NCSG Comment on Proposed Final Report of the New gTLD Auction Proceeds Cross Community Working Group

[Sam Lanfranco]

Thato,
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.

You write: "This call for community comment on the final recommendations of
New gTLD Auction Proceeds will determine how these Auction Proceeds are
replenished,..." 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.  
Second, just for clarity. While ICANN did withdraw funds (S30 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. 
Sam Lanfranco

---- Original Message ----
From: Thato Mfikwe 
To: NCSG-DISCUSS at LISTSERV.SYR.EDU
Sent: Tue, Jan 14, 2020, 9:23 AM
Subject: NCSG Comment on Proposed Final Report of the New gTLD Auction
Proceeds Cross Community Working Group
Dear members,
This is just a call to everyone for discussion and input into the NCSG
comment on the final recommendations on New gTLD Auction Proceeds
(https://www.icann.org/en/system/files/files/proposed-new-gtld-auction-proceeds-final-23dec19-en.pdf).
It would help if we can have editors on the document to support our comment
(https://docs.google.com/document/d/1eyGGPIFFMhVbEpIZQexgXkKO67fU33PZfv7G8HVY6_c/edit).
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:
 1. Do you support the CCWG's recommendation in relation to the preferred
mechanism(s)? If no, please provide your rationale for why not.
2. 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?
3. 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? 
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.
Question 1 (Preferred mechanism)

NCSG preferred Mechanism C according to the initial NCSG comment in
December 2018
(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),
which was an independent ICANN Foundation with its own Board of Directors.
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.
Based on the final 2 options, after shortlisting and according to the final
report under review, it seems like Mechanism B is better as it involved an
external organisation which will work with ICANN to replenish these funds. 
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.
Mechanisms in summary under review: 
Mechanism A: An internal department dedicated to the allocation of auction
proceeds is created within the ICANN organization.
Mechanism B: An internal department dedicated to the allocation of auction
proceeds is created within the ICANN organization which collaborates with
an existing non-profit.
Mechanism C: A new charitable structure (ICANN Foundation) is created which
is functionally separate from ICANNorg, which would be responsible for the
allocation of auction proceeds.
Question 2 (Any other concerns)
 A criteria was developed to evaluate different mechanisms, namely:

- Efficiency and effectiveness

- Cost-effectiveness of setting up the mechanism (most value for money)

- Cost-effectiveness of running the mechanism (e.g. overhead, operating
costs)
- Ability to sunset (i.e. terminate / close down)
- Ease of setting up in terms of time and effort

- Ability to meet legal and fiduciary requirements

- Enabling ICANN stakeholder engagement

- Efficient means for fund allocation from selection to fund distribution
for projects
- Administrative complexity to run

- Means for oversight

- Providing transparency and accountability

- Equipped to operate and execute globally distributed projects

- Balance of control between ICANN org and independence of fund allocation

- Risk 
According to NCSG initial comment the role of the community has not been
clearly articulated during the allocation and distribution of Auction
Proceeds. 
Question 3 (Any other considerations)

>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.
Your input will be highly appreciated, thanks.
Thato Mfikwe.
 
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