<html><body><font face="Tahoma" size="2"><div><font size="2">Thato,</font></div><div><br></div><div><font size="2">Thanks for laying out some of the decision issues that NCSG might want to comment on. As one of the participants in the construction of the Proposed Final Report I have said that I will not offer suggestions but will answer questions, and expand where things look unclear or confusing. I would like to add two comments, one dealing with what I think was a typo on your part. <br></font></div><div><font size="2"><br></font></div><div><font size="2">You write: "</font><i>This call for community comment on the final recommendations of New gTLD
Auction Proceeds will determine how these Auction Proceeds are
replenished,...</i>" I think you meant to write how these Auction Proceeds are allocated. While some of us thought about schemes to replenish the funds, all through the writing of the Report the assumption has been that the funds are finite, will not be replenished, and hence the need for a "sunset strategy". Comments should assume that we are talking about a finite initial endowment in a mechanism that includes a sunset strategy. <br></div><div><br></div><div>Second, just for clarity. While ICANN did withdraw funds ($30 Million as I recall) from the New gT:D Auction Proceeds to help rebuild the ICANN Reserve Fund, the new financial plan and budgets documents make it clear that there will be no more Reserve Fund drawn downs on the Auction Proceeds. The rebuilding of the Reserve Fund will come from annual operating revenues. <br></div><div><br></div><div>Sam Lanfranco<br></div><font size="2" face="Tahoma"><font size="2" face="Tahoma"><font size="2" face="Tahoma"><font size="2" face="Tahoma"><!--[if gte mso 9]><xml>
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<![endif]--></font></font></font></font><br><blockquote style="border-left: solid 2px #000000; margin-left: 5px; padding-left: 5px">---- Original Message ----<br><b>From</b>: Thato Mfikwe <thatomfikwe@GMAIL.COM><br><b>To</b>: NCSG-DISCUSS@LISTSERV.SYR.EDU<br><b>Sent</b>: Tue, Jan 14, 2020, 9:23 AM<br><b>Subject</b>: NCSG Comment on Proposed Final Report of the New gTLD Auction Proceeds Cross Community Working Group<br><br><div dir="ltr"><div>Dear members,</div><div><br></div><div>This is just a call to everyone for discussion and input into the NCSG comment on the<a onclick="return checkLinkHref(this.href);" target="_blank" href="https://www.icann.org/en/system/files/files/proposed-new-gtld-auction-proceeds-final-23dec19-en.pdf"> final recommendations on New gTLD Auction Proceeds</a>. It would help if we can have editors on the document to support <a onclick="return checkLinkHref(this.href);" target="_blank" href="https://docs.google.com/document/d/1eyGGPIFFMhVbEpIZQexgXkKO67fU33PZfv7G8HVY6_c/edit">our comment</a>.</div><div><br></div><div>This call for community comment on the final recommendations of New gTLD Auction Proceeds will determine how these Auction Proceeds are replenished, we there for request the community to help answer the following 3 questions:</div><div><br></div><div>
<span style="font-size:11pt;font-family:Arial;color:rgb(0,0,0);background-color:transparent;font-weight:400;font-style:normal;font-variant:normal;text-decoration:none;vertical-align:baseline;white-space:pre-wrap" id="m_-7763273319424853042m_-6222980053512391307m_-1472183625192588262gmail-docs-internal-guid-8ecc4b1b-7fff-2384-a95f-ac6f72a4ff89">1. Do you support the CCWG's recommendation in relation to the preferred mechanism(s)? If no, please provide your rationale for why not.</span></div><div><br></div><div>2.
<span style="font-size:11pt;font-family:Arial;color:rgb(0,0,0);background-color:transparent;font-weight:400;font-style:normal;font-variant:normal;text-decoration:none;vertical-align:baseline;white-space:pre-wrap" id="m_-7763273319424853042m_-6222980053512391307m_-1472183625192588262gmail-docs-internal-guid-ca110442-7fff-ae8e-dd2c-35bfc5f03b68">Do you have any concerns about the updates the CCWG has made, as listed above, in response to the Public Comment forum? If yes, please specify what changes concern you and why?</span></div><div><br></div><div>3.
<span style="font-size:11pt;font-family:Arial;color:rgb(0,0,0);background-color:transparent;font-weight:400;font-style:normal;font-variant:normal;text-decoration:none;vertical-align:baseline;white-space:pre-wrap" id="m_-7763273319424853042m_-6222980053512391307m_-1472183625192588262gmail-docs-internal-guid-11f149ab-7fff-1006-bc46-5005079648c4">Is there any further information you think the CCWG should consider, that it hasn't considered previously, in order to finalize its report for submission to the Chartering Organizations?</span> <br></div><div><br></div><div><br></div><div>NCSG submitted a comment on the initial report and it seems like based on the final report, a majority of communities AC's, SO's and substructures, favoured Mechanism A and B, leaving Mechanism C out of 3 possible options for the replenishment of New gTLD Auction Proceeds.</div><div><br></div><div><b>Question 1 (Preferred mechanism)</b><br></div><div><i>NCSG preferred Mechanism C according to the initial <a onclick="return checkLinkHref(this.href);" target="_blank" href="https://community.icann.org/download/attachments/79429792/Initial%20Report%20of%20the%20New%20gTLD%20Auction%20Proceeds%20Cross-Community%20Working%20Group%20-%20NCSG%20comment.pdf?version=2&modificationDate=1546455158000&api=v2">NCSG comment in December 2018</a>, which was an independent ICANN Foundation with its own Board of Directors.</i></div><div><br></div><div>Understandably so, autonomy needs to be exercised and upheld in order to ensure integrity in decision making as opposed to current accountability and transparency issues and discrepancies that emerge from time to time within ICANN the organisation.</div><div><br></div><div>Based on the final 2 options, after shortlisting and according to the final report under review, <b>it seems like Mechanism B is better as it involved an external organisation which will work with ICANN to replenish these funds. </b><br></div><div><br></div><div>Option A, IMO, is not viable as it compromises independence in decision making, where ICANN might be required to open a new department that will deal solely on replenishments of Auction Proceeds reporting directly to the CEO and Board.</div><div><br></div><div><br></div><div>Mechanisms in summary under review:</div>
<div><font size="2"><span style="font-family:sans-serif"><b>Mechanism A:</b> </span><span style="font-family:sans-serif">An internal department dedicated to </span><span style="font-family:sans-serif">the </span><span style="font-family:sans-serif">allocation of au</span><span style="font-family:sans-serif">ction proceeds is</span><span style="font-family:sans-serif"> </span><span style="font-family:sans-serif">created within the ICANN organization</span><span style="font-family:sans-serif"></span><span style="font-family:sans-serif"></span><span style="font-family:sans-serif">.</span></font></div><div><font size="2"><span style="font-family:sans-serif"><br></span></font></div><div><font size="2"><span style="font-family:sans-serif"></span><b><span style="font-family:sans-serif">Mechanism B</span></b><span style="font-family:sans-serif">:</span><span style="font-family:sans-serif"> An </span><span style="font-family:sans-serif">i</span><span style="font-family:sans-serif">nternal </span><span style="font-family:sans-serif">department</span><span style="font-family:sans-serif"> dedicated to the allocation of auction proceeds is </span><span style="font-family:sans-serif">created within the ICANN organization which collaborates</span><span style="font-family:sans-serif"> with an existing non</span><span style="font-family:sans-serif">-</span><span style="font-family:sans-serif">profit.</span><span style="font-family:sans-serif"><br></span></font></div><div><font size="2"><span style="font-family:sans-serif"><br></span></font></div><div><font size="2"><b><span style="font-family:sans-serif">Mechanism C</span></b><span style="font-family:sans-serif"><b>:</b> A new charitable structure (ICANN Foundation) is created which</span><span style="font-family:sans-serif"> is functionally separate</span><span style="font-family:sans-serif"> from ICANN</span><span style="font-family:sans-serif">org</span><span style="font-family:sans-serif">, </span><span style="font-family:sans-serif">which would be responsible for </span><span style="font-family:sans-serif">the allocation of auction proceeds</span><span style="font-family:sans-serif">.</span></font></div><div><font size="2"><span style="font-family:sans-serif"><br></span></font></div>
<div><b>Question 2 (Any other concerns)<br></b></div><div><font size="2"><br></font></div><div>
<font size="2"><span style="font-family:sans-serif">A criteria was developed to evaluate different </span><span style="font-family:sans-serif">mechanisms, namely:</span><span style="font-family:sans-serif"><br></span></font></div><div><font size="2">- <span style="font-family:sans-serif">Efficiency and effectiveness</span><span style="font-family:sans-serif"><br></span></font></div><div><font size="2"><span style="font-family:sans-serif">- </span><span style="font-family:sans-serif">Cost</span><span style="font-family:sans-serif">-</span><span style="font-family:sans-serif">effectiveness of setting up the mechanism (most value for money)</span><br></font></div><div><font size="2"><span style="font-family:sans-serif">- Cost</span><span style="font-family:sans-serif">-</span><span style="font-family:sans-serif">effectiveness of running the mechanism (e.g. overhead, oper</span><span style="font-family:sans-serif">ating costs)</span></font></div><div><font size="2"><span style="font-family:sans-serif">- </span><span style="font-family:sans-serif"></span><span style="font-family:sans-serif">Ability to sunset (i.e. terminate / close down)</span></font></div><div><font size="2"><span style="font-family:sans-serif"></span><span style="font-family:sans-serif"></span><span style="font-family:sans-serif">- Ease of setting up in terms of time and effort</span></font></div><div><font size="2"><span style="font-family:sans-serif"></span></font><font size="2"><span style="font-family:sans-serif"></span></font></div><div><font size="2"><span style="font-family:sans-serif">- </span><span style="font-family:sans-serif"></span><span style="font-family:sans-serif">Ability to meet legal and fiduciary requirements</span><br></font></div><div><font size="2"><span style="font-family:sans-serif">- Enabling ICANN stakeholder engagement</span><span style="font-family:sans-serif"><br></span></font></div><div><font size="2"><span style="font-family:sans-serif">- </span><span style="font-family:sans-serif">Efficient means for fund allocation from selection to </span><span style="font-family:sans-serif">fund distribution for projects</span></font></div><div><font size="2"><span style="font-family:sans-serif">- </span><span style="font-family:sans-serif">Administrative complexity to run</span><span style="font-family:sans-serif"><br></span></font></div><div><font size="2"><span style="font-family:sans-serif">- </span><span style="font-family:sans-serif">Means for oversight</span><br></font></div><div><font size="2"><span style="font-family:sans-serif">- Providing transparency and accountability</span><span style="font-family:sans-serif"><br></span></font></div><div><font size="2"><span style="font-family:sans-serif">- </span><span style="font-family:sans-serif">Equipped to operate and execute globally distributed projects</span><span style="font-family:sans-serif"><br></span></font></div><div><font size="2"><span style="font-family:sans-serif">- </span><span style="font-family:sans-serif">Balance of control between ICANN </span><span style="font-family:sans-serif">org </span><span style="font-family:sans-serif">and independence of fund alloca</span><span style="font-family:sans-serif">tion</span><span style="font-family:sans-serif"><br></span></font></div><div><font size="2"><span style="font-family:sans-serif">- </span><span style="font-family:sans-serif">Risk</span></font>
</div><div><br></div><div>According to NCSG initial comment the role of the community has not been clearly articulated during the allocation and distribution of Auction Proceeds. <br></div><div><br></div><div><b>Question 3 (Any other considerations)<br></b></div><div>From me, I would propose that Mechanism A be completely removed and we remain with only B & C, as both options promise independence in the allocation of Auction Proceeds.</div><div><br></div><div>Your input will be highly appreciated, thanks.<br></div><div><br></div><div>Thato Mfikwe.<br></div><div><br></div><div><br></div><div><span style="font-size:11pt;font-family:Arial;color:rgb(0,0,0);background-color:transparent;font-weight:400;font-style:normal;font-variant:normal;text-decoration:none;vertical-align:baseline;white-space:pre-wrap" id="m_-7763273319424853042m_-6222980053512391307m_-1472183625192588262gmail-docs-internal-guid-8ecc4b1b-7fff-2384-a95f-ac6f72a4ff89"></span>
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