ALAC Statement on Draft FY12 Operating Plan and Budget
ICANN Policy for Comment : http://www.icann.org/en/public-comment/#op-budget-fy12
Summary of AC/SO Budget Requests : http://forum.icann.org/lists/op-budget-fy2012/pdfUNwycLKGih.pdf
Google Doc : https://docs.google.com/document/d/114VVRkBq2kQKInfkgGWM3qhcXsUR6Bb17GXDhURYuyc/edit?hl=en_GB&authkey=CMjwrcII
Each RALO has been asked to summarize its own thoughts on the Draft FY12 Operating Plan and Budget. These summaries can be found on these pages:
AFRALO comment on Draft FY12 Operating Plan and Budget
APRALO comment on Draft FY12 Operating Plan and Budget
EURALO comment on Draft FY12 Operating Plan and Budget
LACRALO comment on Draft FY12 Operating Plan and Budget
NARALO comment on Draft FY12 Operating Plan and Budget
ALAC Statement on the draft FY12 Operational Plan and Budget
The ALAC recognizes the great improvement within ICANN's operational planning and budget preparation processes, and highly appreciates the interaction that the staff has had with the community at all stages of that process.
As for the substance, the ALAC is glad that the draft FY12 Operational Plan and Budget has been presented with sufficient explanation and details in order to allow for deep discussion and comments.
Nevertheless, the ALAC wants to make the following remarks:
1) In the draft FY12 Budget and Strategic Plan, paragraph 4.7 regarding community support describes, comprehensively, the process of dealing with the additional service requests from ICANN constituencies, but it does not explain how these requests were treated and decided upon by the staff.
As far as At-Large is concerned, most of the limited resources allocated do not cover the projects applied for. At-Large applied for these projects, not for money. Hence, by replacing the funding pf a RALO General Assembly (GA) with six additional travel support slots will not, for example, allow the GA to be held.
And, yet, the links between the projects applied for and ICANN's Strategic Plan were clearly established in At-Large's proposals. At-Large had even applied for some of these projects last year, when they met with wide support -- althought we were told that they would have a better chance to be funded in FY12 Budget.
Now, with the FY12 Budget in draft form, the ALAC is still asking for the funding of these same projects. In addition, for those projects that can not be funded, we are asking for clear explanations of why they have been rejected or postponed. Finally, we request a formal statement of when the non-funded projects will, in fact, be funded.
2) In paragraph 4.8 regarding policy development support, there is a provision allocating resources for the implementation of improvements requested by the ALAC, consisting, inter alias, of support during 2010-13 for one General Assembly (GA) for each of the five Regional At-Large Organizations (RALOs), held in conjunction with either an ICANN or key regional Internet stakeholder meeting in order to set priorities and develop strategies for improving participation, including capacity-building programs.
Since no support for GA was budgeted in the first year (FY11) of this period, At-Large had expected resources allocated for at least two GAs in FY12, but unfortunately none has, in fact, been funded in the current draft budget.
3) The At-large Community was the only ICANN entity to specifically request funding to support the strategic objective of participation in Internet governance dialogues -- specifically in the Internet Governance Forum (IGF).
A workshop organized at the IGF by an ICANN community constituencies would have a much larger effect in showcasing the ICANN multi-stakeholder bottom-up process than would any official speech. The success of the AFRALO workshop held in Vilnius last year (without any ICANN support) demonstrates this clearly. The ALAC thinks that such request deserves to be funded.
4) In the new gTLD program budget, we did not see any provision for the support of the applicants needing assistance in applying for and/or operating a new gTLD, as per ICANN Board resolution 20 made in Nairobi. The ALAC thinks that a reasonable percentage of the application fees recovered by ICANN should be allocated to this support.
5) Outreach plans, using media (e.g., podcasts to countries/jurisdictions without ALSes) were rejected, with the reasoning that any action should be deferred until the Public Participation Committee (PPC) has the opportunity to develop an overall outreach plan for all constituency and stakeholder groups. We strongly suggest that At-Large be included in the development of this overall outreach plan to ensure its success.
6) The ICANN Developing Countries Summit is planned to take place in Dakar, during the ICANN 42nd International Meeting. While the ALAC welcomes such an initiative to promote the developing countries' participation in the ICANN process, and especially in its policy development, it notices that no financial provision has been dedicated to this very important event. The ALAC believes that resources should be allocated to such an event, if this allocation has not already been made. And if the allocation has been made, we would like to know which item within the draft budget includes it.
7) While the ALAC recognizes the ICANN efforts in the translation field to increase translated documents and maintain a multilingual ICANN blog, it notices with concern that no improvement in the interpretation field is expected. The quality of the interpretation is sometimes unacceptable, and all the working groups are working in English only, which prevents the non-English speakers from participating. The impact of such a situation is that these non-English speakers cannot fully participate in the policy development process. The ALAC considers this issue a priority for an international organization that boasts of being inclusive and multi-stakeholder with a bottom-up decision making system.
8) The registry fees for the 18 existing gTLDs do not follow any rule and show an arbitrary way of charging registries. Some do not pay the fixed fees, while others do not pay the per-transaction fees. In addition, the value of the fixed and the per-transaction fees change from one registry to the next. For example, the dot com does not pay the per-transaction fees, while the dot cat (community TLD) pays the per-transaction fees at one of the highest rates ($1 per transaction), as well as the fixed fees. The ALAC does think that the community not-for-profit TLDs should be charged at a minimum rate, while the lucrative TLDs should be charged normally, according to well-defined rules.
9) Regarding the implementation of impact reporting, we have noted and appreciated the Impact Analysis pertaining to Deployment of DNSSEC in the Root Zone and the document summarizing the Impact of Root Zone Scaling. As ICANN moves forward, we would recommend that ICANN consider additional types of impact reporting, such as the impact of ICANN’s policies on TLD growth in developing countries.
10 Finally, we appreciate the call to fine-tune the determination of the most appropriate level for the Reserve Fund, and we will tender comments on this topic at the earliest opportunity.
Comments
CONCERN #2: Open Entry in Internet-related Markets
With the passage of the Telecommunications Act of 1996, the U.S. Congress created a new legal and policy playing field based on the presumption that competition, open entry, and market forces should, when possible, "regulate" the telecommunications industry. It is in view of this policy backdrop that we note this particular language in the ICANN Articles of Incorporation:
The Corporation shall operate for the benefit of the Internet community as a whole, carrying out its activities in conformity with relevant principles of international law and applicable international conventions and local law and, to the extent appropriate and consistent with these Articles and its Bylaws, through open and transparent processes that enable competition and open entry in Internet-related markets.
While Open Entry is generally defined as the absence (or minimal application) of those provisions that would ordinarily regulate monopoly or near-monopoly situations, within the ICANN context “open entry” takes on a subtle new meaning that obliges the Board, whenever possible, to proactively reduce “barriers to entry”; it is within this context that the at-large community has issues with the ICANN Draft FY12 Operating Plan and Budget.
A budget process can augment existing barriers to entry when key initiatives that are designed to reduce such barriers – such as the new gTLD Joint Applicant Support project [JAS] – are neither anticipated nor accounted for.
While the budget attends to New gTLD Launch Scenarios by detailing certain Final Development Activities, it nowhere references JAS recommendations (and their budgetary implications) either as detailed within Milestone Report #1 or within Milestone Report #2 nor the projected cost to implement the assorted recommendations.
While Staff has planned for some future expenses – such as recommending that $1.0 million be added to the contingency fund to ensure staff work and Board consideration of ATRT Recommendation #5 – it has not planned for JAS-related implementation costs that might be associated with the roll-out of new gTLDs. This is a correctable oversight.
Concern #3: RALO General Assembly Support
The ICANN Draft FY12 Operating Plan and Budget states:
For the ALAC, during the period 2010--2013, support one General Assembly for each of the five Regional At-Large Organizations (RALOs) held in conjunction with either an ICANN or key regional Internet stakeholder meeting in order to set priorities, develop strategies for improving participation, including capacity-building programs, and increase engagement, such as recruiting new At-Large Structures to achieve the goal of at least one At-Large Structure per country worldwide. These community support activities will contribute to a healthy Internet eco-system.
We take note of the fact that the LACRALO formally advised ICANN that it intended to convene a General Assembly in 2012 by way of its application for travel funding. ICANN’s Financial Team responded as follows:
In order to facilitate ALAC's work, ICANN will allocate travel support for up to 6 regional participants, based on a plan from the At-Large on the selection process and the use of the ICANN Constituency Travel team for booking.
In the knowledge that the LACRALO has three dozen member at-large structures (ALSs), the provision of funding for only 6 representatives is a far cry from the General Assembly “support” that the at-large community expects to be accorded. Frankly, all members of our community view this particular ICANN decision as an unparalleled insult that must be addressed in the strongest of terms.
While ICANN has no qualms about fully supporting multiple registry-registrar gatherings throughout the course of the calendar year, it has chosen to only partially support this rarely-held at-large General Assembly initiative. This decision egregiously violates the non-discriminatory treatment clause of the ICANN’s bylaws, and the at-large community will consider filing a formal Reconsideration Request to challenge this ill-considered staff action.
comments from Danny Younger:
CONCERN #1: Special Restricted Funds
Per the organizational Articles of Incorporation, ICANN is organized under the California Nonprofit Public Benefit Corporation Law for charitable and public purposes. As such, it is required to operate pursuant to a set of obligations detailed within sections of the California Code, namely Part 2: NONPROFIT PUBLIC BENEFIT CORPORATIONS [5110 -6910]. Within that code (§ 6321) is the obligation to produce an annual financial report that shall contain in appropriate detail the following:
(1) The assets and liabilities, including the trust funds, of the corporation as of the end of the fiscal year.
(2) The principal changes in assets and liabilities, including trust funds, during the fiscal year.
(3) The revenue or receipts of the corporation, both unrestricted and restricted to particular purposes, for the fiscal year.
(4) The expenses or disbursements of the corporation, for both general and restricted purposes, during the fiscal year.
As ICANN would not deliberately fall afoul of California law, and as ICANN has not reported on the disposition of funds restricted to particular purposes within its Annual Budget Report, one can only conclude that ICANN has never formally established special restricted funds. This is a major concern for the at-large community in that ICANN has previously signaled its “intent” to establish special restricted funds that would accrue to the benefit of developing country stakeholders within clause 7.2 of the .net contract:
Section 7.2 Fees to be Paid to ICANN.
(a) Registry-Level Transaction Fee. Commencing on 1 July 2005, Registry Operator shall pay ICANN a Registry-Level Transaction Fee in an amount equal to US$0.75 for each annual increment of an initial or renewal domain name registration and for transferring a domain name registration from one ICANN-accredited registrar to another during the calendar quarter to which the Registry-Level Transaction Fee pertains. ICANN intends to apply this fee to purposes including: (a) a special restricted fund for developing country Internet communities to enable further participation in the ICANN mission by developing country stakeholders, (b) a special restricted fund to enhance and facilitate the security and stability of the DNS, and (c) general operating funds to support ICANN's mission to ensure the stable and secure operation of the DNS.
The collectible revenues from this single contract are far from insignificant. By way of example, during the fiscal year 2006/7 these transaction revenues totaled $7,535,141 (of which – assuming equal disbursement -- $2,511,714 would have accrued in a special restricted fund to enable developing countries to participate in the ICANN mission).
At issue is not whether ICANN has spent collected funds in an amount commensurate with purposes intended, but rather whether we can trust ICANN to keep its word when it declares intent to establish special restricted funds.
Special restricted funds have a place with non-profit public benefit corporations that comport with strategic objectives. They inure to specific projects and allow for greater overall transparency.
It is the recommendation of the at-large that ICANN modify its current new gTLD Base Contract & Specifications to incorporate the following language:
Registry-Level Transaction Fee. ICANN will apply one third of this fee to a special restricted fund for developing country Internet communities to enable further participation in the ICANN mission by developing country stakeholders.