The Internet Corporation
for Assigned Names and Numbers

Task Force on Funding (TFF)
Notes of Meeting
23 August 1999

First Meeting of Task Force

An initial meeting of the task force was held in Santiago, Chile on August 23, 1999 in connection with the quarterly public meetings of the Board and related organizational units. The task force has approved the posting of summary notes of the meeting and will post similar notes for its subsequent meetings. The task force has discussed and will have further comment on means for public outreach and comment on its work. It should be noted that, consistent with ICANN's bylaws, any recommendations from the task force to the ICANN Board will be posted for public comment prior to their consideration by the Board.

Summary Notes of August 23, 1999 Meeting of Task Force on Funding

Task Force Members Present: M. Roberts (Chair), W. Black, L. Gaviser (for R. Forman), P. Gerrand, K. Hubbard, M. Kuehne, D. Telage, P. Wilson.

Absent: P-A. Hurtigh, N. Maruyama, JL. Ribeiro-Filho

Guests: E. Dyson, A. McLaughlin, A-M Plubell, L. Touton, J. Sims

1. After self-introductions, the Chair distributed a one page set of notes for the meeting, which provided background information on the task force and the issues before it and then opened the floor to discussion.

2. Several members mentioned the need for TFF to have some grasp of the expense side of ICANN's budget, in addition to the revenue, or funding side. The Chair described briefly the budget for the current fiscal year, the details of which are posted on the ICANN web site. It was agreed that members would review that material and direct any resulting questions to the Chair for clarification. It was pointed out that although the budget was indeed posted for public comment in April, 1999, there was very little staff time available to actually involve ICANN stakeholders in examination of the resource issues, detailed rationale for expenditures, etc., which normally accompany organizational budget processes. The ICANN Chairman and CEO each expressed regret that this had not been possible and expressed a commitment that subsequent year's processes will be more interactive.

3. Some discussion took place on whether various ICANN expenses should be analyzed and differentially attributed to services rendered to different stakeholders and constituencies. An opinion was expressed that the current transition budget still contains many items of a one time nature that the entire community needs to see successfully concluded. Another opinion was that ICANN is more a policy setting than a services organization, and any given policy may have more interest to one constituency than another; nonetheless, the body of ICANN policies represents a consensus of all stakeholders on management of the domain name system and a failure of one part of the system to function well inevitably affects the other parts. It was agreed that although "truth in cost accounting" was not a goal of the task force work, the subject might need to be revisited in the future.

4. The chair described the recent decision by one of the ccTLD's to contribute $25,000 to ICANN, accompanied by a request that registry dues to ICANN NOT have a variable component based on number of domain names assigned. (Two other ccTLD's have also made recent contributions.) Discussion ensued on various revenue mechanisms that might embody proportionality principles but not include a specific amount per domain name assigned. The general sense of the discussion was that a variable name fee should be avoided if posssible for both practical as well as political reasons. A three tier structure is being used in some ccTLD regional bodies and might be adaptable to ICANN's revenue needs. It was agreed that additional work, including modeling of possible numbers and amounts, should be done.

5. The next portion of the meeting was devoted to a discussion of the respective potential contributions of the regional address registries and the domain name registries and registrars to the total ICANN revenue budget. The view was expressed that it has been to the overall benefit of the Internet community that IP addresses have not been "monetized" in the past, and that this practice should continue. As a result of this history, the budgets of the address registries have been based on relatively modest member dues that do not currently provide much flexibility for the address registries to assume a major share of the ICANN revenue budget. It was also pointed out that the IP registries operate on a non-profit model, whereas a substantial fraction of the domain name activity is conducted under a for-profit model. With some reservations, the group accepted the premise that initially the IP address registries' contribution to the overall ICANN revenue budget should be based on their current economic model and related ability to pay.

6. The final portion of the meeting was devoted to a discussion of proportionality issues in allocating fractions of the total revenue budget to the three major stakeholder groups - IP registries, ccTLD name registries/registrars (few are separated), and gTLD domain name registry/registrars (in process of being separated and potentially expanded). In the absence of any modeling or related analytical staff work, the discussion was primarily on the basis of the "comfort" level of task force members with various percentage formulas. After some additional back and forth on the issue of the status of the IP registries, there was general agreement that this approach warranted further consideration by the task force at future meetings.

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