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

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

-----Original Message-----
From: Cochetti, Roger 
Sent: Tuesday, March 06, 2001 10:27 AM
To: 'DNSO budget'
Cc: McAllister, Athena
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.