<html><body style="word-wrap: break-word; -webkit-nbsp-mode: space; -webkit-line-break: after-white-space;"><div>Hello,</div><div><br></div><div>On behalf of the RrSG, I would like to submit the below comment on the ICANN Reserve Fund - Rationale and Target Level.</div><div><br></div><div>Kind regards,</div><div><br></div><div>Zoe Bonython</div><div>RrSG Secretariat</div><div><br></div><div>
<!--[if gte mso 9]><xml>
<o:DocumentProperties>
<o:Revision>0</o:Revision>
<o:TotalTime>0</o:TotalTime>
<o:Pages>1</o:Pages>
<o:Words>830</o:Words>
<o:Characters>4733</o:Characters>
<o:Company>EEMUA</o:Company>
<o:Lines>39</o:Lines>
<o:Paragraphs>11</o:Paragraphs>
<o:CharactersWithSpaces>5552</o:CharactersWithSpaces>
<o:Version>14.0</o:Version>
</o:DocumentProperties>
<o:OfficeDocumentSettings>
<o:AllowPNG/>
</o:OfficeDocumentSettings>
</xml><![endif]-->
<!--[if gte mso 9]><xml>
<w:WordDocument>
<w:View>Normal</w:View>
<w:Zoom>0</w:Zoom>
<w:TrackMoves/>
<w:TrackFormatting/>
<w:PunctuationKerning/>
<w:ValidateAgainstSchemas/>
<w:SaveIfXMLInvalid>false</w:SaveIfXMLInvalid>
<w:IgnoreMixedContent>false</w:IgnoreMixedContent>
<w:AlwaysShowPlaceholderText>false</w:AlwaysShowPlaceholderText>
<w:DoNotPromoteQF/>
<w:LidThemeOther>EN-US</w:LidThemeOther>
<w:LidThemeAsian>JA</w:LidThemeAsian>
<w:LidThemeComplexScript>X-NONE</w:LidThemeComplexScript>
<w:Compatibility>
<w:BreakWrappedTables/>
<w:SnapToGridInCell/>
<w:WrapTextWithPunct/>
<w:UseAsianBreakRules/>
<w:DontGrowAutofit/>
<w:SplitPgBreakAndParaMark/>
<w:EnableOpenTypeKerning/>
<w:DontFlipMirrorIndents/>
<w:OverrideTableStyleHps/>
</w:Compatibility>
<m:mathPr>
<m:mathFont m:val="Cambria Math"/>
<m:brkBin m:val="before"/>
<m:brkBinSub m:val="--"/>
<m:smallFrac m:val="off"/>
<m:dispDef/>
<m:lMargin m:val="0"/>
<m:rMargin m:val="0"/>
<m:defJc m:val="centerGroup"/>
<m:wrapIndent m:val="1440"/>
<m:intLim m:val="subSup"/>
<m:naryLim m:val="undOvr"/>
</m:mathPr></w:WordDocument>
</xml><![endif]--><!--[if gte mso 9]><xml>
<w:LatentStyles DefLockedState="false" DefUnhideWhenUsed="true"
DefSemiHidden="true" DefQFormat="false" DefPriority="99"
LatentStyleCount="276">
<w:LsdException Locked="false" Priority="0" SemiHidden="false"
UnhideWhenUsed="false" QFormat="true" Name="Normal"/>
<w:LsdException Locked="false" Priority="9" SemiHidden="false"
UnhideWhenUsed="false" QFormat="true" Name="heading 1"/>
<w:LsdException Locked="false" Priority="9" QFormat="true" Name="heading 2"/>
<w:LsdException Locked="false" Priority="9" QFormat="true" Name="heading 3"/>
<w:LsdException Locked="false" Priority="9" QFormat="true" Name="heading 4"/>
<w:LsdException Locked="false" Priority="9" QFormat="true" Name="heading 5"/>
<w:LsdException Locked="false" Priority="9" QFormat="true" Name="heading 6"/>
<w:LsdException Locked="false" Priority="9" QFormat="true" Name="heading 7"/>
<w:LsdException Locked="false" Priority="9" QFormat="true" Name="heading 8"/>
<w:LsdException Locked="false" Priority="9" QFormat="true" Name="heading 9"/>
<w:LsdException Locked="false" Priority="39" Name="toc 1"/>
<w:LsdException Locked="false" Priority="39" Name="toc 2"/>
<w:LsdException Locked="false" Priority="39" Name="toc 3"/>
<w:LsdException Locked="false" Priority="39" Name="toc 4"/>
<w:LsdException Locked="false" Priority="39" Name="toc 5"/>
<w:LsdException Locked="false" Priority="39" Name="toc 6"/>
<w:LsdException Locked="false" Priority="39" Name="toc 7"/>
<w:LsdException Locked="false" Priority="39" Name="toc 8"/>
<w:LsdException Locked="false" Priority="39" Name="toc 9"/>
<w:LsdException Locked="false" Priority="35" QFormat="true" Name="caption"/>
<w:LsdException Locked="false" Priority="10" SemiHidden="false"
UnhideWhenUsed="false" QFormat="true" Name="Title"/>
<w:LsdException Locked="false" Priority="1" Name="Default Paragraph Font"/>
<w:LsdException Locked="false" Priority="11" SemiHidden="false"
UnhideWhenUsed="false" QFormat="true" Name="Subtitle"/>
<w:LsdException Locked="false" Priority="22" SemiHidden="false"
UnhideWhenUsed="false" QFormat="true" Name="Strong"/>
<w:LsdException Locked="false" Priority="20" SemiHidden="false"
UnhideWhenUsed="false" QFormat="true" Name="Emphasis"/>
<w:LsdException Locked="false" Priority="59" SemiHidden="false"
UnhideWhenUsed="false" Name="Table Grid"/>
<w:LsdException Locked="false" UnhideWhenUsed="false" Name="Placeholder Text"/>
<w:LsdException Locked="false" Priority="1" SemiHidden="false"
UnhideWhenUsed="false" QFormat="true" Name="No Spacing"/>
<w:LsdException Locked="false" Priority="60" SemiHidden="false"
UnhideWhenUsed="false" Name="Light Shading"/>
<w:LsdException Locked="false" Priority="61" SemiHidden="false"
UnhideWhenUsed="false" Name="Light List"/>
<w:LsdException Locked="false" Priority="62" SemiHidden="false"
UnhideWhenUsed="false" Name="Light Grid"/>
<w:LsdException Locked="false" Priority="63" SemiHidden="false"
UnhideWhenUsed="false" Name="Medium Shading 1"/>
<w:LsdException Locked="false" Priority="64" SemiHidden="false"
UnhideWhenUsed="false" Name="Medium Shading 2"/>
<w:LsdException Locked="false" Priority="65" SemiHidden="false"
UnhideWhenUsed="false" Name="Medium List 1"/>
<w:LsdException Locked="false" Priority="66" SemiHidden="false"
UnhideWhenUsed="false" Name="Medium List 2"/>
<w:LsdException Locked="false" Priority="67" SemiHidden="false"
UnhideWhenUsed="false" Name="Medium Grid 1"/>
<w:LsdException Locked="false" Priority="68" SemiHidden="false"
UnhideWhenUsed="false" Name="Medium Grid 2"/>
<w:LsdException Locked="false" Priority="69" SemiHidden="false"
UnhideWhenUsed="false" Name="Medium Grid 3"/>
<w:LsdException Locked="false" Priority="70" SemiHidden="false"
UnhideWhenUsed="false" Name="Dark List"/>
<w:LsdException Locked="false" Priority="71" SemiHidden="false"
UnhideWhenUsed="false" Name="Colorful Shading"/>
<w:LsdException Locked="false" Priority="72" SemiHidden="false"
UnhideWhenUsed="false" Name="Colorful List"/>
<w:LsdException Locked="false" Priority="73" SemiHidden="false"
UnhideWhenUsed="false" Name="Colorful Grid"/>
<w:LsdException Locked="false" Priority="60" SemiHidden="false"
UnhideWhenUsed="false" Name="Light Shading Accent 1"/>
<w:LsdException Locked="false" Priority="61" SemiHidden="false"
UnhideWhenUsed="false" Name="Light List Accent 1"/>
<w:LsdException Locked="false" Priority="62" SemiHidden="false"
UnhideWhenUsed="false" Name="Light Grid Accent 1"/>
<w:LsdException Locked="false" Priority="63" SemiHidden="false"
UnhideWhenUsed="false" Name="Medium Shading 1 Accent 1"/>
<w:LsdException Locked="false" Priority="64" SemiHidden="false"
UnhideWhenUsed="false" Name="Medium Shading 2 Accent 1"/>
<w:LsdException Locked="false" Priority="65" SemiHidden="false"
UnhideWhenUsed="false" Name="Medium List 1 Accent 1"/>
<w:LsdException Locked="false" UnhideWhenUsed="false" Name="Revision"/>
<w:LsdException Locked="false" Priority="34" SemiHidden="false"
UnhideWhenUsed="false" QFormat="true" Name="List Paragraph"/>
<w:LsdException Locked="false" Priority="29" SemiHidden="false"
UnhideWhenUsed="false" QFormat="true" Name="Quote"/>
<w:LsdException Locked="false" Priority="30" SemiHidden="false"
UnhideWhenUsed="false" QFormat="true" Name="Intense Quote"/>
<w:LsdException Locked="false" Priority="66" SemiHidden="false"
UnhideWhenUsed="false" Name="Medium List 2 Accent 1"/>
<w:LsdException Locked="false" Priority="67" SemiHidden="false"
UnhideWhenUsed="false" Name="Medium Grid 1 Accent 1"/>
<w:LsdException Locked="false" Priority="68" SemiHidden="false"
UnhideWhenUsed="false" Name="Medium Grid 2 Accent 1"/>
<w:LsdException Locked="false" Priority="69" SemiHidden="false"
UnhideWhenUsed="false" Name="Medium Grid 3 Accent 1"/>
<w:LsdException Locked="false" Priority="70" SemiHidden="false"
UnhideWhenUsed="false" Name="Dark List Accent 1"/>
<w:LsdException Locked="false" Priority="71" SemiHidden="false"
UnhideWhenUsed="false" Name="Colorful Shading Accent 1"/>
<w:LsdException Locked="false" Priority="72" SemiHidden="false"
UnhideWhenUsed="false" Name="Colorful List Accent 1"/>
<w:LsdException Locked="false" Priority="73" SemiHidden="false"
UnhideWhenUsed="false" Name="Colorful Grid Accent 1"/>
<w:LsdException Locked="false" Priority="60" SemiHidden="false"
UnhideWhenUsed="false" Name="Light Shading Accent 2"/>
<w:LsdException Locked="false" Priority="61" SemiHidden="false"
UnhideWhenUsed="false" Name="Light List Accent 2"/>
<w:LsdException Locked="false" Priority="62" SemiHidden="false"
UnhideWhenUsed="false" Name="Light Grid Accent 2"/>
<w:LsdException Locked="false" Priority="63" SemiHidden="false"
UnhideWhenUsed="false" Name="Medium Shading 1 Accent 2"/>
<w:LsdException Locked="false" Priority="64" SemiHidden="false"
UnhideWhenUsed="false" Name="Medium Shading 2 Accent 2"/>
<w:LsdException Locked="false" Priority="65" SemiHidden="false"
UnhideWhenUsed="false" Name="Medium List 1 Accent 2"/>
<w:LsdException Locked="false" Priority="66" SemiHidden="false"
UnhideWhenUsed="false" Name="Medium List 2 Accent 2"/>
<w:LsdException Locked="false" Priority="67" SemiHidden="false"
UnhideWhenUsed="false" Name="Medium Grid 1 Accent 2"/>
<w:LsdException Locked="false" Priority="68" SemiHidden="false"
UnhideWhenUsed="false" Name="Medium Grid 2 Accent 2"/>
<w:LsdException Locked="false" Priority="69" SemiHidden="false"
UnhideWhenUsed="false" Name="Medium Grid 3 Accent 2"/>
<w:LsdException Locked="false" Priority="70" SemiHidden="false"
UnhideWhenUsed="false" Name="Dark List Accent 2"/>
<w:LsdException Locked="false" Priority="71" SemiHidden="false"
UnhideWhenUsed="false" Name="Colorful Shading Accent 2"/>
<w:LsdException Locked="false" Priority="72" SemiHidden="false"
UnhideWhenUsed="false" Name="Colorful List Accent 2"/>
<w:LsdException Locked="false" Priority="73" SemiHidden="false"
UnhideWhenUsed="false" Name="Colorful Grid Accent 2"/>
<w:LsdException Locked="false" Priority="60" SemiHidden="false"
UnhideWhenUsed="false" Name="Light Shading Accent 3"/>
<w:LsdException Locked="false" Priority="61" SemiHidden="false"
UnhideWhenUsed="false" Name="Light List Accent 3"/>
<w:LsdException Locked="false" Priority="62" SemiHidden="false"
UnhideWhenUsed="false" Name="Light Grid Accent 3"/>
<w:LsdException Locked="false" Priority="63" SemiHidden="false"
UnhideWhenUsed="false" Name="Medium Shading 1 Accent 3"/>
<w:LsdException Locked="false" Priority="64" SemiHidden="false"
UnhideWhenUsed="false" Name="Medium Shading 2 Accent 3"/>
<w:LsdException Locked="false" Priority="65" SemiHidden="false"
UnhideWhenUsed="false" Name="Medium List 1 Accent 3"/>
<w:LsdException Locked="false" Priority="66" SemiHidden="false"
UnhideWhenUsed="false" Name="Medium List 2 Accent 3"/>
<w:LsdException Locked="false" Priority="67" SemiHidden="false"
UnhideWhenUsed="false" Name="Medium Grid 1 Accent 3"/>
<w:LsdException Locked="false" Priority="68" SemiHidden="false"
UnhideWhenUsed="false" Name="Medium Grid 2 Accent 3"/>
<w:LsdException Locked="false" Priority="69" SemiHidden="false"
UnhideWhenUsed="false" Name="Medium Grid 3 Accent 3"/>
<w:LsdException Locked="false" Priority="70" SemiHidden="false"
UnhideWhenUsed="false" Name="Dark List Accent 3"/>
<w:LsdException Locked="false" Priority="71" SemiHidden="false"
UnhideWhenUsed="false" Name="Colorful Shading Accent 3"/>
<w:LsdException Locked="false" Priority="72" SemiHidden="false"
UnhideWhenUsed="false" Name="Colorful List Accent 3"/>
<w:LsdException Locked="false" Priority="73" SemiHidden="false"
UnhideWhenUsed="false" Name="Colorful Grid Accent 3"/>
<w:LsdException Locked="false" Priority="60" SemiHidden="false"
UnhideWhenUsed="false" Name="Light Shading Accent 4"/>
<w:LsdException Locked="false" Priority="61" SemiHidden="false"
UnhideWhenUsed="false" Name="Light List Accent 4"/>
<w:LsdException Locked="false" Priority="62" SemiHidden="false"
UnhideWhenUsed="false" Name="Light Grid Accent 4"/>
<w:LsdException Locked="false" Priority="63" SemiHidden="false"
UnhideWhenUsed="false" Name="Medium Shading 1 Accent 4"/>
<w:LsdException Locked="false" Priority="64" SemiHidden="false"
UnhideWhenUsed="false" Name="Medium Shading 2 Accent 4"/>
<w:LsdException Locked="false" Priority="65" SemiHidden="false"
UnhideWhenUsed="false" Name="Medium List 1 Accent 4"/>
<w:LsdException Locked="false" Priority="66" SemiHidden="false"
UnhideWhenUsed="false" Name="Medium List 2 Accent 4"/>
<w:LsdException Locked="false" Priority="67" SemiHidden="false"
UnhideWhenUsed="false" Name="Medium Grid 1 Accent 4"/>
<w:LsdException Locked="false" Priority="68" SemiHidden="false"
UnhideWhenUsed="false" Name="Medium Grid 2 Accent 4"/>
<w:LsdException Locked="false" Priority="69" SemiHidden="false"
UnhideWhenUsed="false" Name="Medium Grid 3 Accent 4"/>
<w:LsdException Locked="false" Priority="70" SemiHidden="false"
UnhideWhenUsed="false" Name="Dark List Accent 4"/>
<w:LsdException Locked="false" Priority="71" SemiHidden="false"
UnhideWhenUsed="false" Name="Colorful Shading Accent 4"/>
<w:LsdException Locked="false" Priority="72" SemiHidden="false"
UnhideWhenUsed="false" Name="Colorful List Accent 4"/>
<w:LsdException Locked="false" Priority="73" SemiHidden="false"
UnhideWhenUsed="false" Name="Colorful Grid Accent 4"/>
<w:LsdException Locked="false" Priority="60" SemiHidden="false"
UnhideWhenUsed="false" Name="Light Shading Accent 5"/>
<w:LsdException Locked="false" Priority="61" SemiHidden="false"
UnhideWhenUsed="false" Name="Light List Accent 5"/>
<w:LsdException Locked="false" Priority="62" SemiHidden="false"
UnhideWhenUsed="false" Name="Light Grid Accent 5"/>
<w:LsdException Locked="false" Priority="63" SemiHidden="false"
UnhideWhenUsed="false" Name="Medium Shading 1 Accent 5"/>
<w:LsdException Locked="false" Priority="64" SemiHidden="false"
UnhideWhenUsed="false" Name="Medium Shading 2 Accent 5"/>
<w:LsdException Locked="false" Priority="65" SemiHidden="false"
UnhideWhenUsed="false" Name="Medium List 1 Accent 5"/>
<w:LsdException Locked="false" Priority="66" SemiHidden="false"
UnhideWhenUsed="false" Name="Medium List 2 Accent 5"/>
<w:LsdException Locked="false" Priority="67" SemiHidden="false"
UnhideWhenUsed="false" Name="Medium Grid 1 Accent 5"/>
<w:LsdException Locked="false" Priority="68" SemiHidden="false"
UnhideWhenUsed="false" Name="Medium Grid 2 Accent 5"/>
<w:LsdException Locked="false" Priority="69" SemiHidden="false"
UnhideWhenUsed="false" Name="Medium Grid 3 Accent 5"/>
<w:LsdException Locked="false" Priority="70" SemiHidden="false"
UnhideWhenUsed="false" Name="Dark List Accent 5"/>
<w:LsdException Locked="false" Priority="71" SemiHidden="false"
UnhideWhenUsed="false" Name="Colorful Shading Accent 5"/>
<w:LsdException Locked="false" Priority="72" SemiHidden="false"
UnhideWhenUsed="false" Name="Colorful List Accent 5"/>
<w:LsdException Locked="false" Priority="73" SemiHidden="false"
UnhideWhenUsed="false" Name="Colorful Grid Accent 5"/>
<w:LsdException Locked="false" Priority="60" SemiHidden="false"
UnhideWhenUsed="false" Name="Light Shading Accent 6"/>
<w:LsdException Locked="false" Priority="61" SemiHidden="false"
UnhideWhenUsed="false" Name="Light List Accent 6"/>
<w:LsdException Locked="false" Priority="62" SemiHidden="false"
UnhideWhenUsed="false" Name="Light Grid Accent 6"/>
<w:LsdException Locked="false" Priority="63" SemiHidden="false"
UnhideWhenUsed="false" Name="Medium Shading 1 Accent 6"/>
<w:LsdException Locked="false" Priority="64" SemiHidden="false"
UnhideWhenUsed="false" Name="Medium Shading 2 Accent 6"/>
<w:LsdException Locked="false" Priority="65" SemiHidden="false"
UnhideWhenUsed="false" Name="Medium List 1 Accent 6"/>
<w:LsdException Locked="false" Priority="66" SemiHidden="false"
UnhideWhenUsed="false" Name="Medium List 2 Accent 6"/>
<w:LsdException Locked="false" Priority="67" SemiHidden="false"
UnhideWhenUsed="false" Name="Medium Grid 1 Accent 6"/>
<w:LsdException Locked="false" Priority="68" SemiHidden="false"
UnhideWhenUsed="false" Name="Medium Grid 2 Accent 6"/>
<w:LsdException Locked="false" Priority="69" SemiHidden="false"
UnhideWhenUsed="false" Name="Medium Grid 3 Accent 6"/>
<w:LsdException Locked="false" Priority="70" SemiHidden="false"
UnhideWhenUsed="false" Name="Dark List Accent 6"/>
<w:LsdException Locked="false" Priority="71" SemiHidden="false"
UnhideWhenUsed="false" Name="Colorful Shading Accent 6"/>
<w:LsdException Locked="false" Priority="72" SemiHidden="false"
UnhideWhenUsed="false" Name="Colorful List Accent 6"/>
<w:LsdException Locked="false" Priority="73" SemiHidden="false"
UnhideWhenUsed="false" Name="Colorful Grid Accent 6"/>
<w:LsdException Locked="false" Priority="19" SemiHidden="false"
UnhideWhenUsed="false" QFormat="true" Name="Subtle Emphasis"/>
<w:LsdException Locked="false" Priority="21" SemiHidden="false"
UnhideWhenUsed="false" QFormat="true" Name="Intense Emphasis"/>
<w:LsdException Locked="false" Priority="31" SemiHidden="false"
UnhideWhenUsed="false" QFormat="true" Name="Subtle Reference"/>
<w:LsdException Locked="false" Priority="32" SemiHidden="false"
UnhideWhenUsed="false" QFormat="true" Name="Intense Reference"/>
<w:LsdException Locked="false" Priority="33" SemiHidden="false"
UnhideWhenUsed="false" QFormat="true" Name="Book Title"/>
<w:LsdException Locked="false" Priority="37" Name="Bibliography"/>
<w:LsdException Locked="false" Priority="39" QFormat="true" Name="TOC Heading"/>
</w:LatentStyles>
</xml><![endif]-->
<!--[if gte mso 10]>
<style>
/* Style Definitions */
table.MsoNormalTable
{mso-style-name:"Table Normal";
mso-tstyle-rowband-size:0;
mso-tstyle-colband-size:0;
mso-style-noshow:yes;
mso-style-priority:99;
mso-style-parent:"";
mso-padding-alt:0cm 5.4pt 0cm 5.4pt;
mso-para-margin-top:0cm;
mso-para-margin-right:0cm;
mso-para-margin-bottom:8.0pt;
mso-para-margin-left:0cm;
line-height:107%;
mso-pagination:widow-orphan;
font-size:11.0pt;
font-family:Calibri;
mso-ascii-font-family:Calibri;
mso-ascii-theme-font:minor-latin;
mso-hansi-font-family:Calibri;
mso-hansi-theme-font:minor-latin;
mso-ansi-language:EN-US;}
</style>
<![endif]-->
<!--StartFragment-->
<h1><b><span lang="EN-US" style="line-height: 107%; font-family: Arial;"><span style="font-size: 14px;">Registrar
Stakeholder Group Comment on the ICANN Reserve Fund –Rationale and Target Level</span><font size="4"><o:p></o:p></font></span></b></h1><p class="MsoNormal"><span lang="EN-US" style="mso-bidi-font-size:12.0pt;
line-height:107%;font-family:Arial"> </span></p><p class="MsoNormal" style="margin-bottom: 0.0001pt;"><span lang="EN-US" style="mso-bidi-font-size:12.0pt;font-family:Arial">The
RrSG considers that the proposed ICANN Reserve Funding proposal is well thought
out and researched. The use of comparisons to other not-for-profits was
appropriate. Estimates of what is needed in reserve are by their nature a
series of deductions based on foreseen contingencies. Consequently
deliberations about the optimal size of a reserve fund must reflect a number of
considerations. What are the reasonable
risks? How long must the organization be able to run without revenues? How independent
should the ICANN structure be from its sources of revenue? What is lavish and
what is a prudent? The Registrars recognize that opinions will differ on
reasonable grounds, and as a group they have clear interests to advance and
concerns to express.<o:p></o:p></span></p><p class="MsoNormal" style="margin-bottom: 0.0001pt;"><b><span lang="EN-US" style="mso-bidi-font-size:12.0pt;font-family:Arial"> </span></b></p><p class="MsoNormal" style="margin-bottom: 0.0001pt;"><b><span lang="EN-US" style="mso-bidi-font-size:12.0pt;font-family:Arial">Registrars’ concerns<o:p></o:p></span></b></p><p class="MsoNormal" style="margin-bottom: 0.0001pt;"><span lang="EN-US" style="mso-bidi-font-size:12.0pt;font-family:Arial">The
Registrars are concerned with two questions: the size of the reserves, and
therefore the duration of the time that ICANN should be expected to run without
further revenues, and the sources of the money intended as reserves: what
sources should be used, in what order, and what sources should not be used.<o:p></o:p></span></p><p class="MsoNormal" style="margin-bottom: 0.0001pt;"><b><span lang="EN-US" style="mso-bidi-font-size:12.0pt;font-family:Arial"> </span></b></p><p class="MsoNormal" style="margin-bottom: 0.0001pt;"><b><span lang="EN-US" style="mso-bidi-font-size:12.0pt;font-family:Arial">Duration of reserves<o:p></o:p></span></b></p><p class="MsoNormal" style="margin-bottom: 0.0001pt;"><span lang="EN-US" style="mso-bidi-font-size:12.0pt;font-family:Arial">There
was no support whatever for a duration of reserves longer than 12 months. Some
members considered that even 12 months of funding at current expenditure levels
was excessive for the intended purpose of the reserves. Those members stated a
preference that the reserves be held strictly for the purpose of winding down
ICANN in the event that that becomes necessary. A majority of RrSG members
considered that a twelve month reserve suitable for the purpose of running the
organization was reasonable. <o:p></o:p></span></p><p class="MsoNormal" style="margin-bottom: 0.0001pt;"><span lang="EN-US" style="mso-bidi-font-size:12.0pt;font-family:Arial"> </span></p><p class="MsoNormal" style="margin-bottom: 0.0001pt;"><b><span lang="EN-US" style="mso-bidi-font-size:12.0pt;font-family:Arial">Sources of the reserves<o:p></o:p></span></b></p><p class="MsoNormal" style="margin-bottom: 0.0001pt;"><span lang="EN-US" style="mso-bidi-font-size:12.0pt;font-family:Arial">It
was the strong feeling of the Registrars that ICANN was living on a rich diet,
that administration was top-heavy, and this in turn generated a wariness
towards allowing one-time uses of reserve funds to make up for budget deficits.
It was recognized that benefits once extended, and habits once ingrained, would
render it difficult to roll back or restrain. <o:p></o:p></span></p><p class="MsoNormal" style="margin-bottom: 0.0001pt;"><span lang="EN-US" style="mso-bidi-font-size:12.0pt;font-family:Arial"> </span></p><p class="MsoNormal" style="margin-bottom: 0.0001pt;"><span lang="EN-US" style="mso-bidi-font-size:12.0pt;font-family:Arial">Of
supreme importance, Registrars also state their opposition to any proposed
increase (temporary or permanent) in Registrar per-domain fees to replenish the
reserve fund. Replenishing and
maintaining the fund must be incorporated in to ICANN’s budget, and shortfalls
should not be borne by registrants, but by cutting expenses elsewhere in the
organization. In this regard it was proposed that, for greater transparency on
the expense side, Registrars request that ICANN-Finance identify Board expenses
directly related to Board governance activities as distinct from those of
representing ICANN in various venues.<o:p></o:p></span></p><p class="MsoNormal" style="margin-bottom: 0.0001pt;"><span lang="EN-US" style="mso-bidi-font-size:12.0pt;font-family:Arial">Second,
registrars expressed concern that ICANN should not use the gTLD auction proceeds
for purposes of replenishing the reserves. The group considers that such an act
would run counter to the stated purpose of the gTLD auction proceeds and could
set a dangerous precedent for future ICANN funding. If once registrars allowed
such a practice, it is believed that ICANN would tend to make a habit of
over-spending its budget, drawing down the reserves to cover the shortfall,
then replenishing the reserves from the auction fund, thereby turning auction
proceeds into an additional source of funding to cover ICANN over-expenditure.<o:p></o:p></span></p><p class="MsoNormal" style="margin-bottom: 0.0001pt;"><span lang="EN-US" style="mso-bidi-font-size:12.0pt;font-family:Arial">According
to the <i>New gTLD Auction Proceeds
Discussion Paper, Updated<a href="#_ftn1" name="_ftnref1" title=""><span class="MsoFootnoteReference"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><b><span lang="EN-US" style="font-size: 12pt; line-height: 107%;">[1]</span></b></span><!--[endif]--></span></a></i>the
complete set of uses of the auction proceeds have not finally be agreed upon,
but no one has contemplated auction proceeds should be used for establishing
reserves. It cited the New gTLD Applicant Guidebook as follows:<o:p></o:p></span></p><p class="MsoNormal" style="margin-bottom: 0.0001pt;"><span lang="EN-US" style="mso-bidi-font-size:12.0pt;font-family:Arial"> </span></p><div style="margin: 0cm 0cm 0.0001pt 36pt;"><span lang="EN-US" style="mso-bidi-font-size:12.0pt;font-family:Arial">“The purpose of an auction
is to resolve contention in a clear, objective manner. It is planned that costs
of the new gTLD program will offset by fees, so any funds coming from a last
resort contention resolution mechanism such as auctions would result (after
paying for the auction process) in additional funding. Any proceeds from
auctions will be reserved and earmarked until the uses of funds are determined.
Funds must be used in a manner that supports directly ICANN’s Mission and Core
Values and also allows ICANN to maintain its not for profit status. <o:p></o:p></span></div><div style="margin: 0cm 0cm 0.0001pt 36pt;"><span lang="EN-US" style="mso-bidi-font-size:12.0pt;font-family:Arial"> </span></div><div style="margin: 0cm 0cm 0.0001pt 36pt;"><span lang="EN-US" style="mso-bidi-font-size:12.0pt;font-family:Arial">Possible uses of auction
funds include formation of a foundation with a clear mission and a transparent
way to allocate funds to projects that are of interest to the greater Internet
community, such as grants to support new gTLD applications or registry
operators from communities in subsequent gTLD rounds, the creation of an
ICANN-administered/community based fund for specific projects for the benefit
of the Internet community, the creation of a registry continuity fund for the
protection of registrants (ensuring that funds would be in place to support the
operation of a gTLD registry until a successor could be found), or
establishment of a security fund to expand use of secure protocols, conduct
research, and support standards development organizations in accordance with
ICANN's security and stability mission.”<o:p></o:p></span></div><div style="margin: 0cm 0cm 0.0001pt 36pt;"><span lang="EN-US" style="mso-bidi-font-size:12.0pt;font-family:Arial"> </span></div>
<div style="mso-element:para-border-div;border:none;border-bottom:solid windowtext 1.5pt;
padding:0cm 0cm 1.0pt 0cm"><p class="MsoNormal" style="margin-bottom: 0.0001pt; border: none; padding: 0cm;"><span lang="EN-US" style="mso-bidi-font-size:
12.0pt;font-family:Arial">New gTLD Applicant Guidebook –Section 4.3. <o:p></o:p></span></p><p class="MsoNormal" style="margin-bottom: 0.0001pt; border: none; padding: 0cm;"><span lang="EN-US" style="mso-bidi-font-size:
12.0pt;font-family:Arial">Third, the Registrars considered that, independently
of the preceding considerations, other reserves should be used in priority to
auction funds, namely the funds set aside as litigation reserves. Accordingly,
the registrars consider that a reserve policy must address the issue of the
priority of use of various reserve funds: in what order they should be drawn
down, and they consider that unused litigation reserves should be used before
registrars are called upon to top up general reserves.<o:p></o:p></span></p><p class="MsoNormal" style="margin-bottom: 0.0001pt; border: none; padding: 0cm;"><span lang="EN-US"> </span></p>
</div>
<div><!--[if !supportFootnotes]--><br clear="all">
<hr align="left" size="1" width="33%">
<!--[endif]-->
<div id="ftn1"><p class="MsoFootnoteText"><a href="#_ftnref1" name="_ftn1" title=""><span class="MsoFootnoteReference"><span lang="EN-US"><!--[if !supportFootnotes]--><span class="MsoFootnoteReference"><span lang="EN-US" style="font-size:10.0pt;line-height:
107%;font-family:"Times New Roman";mso-fareast-font-family:Calibri;mso-fareast-theme-font:
minor-latin;mso-bidi-theme-font:minor-bidi;mso-ansi-language:EN-US;mso-fareast-language:
EN-US;mso-bidi-language:AR-SA">[1]</span></span><!--[endif]--></span></span></a><span lang="EN-US"> <a href="https://gnso.icann.org/en/drafts/new-gtld-auction-proceeds-07dec15-en.pdf">https://gnso.icann.org/en/drafts/new-gtld-auction-proceeds-07dec15-en.pdf</a><o:p></o:p></span></p>
</div>
</div>
<!--EndFragment--></div></body></html>