ICANN Meeting Public Forum, Part I San Juan, Puerto Rico 25 June 2007 >>VINT CERF: Hello. Testing, testing. Here we are. Good morning, ladies and gentlemen. Welcome to the first portion of the public forum this week. This morning we're only going to cover three topics: The president's report, a status report on IDN, and the evaluation of its use, and then the operating plan and budget. But you'll notice, I hope, on the schedule that there are other topic-specific public forum sessions that will be conducted later in the day. The public forum on new gTLDs and the public forum on GNSO improvements. And there will be other opportunities of this type during the course of the week. I want to recognize Susan Crawford, who is the chair of the meetings committee, for having pressed for variations in our format from previous times when we had rather lengthy presentations and generally everyone wanted something short and readable ahead of time. So that's what we're trying to do. The first report from this morning's public forum is the president's report that will be presented by Paul Twomey. So I'll turn the floor over to Paul to make his report. >>PAUL TWOMEY: Thank you, Vint. And good morning to everybody. The -- if I can make -- quickly go into the president's report, there are quite a lot of slides in this report. I'm not going to talk to all of them. But they're there so that we can actually also post them so people who are not in the room can follow them in detail. Is that it? Is this microphone on? This is a very full meeting, the meeting here in Puerto Rico. The strategic plan and operating plan have -- it's being expressed in the budget that's quite a long process. I won't speak to the budget part of this. There will be a session, as you pointed out, that, I think, Doug Brent principally will be speaking to later. Obviously, there's a lot of work in policy development activities. I'll talk briefly about IANA functions, a little bit about accountability frameworks, a little bit about the registrar accreditation policy and process review. A little bit on IDNs. But I don't want to speak in detail because we'll have an IDN session straight after. A little bit about regional at-large organizations, specifically some stuff about accountability and transparency. A brief comment on the President's Strategy Committee, a little bit about the operational review panel that I want to share with you and the community, and a little bit about the Internet Governance Forum. Just to remind people when they have the budget process, the strategic plan was approved in December of 2006, has five main objectives, excellence in operations, in policy development, increased international participation in ICANN, increased participation and efficiency of the ICANN multistakeholder environment, and working towards a post-MOU ICANN. And in 2007-2008, that was updated and there's a proposed budget coming through in March 2007. So we'll talk about that after this. In policy development, I think there's been a lot of work in policy development and I want to issue my congratulations to the community for all the work that's been taking place in the last -- well, last six or nine months, especially in the last three months. I think there's been not only a heightened tempo in the policy work amongst the ICANN constituencies, but I think there's also been a greater efficiency and efficacy of that work. And I'd like to particularly point to things like the new gTLD policy that's been underway. I think the work that's been done on IDNs, in particular, IDN as they might apply to top-level domains associated with territories, that work with the ccNSO and the GAC has been exemplary. The work being done on domain name tasting, for instance, starting the workshop, starting the discussion around, I think that's been very useful. There are other areas there, being done on the ccNSO and ICANN regions, as well as on the top-level domains. It's a very full mix. I won't go through all, it's up there on the screen, because that's a duplicate of what we're going to do during the week. But I want to reinforce, I think this has probably been the most intense policy session that I have seen in the community overall for a couple of years really. And it's also not only been intense, but I think it's actually worked better. I just think I see people in the community, I see lessons learned as to how to engage with each other, which I think is to be applauded. I'd also like to take a chance to thank staff who have been associated with that. I think that we've had the opportunity with some additional resources to be able to meet some of the demands from the constituencies and the community to have further staff support, and I think that staffs support has reached a good balance. Staff is not setting policy. But I do think the staff work has been very useful in actually giving support to the constituencies, helping to draft materials for them to consider, helping them to be able to share. And I think it's also increasingly helping in the communications, the sort of reminders about who we need to communicate with in the work we're doing. So I think, again, we are in a strong position at the moment and it will be interesting to see how the work progresses during this week. Just briefly on the IANA, just to update particularly on root zone changes, focus on the root zone, because it tends to be the most visible piece of the work for some parts of the community for the IANA. But I would point out that they keep literally hundreds of different registries up to date on a daily basis. Root zone requests, this is the queue size from June 2006 to May 2007, the basic message is that the request numbers are increasing, so we're seeing a trend of increases on requests. And in terms of performance, the averages and the medians and mean numbers still seem to be -- We're now down in single-digit numbers and they've reached a plateau, which I think has been very -- as an overall, I think it's a good number. The second area that I think -- I just want to point out is the maximum number here. The maximum processing times, you'll see there's a big spike at the end of the reporting period here. I want to talk about this spike not in specifics, but just to share it, because it's an interesting example of how the IANA function works. This is a redelegation request from a particular part of the world. And a key part of the way in which we handle these requests and very much to try to ensure that the people in the local community have come to a common consensus about what they wish to achieve. In this particular instance, the local community was split right down the middle. And so we kept the pressure and the IANA staff kept the pressure on the regional liaisons working with the community to say that we prefer there is a local solution that comes to people's common suggestion. Eventually, at the time they did actually come to a common position. And we have actually closed this ticket, because there's no longer a need for the redelegation in the eyes of the people who have been moving for it. So there's an example of a period of time -- some of these outliers we do receive where a good outcome might actually take quite a long time in terms of the ticket time for its conclusion. We continue to work on accountability frameworks with country code operators. It's 15 months since we have posted the documents, we have 26 accountability frameworks signed to date. And we have eight sponsorship agreements and six memorandums of understanding. Since Lisbon, we've done accountability frameworks for .SV and .MN for Mongolia, an exchanges of letters from .BR, .SN, and .AM. And we've got ongoing discussions with the ccTLDs. So I think we're pleased with the progress to date and I think this is the rolling momentum of country codes who will enter into those accountability frameworks. The registration accreditation policy and process review, this is an important incredibly initiative, and I want to go out of my way to applaud the leadership of the registrars in responding to the calls in March for us to review how do we protect the registrants. I think they've shown great leadership, and I take my hat off to people like Jon Nevett and others who have really played a great leadership role in the constituency in terms of getting ahead of this and talking about what potentially might be required in amendments to the registrar accreditation agreement. I do also want to make the following comment: I don't want people to make the wrong interpretation from the communications that this is a thing that ICANN or ICANN staff thinks would simply be dealt with between ICANN staff and the registrars. This does require consensus. And so there obviously will be a process where others will get a chance to make comments. And those comments, of course, and their input will be very important in this initiative. So this is not a sort of closed room, some sort of back-room deal between registrars and ICANN at all. Some people have raised me with the question, do we get to contribute and respond? And there will be opportunities for that. That will be talked about through the process. So it will be a consensus approach. But, again, I just think it's very useful for -- that the leadership the registrars have shown on this, because it actually does show that there is no real inherent conflict between protection of consumers and good business. And I think that's been very useful. Nevertheless, there is -- the March statement of mine outlining the issues that need to be addressed I think we're still treating as a charter. It's really sort of a charter document for a challenge to us as a community to really look at those set of questions and see what can we move on. Not just in terms of changes to the registrar accreditation agreement, not just in terms of implementation of an escrow procedure, but also present interpretations to the agreement and other things that ICANN itself can do. So there's a range of responsibilities, potentially, in this work. But there will be more on this during the week. And if you have the opportunity to participate, please do. I think it's very important. Internationalized Domain Names, we're going to talk about this straight after this session. Chairman, I suggest we save time by my not talking to it. Let me just talk a little about accountability and transparency initiatives. And I mentioned this a little bit in the opening session. I can assure that you the ICANN board and ICANN staff and I think the ICANN constituencies take this very, very seriously. I think they taken this seriously since the very formation of ICANN. So I don't think sort of accountability or transparency is a new thing in the discussion of ICANN. But I do think there's opportunities for -- there have been opportunities indicated for improvement. What are some of the things that we have done? Certainly the strategic and operating plan process has been a very consultative process. The budget plan and budget process has also been a very consultative process. And formalizing the expression of those, and make sure we communicate those has been very important. There is better board reporting, I think, with 72-hour posting to the community. Actually, last board meeting, it was reported within 24 hours. So there's better -- and key members of the board have really been emphasizing that and pushing that, people like Peter Dengate Thrush, Susan Crawford, and others have been good voices who have been saying to us, you know, we need to keep being very transparent in the way which the board's communications take place. And that's been very much improved, I think. We will certainly look, I think, at putting additional information out about the sorts of issues -- the sorts of input that the board considers when it comes to a particular decision. A lot of that is sort of, I think, implicit in the reporting now. But we will move, I think, very quickly to trying to make that a bit more explicit about what are the actual inputs that are being considered by the board in its decision-making. I can say that because that's actually a staff function, and we have talked about how do we improve that. And we'll do that. We have moved to a blog. The blog has been a very useful tool for communications on specific issues. If many of you have not participated in the blog, that wouldn't surprise me. But I can tell you that hundreds of people concerned with RegisterFly have certainly communicated with the blog. And it's been a very useful tool to have further interaction on an hourly or weekly basis. So that's a useful tool. The public participation site has been implemented for much greater participation, remote participation, even remote participation when you're at the meeting, for particular meeting rooms, for particular issues and particular agendas. And so every issue that's being discussed in a meeting Wednesday afternoon and meeting San Cristobal B, there's a place on the public participation site that those people remotely participate in that, make comments, and being able to hear what's going on. And we've -- as you've seen, we talked about last time, there's been a Web site revamp. We're reimplementing as I responded, we have responded to all the recommendations, the One World Trust. Some of those are things we can act on now, some of those are things that we're inputting into the reviews of things like the board review, the GNSO review, the sort of ongoing review process underway now. On consultations, we have had a very interesting interaction particularly with the government of Canada and Bernie Turcotte, as it's sort of a Canadian, special Canadian input about really thinking through very carefully what sort of consultation framework do we use. And you'll see that we are proposing that we potentially adopt as our own an approach that was recommended by the OECD to its member states about how it is a good way to operate consultation processes. That's all introduction to a major framework that has been -- after a lot of talking to people, a lot of consultation with members of the community, has actually now been posted at the beginning of what will now be a several-months consultation work on sort of frameworks and principles for transparency and accountability. These are sort of principles that the board undertook in a resolution in September last year to introduce, and we see it as a key part of addressing community concerns with accountability and transparency. They provide a common understanding of ICANN's existing accountabilities. It's a very interesting document, because it actually puts all the accountabilities down in one place. And I suspect most people in the community will not realize all the accountabilities that presently exist. And there's very few of us in this room who actually know the ICANN bylaws in great detail. There's probably only four or five of us. And I have to say to you, you are blessed for the rest of you, you are blessed that you don't need to know such things. But, nevertheless, it's things like the bylaws, existing California law, it's things like other resolutions that we're trying to put all in one place and say here are the existing accountability requirements of ICANN. Here are -- and th! en we're -- also, here are some new things. Here's an information disclosure principle. Here's translation framework, here's participation framework, here's a code of conduct, and here's a statement of financial accountability. So there's a series of things that are up for consultation. There's some sessions, I think it's tomorrow, or this afternoon, sorry. I haven't gotten the agenda in my head -- that we're going to be going through this. But I want to reinforce for the community, this is a question of we're going to take months of consultation on this, engage people on these principles. They're going to be key frameworks. We want to hear what you think. We've got additional improvements to the Web site now under way. And I want to just briefly share a little -- one little change that you might find of some interest, if I may. One of the -- oh, dear, it doesn't work as well as I was expecting. One of the new things we're putting up on the site is a sort of -- the map of the world according to ICANN, which actually gives you better indications of the nature of the ICANN -- you know, the international aspects of ICANN. So for this particular map, you can see where presently there are board members, where there are ICANN members, and where there are staff members. So we can actually go around and see where the staff come from, where do -- where board members come from, et cetera. Similarly, where do we presently have ccTLD agreements throughout the world. I have to really take my hat off to Marc Salvatierra who continues to take sort of the innovation on this part of the Web site. So there you can see where we've got the agreements. Interesting where we get contributions from CCs. Kazakhstans and Swedens, Brazil, $70,000 from Brazil. That's fantastic. Where have we held meetings around the world. Where are the root server clusters, which is an interesting part to show where the root servers are. So this actually shows you in one map the root zone WHOIS information. So WHOIS, you know -- let's take .RU, what's the information about .RU. There's the information about .RU. Having done that, I won't be able to get back to the page. Here we go. Where did the preregistrations happen for this meeting? Where did people come from? So you can see we're going to make this more dynamic and share more information. I have to say, one of the things that I find very interesting -- and I suspect, frankly, is one of our challenges, which will be interesting to watch through as we introduce IDN gTLDs, new gTLDs, et cetera -- this is a very interesting part of the map, where are the accredited registrars. And you'll see the very heavy North American emphasis on accredited registrars. But I will make my point that there is one registrar now Senegal and one in South Africa. And that's the -- the registrar in Senegal is a new initiative since we last met in Lisbon. That's just some further additions, but we're trying to make the ICANN world a bit more transparent. That was my show and tell for the -- for today's class. Oh, regional at-large organizations. The last of the Regional At-Large Organization formation process is being undertaken as we speak here in San Juan, and work being done on the establishment of a North American Regional At-Large Organization. This is -- when it comes to conclusion, it will be a phenomenal outcome. It'll be the conclusion of a long process and what I think has been an accelerating process. And I think that's great congratulations to those who have participated. Chairman, I have made -- spoken to a number of the Regional At-Large Organizations in the last two days and made the following point which I think is worth stating: We need the Regional At-Large Organizations not only to be talking about their establishment. We need them to be actually actively engaged in thinking through what are the real values of things that are important for users and registrants in a whole range of issues that are in front of us now. So the registrant work that the -- you know, that we've talked about before in the new registrar accreditation agreements, what we do with introduction of new gTLDs, what's the implications of IDNs. These are things where the voices of the registrants, voices of users and the sorts of professional groupings that are being witnessed in the RALOs are incredibly important, and we have been very clear to the RALOs that the board was very much looking for their voices. But those voices, importantly, need to be professional! , they need to be thoughtful, they need to be as fact-based as possible, because the more people can engage in that format without members of the constituencies in the other parts of the organization, the more I think we will have a very fruitful dialogue of the interests about what needs to be our steps going forward. Regional fellowship program has been introduced here for the first time here in San Juan. This allows financial grants to individuals in developing economies to facilitate participation in ICANN meetings. The priority has been given to low, low middle, and upper-middle income economies according to the world bank group country classification. Includes the government, ccTLDs, and nonprofit sectors not associated with ALAC. That's because ALAC has its own funding for travel. And the order in which we take -- we are taking applications of participants from the ICANN region in which the meeting is taking place. Participants from adjacent regions, and then overseas participants in that order. For this particular meeting in San Juan, there were 125 applications submitted, 44 fellowships were awarded, 34 for attending and ten were deferred to Los Angeles. The -- I think one of the issues there it relates to is the ease of getting visas, particularly into the United States. Sometimes it has meant that we have had to move some of these forward through to Los Angeles. The 31 countries and territories represented 15 ccTLDs, ten government, ten civil society, six private sector, and two academics. And 65 of the fellows have attended an ICANN meeting previously but have not been able to attend since. So that gives you some sense where we are in the fellowship program. We will ensure continuous programming on the fellowship program and very careful auditing of this program. So we're very conscience of the need to be accountable around this program. I talked about the at-large recently. We have now received the 100th application, from Africa in May. So the 100th ALS has now applied to be membership of an at-large community. The President's Strategy Committee met in Lisbon. We had a presentation. The board asked the staff and the committee to -- or the committee to do some further work. I need to report to you, chairman, that, frankly, we have just not had the time. There's been additional work, some additional work that's been done, and we will make that a priority over the northern hemisphere summer, but frankly there has been a whole range of issues in front of us that has just made a delay. Mea culpa. The one thing I do want to point out to the community is a staff initiative coming from advice from present and past board members to keep ongoing reviews of operations. So we have established in May 2007 what we call an operational review panel to actually align the performance of our functional organizations with the strategic plan. And this is the process of actually having business unit audits of how each of the business units is operating to ensure that they are operating in accordance with the strategic plan. And this is the sort of thing you usually expect through management, so Doug Brent and myself being involved in that but we thought it also very helpful to have an outsider involved to come and make sure are these things running well. Especially as an organization is growing, I think it's important that you keep that discipline on checking that there is the -- that the operational processes are aligned. There's nothing sort of going off track. Hagen Hultzsch, a former board member, has been a strong advocate of this and has been offered to be part of this. Hagen is doing it on a purely pro bono basis, he is not looking for any recompense, but that he has been very active in this. And our Phase I goals are the baseline current operational performance for the functions and to create a plan to set performance goals and metrics for improvement. And we have looked at things such as Six Sigma, the Baldridge process, ISO9002. Those sorts of standards. We haven't come to a conclusion yet, but we are looking at those sorts of international performance goals, which is very common in private sector, as being a baseline for us to think about operations. I would just like to remind members of the community that the Internet Governance Forum meeting will take place in Rio in October. We will have a chance to meet before that in Los Angeles. The themes that were developed for the first meeting in Athens were access, diversity, openness, and security. The same themes have been discussed for, upcoming, for Rio, but they have probably been given greater detail and broader context and frankly have been expanded to ensure that they include the operations of ICANN and other parts of the unique identifier system, the roles of the Regional Internet Registries and others, and particularly under this issue of Internet infrastructure and resources, but also issues of access, capacity building in developing countries and there are particular things about ICANN that will likely be discussed. I just want to reinforce that to the community. I don't find this particularly surprising. I actually think it was part of the compact that was done in Tunis that the unique identifiers would not be discussed in Athens but they would be discussed after that. I think we have a good and proud story to tell, and we shall tell it, but we will have an opportunity to discuss this further in Los Angeles. Thank you, Chairman. I hope that's a useful introduction. >>VINT CERF: Thank you very much, Paul [ Applause ] >>VINT CERF: It always amazes me how we've gone from the tasks that Jon Postel did when there was no commercial interest whatsoever in the Internet to the complexity of the task before ICANN. The next topic for reporting is IDN status and evaluation. And Tina Dam is the reporter, so I'll ask her to make her report. >>TINA DAM: Thank you, Mr. Chairman. Is this -- >> Yes. >>TINA DAM: Okay. It's always a pleasure to give a status report on IDNs, and especially this time we have some really good news, and I think a really good plan to report on how we're moving forward. If you followed some of the discussions back at the last meeting in Lisbon, you know you will have seen that we had a lot of activities going on, but you will also have seen a slide that looks a little bit like this where, from a technical standpoint, and from ICANN's perspective, I was posing a question that said, well, we did the laboratory test earlier this year and it was a successful outcome. And we need to be at a point in time where we can make a decision about whether IDN TLDs can be deployed, and we need to figure out what needs to go in between those two points in time. And I'm not saying we didn't know exactly what needed to be there. We had a lot of activities. We had especially a lot of ongoing work in the technical community and we had a lot of policy discussions, but there was not sort of like a final decision on how to get from the one point to the other. Although we had a lot of suggestions and inputs and ideas from the community about what they thought based on their expertise and experience and what we needed to do. So we have taken all of that work in and generated a plan, and the plan looks shortly described as this. And if you are looking for more details of it, there is a status report posted online just a few days ago. So you'll get into more details about it. But here are the different elements of it. There is the technical evaluations, and I'm going to go into a little bit more detail about this in just a little bit. This is some of the latest news, and it will create some facilities for how users and application providers and interested parties can evaluate and try things out with fully localized domain names. So full IDNs, including at the top level. And it will also have an IANA procedure for how to insert these evaluation-purpose TLDs into the DNS. And that procedure is one element that we've put in front of the board for their consideration and hopefully finalization at this meeting. The final piece of the evaluation plans is a performance or tolerance threshold which is basically describing a threshold for, you know, if things go bad, how bad do they go before we make any changes. Such as, for example, pulling the evaluation strings out of the root. That is a paper essentially with some dimensions in it that has to be finalized with the root server operators, and we'll be meeting with them at their meeting in July during the IETF meeting at the end of July later this year. Then there's another component and that is a paper that describes everything that happens from user interface, users entering IDN strings for different purposes through applications and all the way to the DNS and back. And the paper is intended to illustrate what kind of additional issues might exist. And mind you, some of these are not, especially, within ICANN's mandate for what we should be checking, but the paper is supposed to provide some more clarity to what other parts of the community need to pay attention and maybe make some judgments and developments looking forward. On this paper, we have one -- not consultant, but a volunteer participant who is working on this. And we're looking for adding some additional resources to this. It's kind of a quite broad, comprehensive area and it's hard to find somebody who can do this alone. Then there's the protocol revision, and you know we've talked about this before but this is ongoing, and still ongoing in the IETF. And making some more progress. Again, there are going to be meetings at the IETF meeting in July so I won't go into more details on this one. The SSAC, Security and Stability Advisory Committee, within ICANN also decided to launch a study to look at and analyze if there is any additional security concerns that hasn't been taken into account yet and that we need to take a look at. So that study has been launched and is running and is running towards finalization within this calendar year. And then there are the IDN guidelines, and they continue to be looked at and revised every once in a while when there is more development taking place within the protocol or within the policies. The guidelines sort of like sit in between those two areas and will take in input from both to make sure that things are coherent through the technical stuff and all the way into implementation and policy. We posted the latest version of the guidelines recently. It's version 2.2. It's the first version to take the top level into consideration, whereas previous versions have been more focused at second and lower levels. So the guidelines will follow additional work and will be finalized in accordance with the other work that's going on. We're doing a lot of outreach, and a lot of support and participation, communication with various parts of the community, especially with the regional liaisons on ICANN staff that take the IDN focus out in their respective regions, and we're going to continue moving forward on this. And then policy and policy processes, which is probably the topic that you will have seen and will see most of this week. There is a lot of initiatives going on between the ccNSO, the GAC, and the GNSO. In particular, those three, and the ALAC of course. Those four are doing a lot of considerations about what are the different issues, policy issues, questions that have to be answered. And you will see that between these four groups and staff, we're trying to do a much more coordinated effort to make sure that everything is going in the same direction. One of the meetings on that is later today, which is the ccNSO/GAC joint session to look at policy issues that affect CCs and governments. But anyway, let's take a quick look at the technical evaluation. So we posted a draft proposal for how this is going to work, and I really encourage you, if you are interested in this area, to take a look at it and see if there's something that you think we should be doing maybe slightly differently. But here is sort of like the overhead of what it is. We're going to take that test, translate it, and there's a suggested set of languages that we're going to translate it in and display it in those associated scripts and insert those into the root zone. Then we are going to take for each one of those test zones and put in second-level labels corresponding to example. So you are essentially going to have example.test out working and resolving live. And here is what it's going to resolve to. Actually, there's two -- there is two facilities. There is the live replication of the laboratory test that we did previously this year, so that's an evaluation to make sure that what was tested in a laboratory setting will be working live in the DNS as well. And then the second piece is that these example.test labels translated will resolve to -- will have URLs resolving to Wikis, and one Wiki for each one of them with local content explaining what the evaluation is about. Users will be able to set up their own Web site, so you would have example.test slash your name, my name, your company name or, you know, whatever you think might be useful for you. And you can then try it out. And the second piece of that is e-mail reflector. There's going to be a lot of information on the sites, again in local content, public forums for discussions about how things are working out across applications globally, and some customer surveys and so forth. And we're going to take all of that information and provide reportings of how things are going. And the intention is to make that useful for, you know, continued decision on whether IDN TLDs are feasible at this time, if there's something else that has to be resolved before we can go ahead, or, you know, for those who are interested in applying and becoming IDN TLD operators, you know, this would be useful tool for them to have seen what it is that the end users are going to be struggling with. Here is sort of just a short overview of time line on how this is moving forward. So here in San Juan, we have the IANA process for consideration by the board that I mentioned. In July we're looking at finalizing the performance or tolerance measure. This measure is going to be used for emergency removal of dot test from the DNS. And it is quite obvious that that has a lot of root server participation, so the RSSAC will be a very important piece of finalizing this. In August, we will have finalized the evaluation plans, the two facilities that I just talked about. So if you have any comments to it, it's really important that you provide those throughout the rest of June and July. We will then finalize it and put in front. Of the ICANN board the consideration of allocating these dot test strings. September/October is more or less implementation and deployment. So while we do some pre-implementation already now, and in July as well, the core pieces are going to be September/October 2007. And then throughout the year, and starting now as well, we're going to be launching an outreach program with the regional liaisons to get as much participation locally as possible. And we're going to tray to make some very specific target opportunities for the community to participate, not only in the Wiki and trying things out but also in terms of like replicating the laboratory test that was done. So there will be a lot of communication on this looking forward. And that is all of what I had, Mr. Chairman, for the status report today. There is a Web site here if you are interested in more details. We have made a lot of announcements on IDNs lately, so go and check it out and participate as much as you can. >>VINT CERF: Thank you very much, Tina [ Applause ] >>VINT CERF: I think all of us are very excited -- I think all of us are very pleased to see this level of progress made in IDNs. It's been a long time coming. But the technology and the policy here are both complex and deserve a great deal of attention. The final report for this morning comes from Doug Brent, the chief operating officer of ICANN, and the subject is the operating plan and budget. And there will be a brief pause while we get all of the technology to work. Some day I hope we have wireless connections between our laptops and the projection unit so we don't have to fuss around with cables and connectors. It also has the potential that somebody in the audience can take over your slide presentation, but that's a whole other problem. Go ahead, Doug. >>DOUG BRENT: Thank you, Chairman. Let me see if we can work through the technology issues here. Mehmet, can you help me here while I'm getting going? Thank you. Let me go ahead and get started. My name is Doug Brent. This is the first time I have had an opportunity to address an ICANN public forum. I have been working the last six months with ICANN staff and the community on getting this budget together, and I would say it's been a great opportunity for me to meet some of you and to work with some of you and reporting out on that today. In talking about the budget, the budget is really the outcome of a process that started a long time ago. Louder? Thank you. The budget is the outcome of a process that started a long time ago. If you ever architected hardware or a house, any kind of process, setting up the rules, any kind of guidelines, the architecture is what determines the outcome. With budget the things that determine the outcome is the strategic plan. So beginning last July, ICANN engaged in strategic planning process that resulted in a strategic plan approved in Sao Paulo in December and then began the operating plan process that looks something like this. A draft operating plan was issued and discussed in March. Significant community consultation on that plan, including multiple languages. There was a costing of the plan, iterated through several cycles. A board approval of the scope of that plan, and what you are going to see as the result of that today is the budget. The plan itself, and in terms of talking about accountability and transparency, one of our goals is to make the operating plan really quite open and quite relevant to you all in terms of understanding how ICANN is spending its effort and what it is doing. What we started out to do this time is create a new kind of plan. If you go back up on the Web site from Lisbon, you will see a 27-page operating plan structured both by the functional area within ICANN as well as by the strategic plan initiative it is trying to serve. So you will see a list of activities for each function. In some cases, the nature of the metrics and specific metrics to measure the progress and result of that area. Areas for improvement that we're focusing on for this year. New work to be done. And then again, as I said in the end, summarized and made accessible both by looking at it from a functional point of view or a strategic plan point of view. I know for people in the back this is going to be very hard to see. I think, by the way, the presentation is now posted or will shortly be posted on the meeting Web site. Kieren actually paid me a little money to mention the meeting participate site so feel free to see it there as well. This is really just supposed to give you a conceptual view of what this operating plan model looks like. It's available in detail from the Lisbon site. But basically the operating plan goes through and shows functions, activities, new work or projects planned for this year and the outcomes associated with that new work. Probably pretty obvious, but the reason why you would add a new project is to improve effectiveness, efficiency, provide a one-time kind of a service. Just trying to think off the top of my head, I think one of the things you will see this week is sort of a beta version of a new IANA automated sort of registration process, really interesting. And add ongoing services to the base business. So that was sort of the operating plan process we went through. Finished in Lisbon, was approved in its scope by the board. That brings us to the budget. Again, sort of the outcome of the strategic planning and operational planning process. The board finance committee approved the draft budget in May and it was posted for public comment beginning May 17th. This is actually a process Kurt Pritz has led in the past and actively sought participation and feedback from various constituencies. In early June, actually held meetings with registrar constituency, with ALAC, with registry constituency. Actually continuing some of that this week while we're in San Juan. I know personally I'm meeting with ALAC. If anyone is interested, I will be, Wednesday morning, manning the ICANN booth, would love to talk to you about budget there. And we are also having a Spanish language, French language, and I think we didn't get enough interest in Arabic but we will have an Arabic version of this to discuss as well. And by the way, posted the budget in more languages than ICANN has ever posted it before to make it accessible for feedback. So the budget has been posted for some weeks now. And I want to start with the as-posted budget as a baseline to talk about. It was created with the iterative process I described starting with really tying a financial plan -- starting with the operating plan and building a finance plan would allow us to execute on that. If you were following this closely you would see the operating plan was updated. As we went through the budget process we decided that some capital improvement projects that are very important will have to be deferred until fiscal 2009. This proposed budget anticipates net revenue as posted of 46 million, approximately. And expenses of about 41.6 million. And that includes a $2 million contingency fund which I may mention a bit more about later. And I think as you will see in this presentation, a big question, I'm sure, in your mind is how are we spending the money, what's driving that expense. And you will see shortly that what's driving the expense is really moving into implementation phase on key projects. You saw, for example, Tina just talking about IDNs. Another major emphasis of the meeting this week will be gTLD process. Those are the kinds of things driving the money. But starting with that base plan, we got feedback. And that feedback is going to change the as-posted budget. I'm not going to run through every line item in detail, because actually there's a fair amount of detail behind this, but I would just like to give you a high-level view of the kind of feedback we have gotten. As Paul Twomey was earlier talking about, this would be maybe an OECD process lite where we have gotten that feedback, want to discuss the actual feedback we have gotten and then talk about changes made as a result of that. You know, I've got to say my first talking with people about ICANN was in Lisbon. In multilingual sessions and the first thing I heard is we need more translation, we need more translation. I think you will hear from Paul Levins this week is we are working on a really fully fleshed out translation policy and we have a beginning of that now. We don't yet now have enough of a policy that we can actually sort of run the calculator and add up exactly how much that's going to cost us to do translation, but we decided it would be important to increase the translation budget to allow for even more this year. It will be in the ending budget about $480,000. That's about two and a half times what it was for this fiscal year that ends this week. We were asked to review the revenue forecast for a couple of reasons. Transaction volume this year was much higher than anticipated. And we did review the revenue forecast. The hard thing, as anyone in business or academics or any environment who's doing revenue forecasts, is it's -- you do your best, but it's still a forecast. It's somewhat of a guest. I think we were challenged this year by several people to ensure that we had a conservative forecast but one that was grounded that we felt good about. We did review this. And based on what's happened in 2007, looking forward to 2008, we're now raising that forecast from what is in the posted budget today, about 46 million to $50 million. Based on what was a very strong addition to ICANN's reserve fund, that is sort of the rainy day fund for ICANN, which we've targeted by board direction to be a year, we will add this year almost $17 million to that reserve fund. We're going to anticipate in this budget adding an additional $8 million to that fund. Based on that strong financial situation and based on sort of the overall goal of ICANN to -- as, you know, the Internet grows bigger and bigger, that we look at what we can do to make sure that sort of unit costs are, you know, kept in line and reduced, we are considering and in discussions right now, the finance committee heavily involved, in terms of looking at transaction fees, talking with the registrar constituency about that. Lastly -- and I think we heard this from a bunch of different surprising places -- but at many different levels, you know, our volunteer constituencies, like you all sitting out there, want to ensure they're getting appropriate administrative support. And, you know, that was actually a pretty consistent message. So what we're going to do is evaluate that during this fiscal year, and if we find gaps, take out of that contingency fund I discussed and make sure we're adequately supporting that. Those are all changes in the budget that you'll see posted, updated this week as a result of community feedback. We got some additional feedback that won't result in changes to the budget but will result in some work, some ongoing work in fiscal 2008 to do a little bit more analysis. One question we got asked, I believe it was by the registrar constituency most strongly, is what's the right level of reserve fund, is one year the right number? Should it be less than a year? Staff did a little brief research. I think we can feel confident as a community that one year sort of isn't the wrong answer. You know, you see answers ranging from three months to two years. But at the same time, I don't think we know enough to recommend to the board that we're certain that that's the right answer. So we'll undertake efforts during this year to really analyze that, bring that information to the community and the board for review. Even though certainly the budget process isn't where we go to tune meetings, meetings are an expense, and that's an important way ICANN spends money. So some questions about meetings came up, which I shared with Paul, as input to the meetings committee. And just questions, are we doing this in the most cost-effective way? Should we consider different rotations? And I think we want to bring that to the meetings committee for consideration just as another input. I'll say the meetings committee already has been quite self-reflective about how that's being spent and changes to be made. Lastly, I think this will be probably on the -- at least as long as I'm here on the ICANN budget charts every year, which is how we can do a better job to present the data to be ever more open and transparent. I'll give two examples, one of which feed back from the ALAC group asking how can we get better data to run ourselves so we know how we're getting funded, and we definitely want to do that. Second example is that I think that even though ICANN is not a sufficiently mature organization and we're too small to go through sort of a time card costing where we can, you know, fractionally bill people to different projects, I think it's very important for the ICANN constituency to know the full cost of running our most important projects, like an IDN project, for example. And that's something that we'll definitely take on board for next year as we do the 2009 plan. Based on those comments, we're going to amend the budget with the updates that I discussed. And since one of my jobs I was told to make sure things run on time, I'm going to watch the clock a bit as I do this, increase the pace. So you'll see an amended budget that amends revenue to $50 million, reallocate some spending for translation support and for constituency support. But the primary expense for capital and expenses, that sort of $41.6 million number you saw, isn't going to change. And if you haven't had a chance to look at the budget in detail, you can sort of grind through the budget online and you'll get very good information. I think I'm not going to go through in detail any of those charts right now. I would just like to show you one more chart and then the summary of. Which is this: What is driving our spending in fiscal 2008? It's these, you know, key initiatives. So we'll be spending approximately $1.6 million this year on starting up the gTLD process. And, you know, I think that it's clear from the community that this is an important effort and initiative, and before we ever take the first application, there's a heck of a lot of work to do. I would encourage you to participate in the discussions on gTLD. I'm not going to go through what that work is, but it's significant. We've gone into detail, by the way. These numbers are not just high-level numbers. There's a detail plan behind this. In terms of some of the outreach that ICANN does, and you'll see a chart on outreach in the posted budget that has a few more details, but even just looking at the fellowship and ALAC piece, that's about $1 million this year. IDN just for those costs directly associated with IDN, not the whole IDN program, about $1 million, compliance being an important effort that we've talked about but really moving into implementation this year, data esc! row is another important area that we're moving into this year. And informing a lot of the discussions, you know, with better economic analysis even some of the ones we're having this week, would be a great advantage. So let me just skip to the end and give you the summary instead of showing you these pie charts which, again, are all available online, and even with the updates I've talked about, are, you know, largely going to be unchanged. You know, just to remind you, the budget process has been this -- a formal process geared towards getting feedback at each stage, starting with the strategic plan on to the operating plan, and then, finally, this week the budget. The budget amounts that staff has proposed and reviewed extensively with the board, and particularly the finance committee, who's been very helpful, is in support of the operating plan. That's where the money comes from. That moving into implementation phase on these key projects this year is really what's driving the incremental expense. Something we didn't spend time on this morning is that we've also taken out expense in some areas. Some of the ones I'm directly responsible for, like finance, information technology, human resources, we're going to actually reduce the total amount we're spending on those this year because they're not outside-facing and try to up the level of service at the same time. That sort of gives you the budget picture and how we arrived at it. And, again, we'd look forward either in the short Q and A session now or through the week to talk to you about it more. Thank you very much. [ Applause ] >>VINT CERF: Thank you very much, Doug, for making that such an expeditious presentation. And I certainly encourage those of you who are interested in more detail to take advantage of the online material. We have some time for questions for Doug or Tina or Paul, if anyone has them. If you wish to ask a question, please come to the microphone at the center of the room. And make sure that your names are known to our scribes, who are preparing the realtime captioning. I don't see a rapid dash for the microphone. That might mean that there are people who would prefer to make a rapid dash for the door, considering that it is getting close to lunchtime. So if there aren't any questions, I think we'll just call this session -- oh, aha, Amadeu, the permanent inhabitant of the microphone area. Amadeu did tell me yesterday that if I were looking for him, he would be nearby the public microphone. So Amadeu. >>AMADEU ABRIL i ABRIL: I thought it was a shame having a session without any questions. So I feel the duty of filling that gap. [ Applause ] >>AMADEU ABRIL i ABRIL: Now, is a question for Tina regarding implementation of IDN. And, quite frankly, would like to understand a little bit better what does "implementation" process mean, that is, what sort of IDN TLDs are we deploying next autumn? And in that sense, what sort of policy process are we following for deciding which ones and how? >>VINT CERF: We're -- in fact part of that process is ongoing this week as we talk about new gTLDs, which will include IDNs at the TLD level. But -- >>AMADEU ABRIL i ABRIL: Okay. So there is the process there. Then my advice is to separate that from the new gTLDs question, because probably is a very different beast with very different requirements. >>VINT CERF: No, actually, I'm not -- unless I've misunderstood you, Amadeu, I disagree with what I think you said. I believe that new gTLDs and IDN TLDs should not be considered terribly distinct, that, in fact, we should treat these all as TLDs. And, in fact, we're even coming to -- I am, anyway -- coming to the view that the ccTLDs, if they are expressed using internationalized character sets, can't be easily distinguished from gTLDs expressed in internationalized character sets. And so the ensemble of TLDs expressed using internationalized terms, internationalized characters, needs to be considered as a whole, and issues related to objections, questions related to which characters are permitted or are not permitted all somehow coalesce into a new common acceptance of new TLD acceptance. >>AMADEU ABRIL i ABRIL: I agree for the ccTLDs. I think for the gTLDs, I think that new gTLD and that the Cyrillic transliteration of dot com or dot org are different things. >>VINT CERF: Here we -- here's a key point. I'm sorry to have in some sense intervened and not let Tina respond, which she should do. But I think that in the case of translations of domain names or TLDs, I'm not sure yet that I buy the argument that translations literally are a practice that we should endorse. I would rather see proposals for TLDs which are specific, unique, and independent of any other existing ones. >>AMADEU ABRIL i ABRIL: In that case, we completely agree. >>VINT CERF: Oh, good. I'm glad to hear that. Tina, you might want to add something to my attempts to respond to Amadeu's question. >>TINA DAM: Sure. I guess it's kind of hard to add anything to it. But I just want to stress the fact that the plan that I talked about is evaluation purpose TLDs. So it's for evaluating things. That means that the dot test strings that are translated into a number of different languages and scripts will have a limited lifetime. So, Amadeu, when you talk about the policy processes, you're talking about the policy processes that will lead to -- potentially lead to production, you know, real deployment of IDN TLDs that registrants can come and make registrations under. That was not my piece. My piece was purely evaluation, and it's just dot test translated. And it's going to be inserted as NS records. As a further clarification, there has been a lot of talk about different resource records and different ways of managing these IDN TLDs. And this is going to be NS records. >>VINT CERF: Thank you, Tina. Having dealt with the obligatory Amadeu question, it looks to me like we don't have anyone else queued up for the microphone, which will allow us to end the session on time. So I thank all of you for that accommodation. Our next session begins at noon. And that is the workshop on the protection of registrants in the San Geronimo area here. So I invite you to return at noon for that discussion if that happens to be a topic of interest. And we'll close this session. (11:43 a.m.)