[Gnso-newgtld-wg-wt1] [EXTERNAL] Work Track 1 Agenda for 8 August 2017 @ 3:00 UTC

Sun Aug 6 22:23:21 UTC 2017

Donna,

I believe the data points you mentioned do exist, in the form of the actual expenses incurred by ICANN in the 2012-round. And considering the gains of scale foreseen by aggregating technical evaluation per back-end, with or without RSP program, the actual cost for further rounds is clearly expected to be lower. 

But we could adopt something in between specifying a new application fee and the reimbursement idea, like this:
- Application fee will be no less than 50% of the 2012-round fee, and designed to be of a cost-recovery target; in the event it generates more surplus than expected, the reimbursement will be available either as credit towards registry fees for successful applicants or reimbursement for non-approved or drop-out applicants. 

One issue to calculate the reimbursement is how much does the legal reserves need to be; the 2012-round proved that litigation either thru internal accountability or legal courts will happen, but how much ? If someone from the work track, or someone from ICANN Board risk committee, could provide an actuary's point of view would be interesting. 

We should note that 2012-round applicants got a 4 to 6 years time-to-market advantage, and that could be worth much more than the application fee difference. 

Rubens

> On Aug 4, 2017, at 7:13 PM, Austin, Donna via Gnso-newgtld-wg-wt1 <gnso-newgtld-wg-wt1 at icann.org> wrote:
> 
> Hi Sara, all
>  
> I’ve had a look at the responses to the CC2 responses as they relate to Application Fees and believe that the responses are largely consistent with the discussions we have already had within the working group on this topic. 
>  
> My rudimentary analysis of the comments suggest the following:
>  
> Based on the CC2 responses it would appear that most of the respondents support the principle of an application fee that is cost neutral or break even, which is consistent with the cost-recovery model that was developed for the 2012 round. However, many of the responses acknowledge that the assumptions of the 2012 round was off the mark because the number of applications exceeded expectations and resulted in a considerable surplus of funds (approximately $100M).
>  
> It would appear from the responses that there is little support for maintaining the $185,000 application fee into the future, with many responses suggesting a reduction, with the exception of John Poole who recommended that each applicant require a $1m deposit. However, there was support for the principle that the application fee should maintain a bar sufficient to ensure that applications are worth dedicating resources to evaluation and processing; and fees should not be too low as to be detrimental to security and stability and competition between rounds.
>  
> It would also appear that there is support for the WG providing direction on the use of excess funds, in the event that future rounds result in a surplus of funds.
>  
> Some suggested considerations for moving this conversation forward:
> ·        While it appears that there is consensus around the concept of an application that achieves the principle of cost-recovery, it is impossible for this group to come up with an actual number for any future round because we have no way to predict how many applications there will be.
> ·        The number of applications for a future application window will depend on a range of factors, including the amount of the application fee.
> ·        We could ask ICANN to provide estimates for costs associated with preparing for the next application window, but I don’t believe we are far along in deciding some of the core issues to provide them with enough guidance on which to base any estimates or predictions.
> ·        What we do have from the 2012 application round is an application fee of $185,000 that resulted in 1930 applications—some 1400 more than was predicted.
>  
> The policy for the WG could potentially be something along the lines of:
> ·        The application fee should be based on the principle of cost recovery.
> ·        Based on the principles of fairness and competition to 2012 new gTLD applications, $185,000 will be the application fee for any future application window.
> ·        In the event of surplus application fees, ICANN will provide all applicants (successful/unsuccessful?) with a reimbursement of an equal share of the surplus application fees; or
> ·        In the event of surplus applications fees, ICANN will provide all applicants a reimbursement up to an amount of $50,000/$80,000/$100,000 (successful applicants may choose this reimbursement as a contribution to ICANN’s annual fee); and
> ·        The remainder of the surplus application fees will be used to support ICANN’s efforts in Universal Awareness and Universal Acceptance (or some other designated activity)
>  
> Some exemptions/exceptions:
> ·        Applications from underserved regions would/could (depending on the policy) have the application fee waived so that it is not considered a barrier to entry.
> ·        There may be other exclusions or exemptions from the application fee that could be developed to remove other possible barriers to entry perceived by some as being too high.
>  
> Rationale:
> ·        We have a principle of cost recovery, but rather than requiring complex economic modelling (or somebody’s best guess) to arrive at the amount of the application fee, we achieve the principle in an order of reverse by providing a reimbursement of a portion of the application fee equal to the distribution of excess funds.
>  
> I don’t believe we can solve this problem absent a considerable amount of data that at this point in time simply doesn’t exist, so I offer this as a possible way to enable us to move forward and certainly to encourage discussion.
>  
> Donna
>  
> From: gnso-newgtld-wg-wt1-bounces at icann.org [mailto:gnso-newgtld-wg-wt1-bounces at icann.org] On Behalf Of Sara Bockey
> Sent: Thursday, August 03, 2017 9:31 AM
> To: gnso-newgtld-wg-wt1 at icann.org
> Subject: [EXTERNAL] [Gnso-newgtld-wg-wt1] Work Track 1 Agenda for 8 August 2017 @ 3:00 UTC
>  
> Dear All,
>  
> The next call for the New gTLD Subsequent Procedures Sub Team – Track 1 - Overall Process/Support/Outreach Issue will take place on Tuesday, 8 August 2017 at 3:00 UTC.
>   
> The proposed agenda is as follows:
>  
> Welcome & Agenda Overview
> SOIs
> Review of CC2 responses to WT1 questions
> Application Fees
> Systems
> AOB
>   
> The CC2 responses we will be covering may be review in the google document:   https://docs.google.com/spreadsheets/d/1427pgTCkguOj2NZZzMnz_H_lPe54dtvUErSJd9uhkZw/edit#gid=1442059046 <https://urldefense.proofpoint.com/v2/url?u=https-3A__docs.google.com_spreadsheets_d_1427pgTCkguOj2NZZzMnz-5FH-5FlPe54dtvUErSJd9uhkZw_edit-23gid-3D1442059046&d=DwMGaQ&c=MOptNlVtIETeDALC_lULrw&r=CwipU91YB6EkpFXK9ynnT_QUef4yC5p7jpsDm8cU97g&m=KxXpBeMo6gbRQ-BqdZ0TqFv_TRF2rGQiCdN-DB_qN84&s=4vy3M-5mmpfeBvqqyXWRPSI-t6ZrUwBiYzDw4G8yxqQ&e=>.
>  
> Chat soon!
>  
> Sara
>  
> sara bockey
> policy manager | GoDaddy™
> sbockey at godaddy.com <mailto:sbockey at godaddy.com>  480-366-3616
> skype: sbockey
>  
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