[nc-budget] RE: DRAFT REPORT OF THE NAMES COUNCIL BUDGET COMMITTEE TO THE NAMES COUNCIL

["Cochetti, Roger" <RCochetti@verisign.com>]

 Having received no responses to my attached note/draft report of the Budget
Committee, I am concerned that it may not have been sent/received.  Could
you confrim receipt of the draft report so I can confidently send it out?

-----Original Message-----
From: Cochetti, Roger
To: 'DNSO budget'
Cc: McAllister, Athena
Sent: 3/6/01 10:27 AM
Subject: DRAFT REPORT OF THE NAMES COUNCIL BUDGET COMMITTEE TO THE NAMES
COUNCIL

My apologies for not getting this draft report to the Names Council out
to you sooner.  If you can provide comments on it to me by Thursday, I
will get it to the Council promptly thereafter.  (Whenever possible, for
our future meetings, I'm going to ask Athena McAllister to join us as
the scribe so we don't encounter reporting delays caused by me.)

Three other matters on which to report:

First, as we agreed in January, I've sent the two proposals for
non-profit organizations that would administer DNSO voluntary funds that
we have received to ICANN management for their comment.  My transmittal
is as follows:

--------------------

Louis Touton, General Counsel
ICANN
Louis-

In order to administer the voluntary funds that the Budget Committee
expects to raise, we have explored the possibility of creating a
non-profit corporation that would serve as the host for these funds.  

Two separate proposals fro such anon-profit corporation have been
received by the Budget Committee, and we would like any comments that
you might have on both of them.

Attached is a proposal from AFNIC for a corporation that would be
established under French Law 1901.

Under separate cover, I am sending you a proposal for a Delaware
corporation that was developed for discussion purposes, by outside
counsel to VeriSign.

Thanks for your input.

Roger

---------------------

Second, I have inquired with ICANN management on any follow up
activities that they have undertaken on either the collection of 2001
DNSO dues or the implementation of a re-bid of the DNSO Website/Listserv
activities.  My note follows:

---------------------

Louis-

There are a few administrative loose ends that arise form the Council's
recent approval of the CY 2001 budget for the DNSO, most importantly,
sending out invoices to the DNSO Constituencies and
collecting/depositing the funds.  Second, receiving the invoice from
AFNIC and making payment to them.  

An important third matter is administering the re-bidding of the DNSO
Website/listserv activity.  The 2001 budget provides funds for this
purpose, including funds for a consultant to oversee the process,
however, someone needs to retain/oversee the consultant.

Have you taken any action on any of these or do you have any thoughts on
them?

Also, could you provide the Budget Committee with an updated account for
the DNSO income and expenses?

Thanks,

Roger 

-------------------- 

I'll share any responses I receive.


--------------------




Third, while I don't think there is any pressing reason to do so, I'd
like to propose that we have a brief meeting of the Committee in
Melbourne.  We have been stuck on the question of how to administer the
voluntary funds and as long as we have not reached agreement on the
administrative vehicle, we cannot begin the fund raising effort.  So I'd
like to see if we can find a solution that enjoys wide support.

My suggestion is that we meet on Sunday evening, March 11th, from 7:00
until 8:30 PM.  Please let me and Athena know if that would work for
you. 


========================================================================
==================================================


DRAFT REPORT

The Names Council Budget Committee met twice since our last report and
in these meetings focused on its own procedures and on the question of
procedures to address the failure of DNSO Constituencies to pay their
assessed dues.

Regarding the procedures of the Budget Committee, the Committee decided
that its meetings should not be routinely open, but rather should be
open to members of the Committee and any member of the Names Council who
would like to observe.  The Committee reached this conclusion because:
(1) it often discusses financially sensitive information; (2) members
felt that the work of the Committee would benefit greatly by an
atmosphere in which innovative ideas could be floated; and most
importantly, (3) all of the Committee's reports to the Council and
actions by the Council are publicly accessible.

Regarding procedures to address the failure of DNSO Constituencies to
pay their assessed dues, the Committee discussed this matter during
three different meetings and in its January meeting agreed to propose to
the Council the following procedures:

>From the date that invoices are mailed/e-mailed to representatives of
Constituencies, if payment is not received by the DNSO or its agent by:

** 30 days, the Constituency is sent a reminder letter and another
invoice

** 60 days, the Constituency is sent a delinquency notice and the
delinquency notice is posted on the DNSO Website

** 90 days, the Constituency is sent a "show cause notice" (in which
they are asked to show cause as to why their voting rights in the Names
Council should not be suspended) and they are charged a 5% late payment
fee to cover the cost to the DNSO of the cost of money.  The 5% penalty
is added to that Constituency's dues for the next (not the current) DNSO
budget year.

** 120 days, the Constituency is sent a "final notice to pay" and
charged an additional 5% late payment fee, which is also due as a added
payment for their next year's DNSO dues

** 180 days, the voting rights, but not the right to participate, of
that Constituency's representatives to the Names Council are suspended
until such time as the DNSO or its agent receives all past due amounts
including the varies late payment fees.


These procedures are designed to conform with the attached sections of
the ICANN Bylaws and provide progressively greater pressure on
Constituencies that fail to pay their DNSO dues in a timely way.  They
are also designed to ensure that Constituencies that pay promptly do not
subsidize those who pay late or very late by imposing late payment fees
on late or very late payers.   


-----------------------------



Section 2. THE NAMES COUNCIL

(a) The NC shall consist of representatives, selected in accordance with
Section 3(c) of this Article, from each Constituency recognized by the
Board pursuant to the criteria set forth in Section 3 of this Article.

(b) The NC is responsible for the management of the consensus building
process of the DNSO. It shall adopt such procedures and policies as it
sees fit to carry out that responsibility, including the designation of
such research or drafting committees, working groups and other bodies of
the GA as it determines are appropriate to carry out the substantive
work of the DNSO. Each recognized Constituency shall be invited to
participate in each of such bodies. Each of such bodies shall provide
appropriate means, as determined by the NC, for input and such
participation as is practicable under the circumstances by other
interested parties. Any reports or recommendations presented to the NC
by such bodies shall be posted on a web site accessible by the public
for public review and comment; absent clear justification, which shall
be publicly stated at the time of any action, the NC shall not act on
any report or recommendation until a reasonable time for public comment
has passed and the NC has reviewed and evaluated all public comments
received. The NC is responsible for ensuring that all responsible views
have been heard and considered prior to a decision by the NC.

(c) Constituencies or GA participants may propose that the NC consider
domain name policies or recommendations. If the NC undertakes
consideration of a domain name topic, or if a Constituency so requests,
the NC shall designate one or more research or drafting committees, or
working groups of the GA, as appropriate to evaluate the topic, and
shall set a time frame for the report of such committee or working
group. Following the receipt of a report or recommendation from such a
body, the NC may accept the report or recommendation for submission to
the Constituencies for comment and consultation, or return the report or
recommendation to the body from which it originated for further work.
After the report or recommendation is submitted to the Constituencies
and the comment period for the Constituencies has expired, the NC shall
evaluate the comments to determine whether there is a basis for a
consensus recommendation to the Board.

(d) If two-thirds (2/3) of the members of the NC determine that the DNSO
process has produced a community consensus, that consensus position
shall be forwarded to the Board as a consensus recommendation, along
with all materials or other information that could reasonably be
relevant to the Board's review of that determination, including (but not
limited to) the dissenting statement(s) of any member(s) of the NC. If
more than one-half (1/2) but less than two-thirds (2/3) of the members
of the NC determine that the DNSO process has produced a community
consensus, that position may be forwarded to the Board as a NC
recommendation, along with statements of majority and minority views,
and any separate or dissenting statement(s) of any member(s) of the NC.
Any proposed recommendation that is not supported by an affirmative vote
of one-half (1/2) of the members of the NC may be returned to the body
from which it originated, or may be assigned to a new body, for further
work. In such a case, the NC may report to the board the lack of a
consensus and the steps, if any, it plans to take from this point
forward with respect to this particular recommendation. The NC is
responsible for ensuring that the Board is informed of any significant
implementation or operational concerns expressed by any responsible
party.

(e) The NC shall forward to the Board, from among those persons
nominated by the GA, its selection(s) for the Director(s) to fill any
open Board position(s) reserved for the DNSO. Any such selection(s) must
have the affirmative votes of at least one-half (1/2) of all the members
of the NC. At any given time, no two Directors serving on the Board
selected by the NC shall be citizens of the same country or of countries
located in the same Geographic Region.

(f) Unless shortened by the Board in its recognition of a Constituency,
the term of office for each member of the NC shall be two years.

(g) No more than one officer, director or employee of a corporation or
other organization (including its subsidiaries and affiliates) shall
serve on the NC at any given time.

(h) Meetings of the NC may be held (i) in person or via teleconference,
at the discretion of the NC, so long as all members of the NC
participating can speak to and hear one another or (ii) via electronic
video screen communication or other communication equipment; provided,
that (a) all members of the NC participating in such a meeting can speak
to and hear one another, (b) all members of the NC are provided the
means of fully participating in all matters before the NC and (c) the NC
adopts and implements means of verifying that (x) a person participating
in such a meeting is a member of the NC or other person entitled to
participate in the meeting and (y) all actions of, or votes by, the NC
are taken or cast only by the members of the NC or other persons
entitled to cast votes. A majority of the total number of NC members
then in office shall constitute a quorum for the transaction of
business, and the act of a majority of the NC members present at any
meeting at which there is a quorum shall be the act of the NC, unless
otherwise provided herein. Advance notice of such meetings shall be
posted on a web site that is available for public access and, if
reasonably practicable, at least 14 days in advance of the meeting.
Except where determined by a majority vote of members of the NC present
that a closed session is appropriate, meetings shall be open to physical
or electronic attendance by all interested persons. The NC shall post
minutes of its meetings to a web site that is available for public
access as soon as practicable following the meeting, and no later than
21 days following the meeting.

(i) The NC shall elect the Chairman of the GA annually.

(j) Administrative and operational costs of the DNSO shall be funded by
DNSO participants in a manner to be determined by the NC, consistent
with Section 4(c) below.

Section 3. THE CONSTITUENCIES

(a) Each Constituency shall self-organize, and shall determine its own
criteria for participation, except that no individual or entity shall be
excluded from participation in a Constituency merely because of
participation in another Constituency, and constituencies shall operate
to the maximum extent feasible in an open and transparent manner and
consistent with procedures designed to ensure fairness. The Board shall
recognize a Constituency (including the initial Constituencies described
in (b) below) by a majority vote, whereby the Constituency shall be
deemed to exist for purposes of these Bylaws.

(b) The initial Constituencies shall consist of (in alphabetical order):

1. ccTLD registries;

2. commercial and business entities;

3. gTLD registries;

4. ISP and connectivity providers;

5. non-commercial domain name holders;

6. registrars; and

7. trademark, other intellectual property and anti-counterfeiting
interests.

(c) Each Constituency shall select up to three individuals to represent
that Constituency on the NC, no two of whom may be citizens of the same
Geographic Region, as defined in Article V, Section 6, except that, with
the consent of the Board, this latter requirement may be suspended for
the term of a particular individual upon a showing that it is
impracticable for the Constituency to obtain such geographic diversity.
Any such waiver shall be granted only upon a commitment by the
constituency to a substantive plan to diversify its membership, thereby
minimizing the likelihood of the need for future waivers from the Board.
Notwithstanding the foregoing, no Constituency may have more
representatives on the NC than there are members of the Constituency.

(d) Any group of individuals or entities may petition the Board for
recognition as a new or separate Constituency. Any such petition will be
posted for public comment pursuant to Article III, Section 3. The Board
may create new Constituencies in response to such a petition, or on its
own motion, if it determines that such action would serve the purposes
of the Corporation. In the event the Board is considering acting on its
own motion it shall post a detailed explanation of why such action is
necessary or desirable, set a reasonable time for public comment, and
not make a final decision on whether to create such new Constituency
until after reviewing all comments received. Whenever the Board posts a
petition or recommendation for a new Constituency for public comment, it
will notify the names council and will consider any response to that
notification prior to taking action.