[Comments-fy19-budget-19jan18] ICANNwiki, Fellowship Program, and Reserve Fund

[Kurt Pritz]

I. 

ICANNwiki. While it is not the most important issue confronting ICANN or the ICANN budget, I find the potential elimination of funding for the ICANNwiki highly discouraging. 

The ICANNwiki has been an essential part of the ICANN culture for many years. Importantly, it has provided an interesting and in-depth online history of ICANN through the ICANNwiki pages - the most easily searchable historical database available of ICANN personalities and issues. The ICANNwiki meeting interviews and the playing card deck are a vital part of the ICANN culture - often saving ICANN meetings from terminal ennui. ICANNwiki describes the ICANN mission and methodology in a clear, objective way that is helpful to newcomers and not-so-newcomers. 

As the ICANN budget (and its corresponding activity) has grown over 800% since ICANNwiki was first launched, the small amount of funding ICANNwiki receives is necessary to catalogue that history. If ICANN were to take over this role, it would surely be significantly more expensive. The ICANNwiki is an independent resource to which ICANN can point that provides validation fro its mission and work.

We should not put this ICANN institution and valuable resource at risk. [As part of the budgeting process, ICANN could list each funded outside program so that the community can see the relative cost and benefit.] 

II.

Fellowship Program. The Fellowship Program, as conceived by Jacob Malthouse and brought to fruition by Janice Douma Lange has been a significant success. How many ICANN programs do we know that delivered on its objectives in this way? An objection application process was implemented an operated without controversy. ICANN fellows have become Board members, staff members and SO/AC members. What other program has produced that?

Admittedly, tweaks are necessary. I would: limit public forum participation to those who learn about and comment on specific policy issues; create certain deliverables such as each fellow reaching 30 or more members in their community regarding ICANN; and installation of new, vibrant and engaged leadership. I am not against trimming the number of participants to make participation more valuable. 

Nonetheless, I see the Fellowship Program as an ICANN success and the argument over its funding as a turf battle in the name of parochial interests and coveted travel dollars. 

III.

Reserve fund. Recent discussions have suggested these solutions to restore the former reserve fund level. 

1) increased contracted party fees
2) use of auction funds
3) use of gTLD application fees

Each of these is unacceptable. 

First, the reserve fund can be replenished over many years; there is no rush. The important metric is not the amount of annual replenishment but the direction. So long as ICANN establishes and manages to a budget with an annual surplus, that is fine. We need not pay it all back in 2, 4 or more years. 

The reserve fund was created to protect against the cessation of funds, not against unexpected expenses. Unexpected expenses should be managed by the CEO. If funds are drained by an unexpected need, those funds must be replaced by reducing some other internal use of the funds. The organization must be managed to accommodate that. CEOs are faced with these issues every year and deal with them in this way. If ICANN does this also, then a positive cash flow can be maintained. 

Use of excess applications fees is a clear violation of ICANN policy that states that application fees should cover application costs. I don’t see any allowable use of the funds beyond a refund to applicants or the funding of a program agreed by a consensus of the applicants. 

Similarly, use of auction funds to fund a reserve requires community approval. I, for one, can not imagine a worse use of funds that to reserve them against the occurrence of ICANN budget dilemma.  

The exhaustion of reserve funds occurred due to the fiscal mismanagement of the IANA transition and inexplicable over-estimation or registry fees. Both of these lessons should have caused the Board and staff to implement better management controls and judgment. 

Finally, increasing registry and registrar fees reminds me of my water company. They enforced strict conservation practices and (gasp!) their revenue went down. So they proposed to raise water rates and the community rained down on them — complaining of bloated overhead and staffs. The rate increase was beaten back. 

When contracted parties first agreed to per domain registration fees, then CEO Paul Twomey promised (paraphrasing), “ICANN’s fate is tied to yours - as your revenue increases, so will ours, if your revenue decreases, ICANN will suffer that with you.” 

The “shortfall” in revenue is nothing but a management error in judgment when budgeting. That error should not result in a fee increase. It violates the original commitment made when the contracted parties supported ICANN by approving per domain registration fees. 

Thank you,

Kurt Pritz