[Comments-reserve-fund-12oct17] ICANN Reserve Fund – Public Comment on Rationale and Target Level

[John Poole]

 ICANN Reserve Fund – My Comment on Rationale and Target Level

I have reviewed the open comment webpage
<https://www.icann.org/public-comments/reserve-fund-2017-10-12-en>, read
the attachment https://www.icann.org/en/system/files/files/draft-
reserve-fund-12oct17-en.pdf, and reviewed other sources of information. I
will concede upfront that I probably have a more conservative approach than
many in the ICANN community who appear "ready to spend" ICANN's last red
cent!

For example, without more information, the comparison of ICANN to CIRA, or
Nominet, appears ludicrous. ICANN is a unique global organization with
immense exposure and unknown, unquantifiable, potential liabilities due to:
1) end of the U.S. government (IANA) contract; and 2) expansion of new
gTLDs beginning in 2014 (adding complexity to a system often increases
fragility or vulnerabilities). In addition, ICANN is (along with Verisign)
one of the most important root server operators upon which the global
internet DNS depends. Malicious threats and vulnerabilities, some attacking
(or hijacking) the DNS root <https://en.wikipedia.org/wiki/DNS_hijacking>,
continue to appear. Network science and technology will continue to evolve,
as will vulnerabilities. Research, defense, security, continual
improvements, and *incident recovery*, cost money, and catastrophic
incident insurance coverage is probably not a viable option. Issues such as
have arisen with the Root Zone KSK Rollover, are just the tip of the
iceberg. Any event that forced ICANN to seek protection under Chapter 11 of
the U.S. Bankruptcy Code could very well end ICANN's role in "coordinating"
the internet. For that reason alone, it might be advisable for ICANN to
consider "spinning off" its technical and root server operations into a
separate "affiliate" (similar to, but separate from, PTI).

For the reasons above, I would suggest, at a minimum, an "operating
reserves fund
<http://www.nonprofitaccountingbasics.org/reporting-operations/about-operating-reserves-nonprofits>"
of 24 months Opex. In addition, I suggest ICANN consider creating a "strategic
reserves fund <https://en.wikipedia.org/wiki/Strategic_reserve>" of $200
million--funded from the auction proceeds ($235M) and application fees
($128M)--of which $100 million could be released for disbursement after
five years if there proves to be "no need" for that level of "strategic
reserves," with the balance released five years thereafter if not needed.
Sincerely,
John Poole
Domain Name Registrant and Editor, DomainMondo.com
<http://www.DomainMondo.com>
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