[Ccwg-auctionproceeds] Judith Hellerstein's comments on the Auction Proceeds Draft

[Sam Lanfranco]

Thank You Marilyn for your comments. /I will not copy my posting and 
your comments, but cut to the chase and focus on three direct issues./

First, to get it out of the way, you ask why I see a (any) portfolio 
strategy managing the proceeds as risky. Most economists generally agree 
that the flood of cheap money, through Quantitative Easing (QE) by 
central banks has fueled the unprecedented rise in asset values since 
the 2008 financial disaster, /and -I might add- the unprecedented 
concentration of income and wealth/. With essentially negative interest 
rates this is an unsustainable situation. When it unravels, quickly or 
slowly, there will be a major downward adjustment in asset values, 
putting any portfolio strategy at risk, including those containing ICANN 
funds. Such is life.

Second, when I look into my economist’s crystal ball, there is a high 
probability that the existing auction proceeds were a product of the 
times, and unlikely to be followed by substantial new auction revenues.

Third, be that as it may, I would suggest that whatever strategy ICANN 
selects, it not place any new auction revenues into the existing pot, 
but segregate them for the time being. We should consider setting a 
timeline, say after three rounds of grants from the current revenues, 
for a review of lessons learned from the process to date, and possibly 
initiate a new policy development process so that the auction revenue 
policies can be revised in light of lessons learned. This is new 
territory for the ICANN community, and that is even more true for the 
ICANN staff.

Sam

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