture that "diveristy of jurisdiction" as requirement that legal advisors can provide input on?

  Martin Boyle, Nominet:so we need a jurisdiction with sticky laws?

  Olivier Crepin-Leblond:Switzerland!

  Mil:and central NY does really good maple syrup, too

  Martin Boyle, Nominet:@Brenden +1

  Mil:what does "sticky" law mean?

  Mil:Donna - that is not an issue. Contract Co des not issue registry or registrar contracts

  Matthew Shears:+ 1 Donna

  Martin Boyle, Nominet:Wading through treacle might be a better though, Mil

  Mil:???

  Avri Doria:so litgation would be in Deleware? according to Deleware law..

  Sivasubramanian M:The idea of a $1 Delaware company formed to award the IANA contract  -   highly susceptible to external criticsm

  Mil:Siva, only by people who don't know anything about what we are doing

  Donna Austin, RySG:@Mil (is this Milton?) I understand but it still could be an argument that resonates with registries, but I don't know for sure.

  Lars Erik Forsberg GAC:But Delaware is also a-famous for money laundry

  Sivasubramanian M:Yes, I am more concerned about criticsm from those quarters

  Sivasubramanian M:That was @ Mil

  Avri Doria:in movies at least.

  Mil:one key issue here is that the jurisidction of Contract Co should not be confused with the jurisdiction of ICANN.

  Alan Greenberg (ALAC):Can "Mil" please identify themselves?  Unless you are someone's mother-in-law.

  Mil:Yes, Mil = Milton

  Mil:typed my name in a bit too fast

  Avri Doria:good handle.  never seen anyone use it before.

  Alan Greenberg (ALAC):Pulldown menu to right of "Attenddees" title lets you change it

  Mil:Since it irritates you I will keep it that way

  Sivasubramanian M:I favor a solution without ContractCo but if a ContractCo or MRT is ever to be incoprated,  at least choose a jurisdiction that is not thought of lightly.

  Mil:I like the Mother in Law identity

  Matthew Shears:.mil

  Mil:Delaware is thought of so heavily that it holds more multinational corps than any other jurisdiction in the world

  Alan Greenberg (ALAC):I LIKE that. Let's be a religious order!

  Mil:I am not an advocate of Delaware per se, but if someone doesn't like it they have to propose a specific jurisdiction

  Mil:But would membership makes its accountability to MRT more airtight?

  Matthew Shears:I agree membership in ContractCo is not ideal

  Brenden Kuerbis:I don't think we want any way for the Contract Co to receive instructions that deviate from MRT instructions.

  Matthew Shears:+1 Brebden

  Matthew Shears:Brenden

  Mother in Law:yes that sounds uncontroverisla

  Mother in Law:uncontroversial

  Mother in Law:listen to your moether

  Mother in Law:both

  Seun:Isn't the relationship more than signing contract, where does contract co get its resources from? like funding?

  Seun:I see there is funding on the next page though

  Matthew Shears:doesn't funding come from the operator?  does it need funding?

  Mother in Law:ICANN is California NPPB law, Delaware law is different

  Alan Greenberg (ALAC):NGPC is a subcommittee OF the Board.

  Mother in Law:Why can't the MRT be the Contract Co?

  Mother in Law:i.e. its board?

  Alan Greenberg (ALAC):@Mother, it can, but then we have rebuilt a new flvour of ICANN.

  Alan Greenberg (ALAC):flavour

  Alan Greenberg (ALAC):or flavor fo those in thhe US

  Seun:@Matthew the way I understand the current NTIA contract is that its cost free (to ICANN). It feels there is a lot of dependence on the operator.

  Mother in Law:ICANN forces its registry and registrar contractees to indemnify it

  Mother in Law:Alan, I don't see how a contract co is another flabor of ICANN.

  Matthew Shears:not really a new flavor of ICANN alan - the MRT has a very limited remit has nothing to do with policymaking which is ICANN's main role in the Internet ecosystem

  Mother in Law:It has a very limited mission

  Alan Greenberg (ALAC):If the MRT is the CC Board, it IS defacto a new MS org.

  Mother in Law:on indemnification: the old phrase, "what's good for the goose is good for the gander" comes to mind

  Matthew Shears:MRT is supposed to be MS

  Mother in Law:and ALAC pushed for it to be MS

  Alan Greenberg (ALAC):Yes, the MRT is MS, but CC is not supposed to be a new MS org.

  Brenden Kuerbis:No, it is not supposed to be a new ICANN (i.e., policy making)

  jaap akkerhuis (SSAC):I have to drop off, bye

  Mother in Law:Right, Brenden, ICANN expands and is complex primarily because of the complexity and buzzy boundaries of policy making and policy implementation via contract. I don't see how Contract Co follows that trajectory

  Matthew Shears:I think this is an important question - MRT and ConCo are one - to get counsel on as well

  Seun:sorry where will the contract co board members be formed from, I mean will they be elected, selected, appointed etc and by whom?

  Avri Doria:In the beginning did people thimg that ICANn had a policy making function?  I wasn't there, so don't know.

  Mother in Law:Alan, whether MRT is the board or not it will still tell the Contract Co what to do, right?

  Avri Doria:... did people think ...

  Mother in Law:Avri, by "beginning" you mean 1998-1999?

  Avri Doria:yeah

  Matthew Shears:I don't agree Alan - MRT role is still operator review and potentially operator change, etc.

  Mother in Law:We all knew it was making policy, yes.

  Brenden Kuerbis:@Avri My understanding is no, it was "purpose built" for IANA functions. But then it assumed naming policy making organ (DNSO)

  Mother in Law:That's why we had constituencies reflecting policy interest groups (IP, BC, ISPs, NC, etc)

  Avri Doria:ok, i did not know if it had all that at day 0.  thanks for the answer.

  Mother in Law:right, once ICANN "took over" or integrated itself into defining and supporting the DNSO, it became a policy making organ. And that happened very fast, in Singapore in 1999

  Avri Doria:so day 1 not day 0

  Alan Greenberg (ALAC):@Mother, and those stakeholders will now be the CC Board.

  Mother in Law:Alan, I think you are raising a significant issue - whether MRT is the board or not - but I don't see why it can't be thought through and solved.

  Mother in Law:i dont accept the idea that making the board turns it into another ICANN, though, because the mission is so limited and so different

  Seun:Thanks and bye

  Avri Doria:dont professional board members get paid?

  Avri Doria:Well it indicates the need for Budget. and Budget may be larger than symbolic.

  Olivier Crepin-Leblond 2:isn't all of this going to add on costs? First we're told: as slim and small and uninteresting as possible and now we're speaking of having Board members that will be retributed?

  Matthew Shears:We should avoid this complexity if posible

  Avri Doria:who pays, the IFO?

  Martin Boyle, Nominet:I prefer them to be paid and independent that pro bono and with vested interests

  Martin Boyle, Nominet:But Avri's question needs to be addressed

  Donna Austin, RySG:could they be selected by the NomCom and be done on a volunteer, unpaid basis.

  Avri Doria:Donna, sure.  Picked by which Nomcom, ICANN's?

  Donna Austin, RySG:yes ICANN's NomCom

  Sivasubramanian M:he proposed design is that the ContactCo Board REPORTS to the MRT.  Reporting to is not the same as being Accountable

  Alan Greenberg (ALAC):[5:16:09 PM] Alan Greenberg: @Avri, IFO is only one with money, they pay for everything. Well, directly, Ultimately gTLD registrants will pretty much pay for everything.

  Martin Boyle, Nominet:No, but they will need to assess the instructions from MRT, won't they?

  Martin Boyle, Nominet:@Alan:  cctld registrants do, too

  Alan Greenberg (ALAC):@Martin, those who choose...

  Olivier Crepin-Leblond 2:+1 Martin -- and what about the annual accounts for Contract Co?

  Mother in Law:good there be a role for CSC in this?

  Martin Boyle, Nominet:should have said enforcing the contract, not policing:  sorry

  Martin Boyle, Nominet:@Alan:  those are the big ones

  Mother in Law:Donna if ICANN's Nomcomm picks the MRT there is a conflict of interest and it is not independent of ICANN, no?

  Matthew Shears:I would be uncomfortable with the MRT coming via the NomComm

  Martin Boyle, Nominet:@Milton:  yes, not an independent pool

  Martin Boyle, Nominet:@Matthew:  fully agree.  I'd even be inclined to see all involved in the CWG to be ineligible

  Donna Austin, RySG:@Milton--yes I guess it is, but the NomCom is supposed to be independent of ICANN.

  Donna Austin, RySG:or is that just independent of the ICANN Board

  Alan Greenberg (ALAC):If it had a web site and domain name, it could join the NCSG.

  Matthew Shears:outrageous editorial!

  Avri Doria:only the other part of civl society

  Sivasubramanian M:Does any one has the link to the editorial ?  I missed that

  Sivasubramanian M:Thank you Mathew

  Mother in Law:its ok

  Matthew Shears:yes Greg - and legal opinion on combined MRT/Conco option

  Mother in Law::-)

  Avri Doria:30-60 cm

  Cheryl Langdon-Orr 2:Travel safe if you re going into bad weather guys...   Thanks  All...Bye for now

  Grace Abuhamad:Meetings recap here: https://icann-community.atlassian.net/wiki/spaces/gnsocwgdtstwrdshp/pages/98468107/Meetings

  Allan MacGillivray:I hope to hear all of you at the RFP3b call tomorrow.

  Avri Doria:thuder snow

  Olivier Crepin-Leblond 2:Wow -- that's going to be pretty severa. Stay safe everyone!

  Matthew Shears:thanks Greg! bye all

  Avri Doria:thunder snow storm. 

  Avri Doria:bye

  Sivasubramanian M:Thank you Bye

  Martin Boyle, Nominet:thanks all

  Graeme Bunton:Thanks all

  Martin Boyle, Nominet:bye

  Brenden Kuerbis:thanks, Bye all

  Bernard Turcotte - staff support:bye

  Mother in Law:bye.

  Martin Boyle, Nominet:and "enjoy" the snow