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Just to add to the notion of a "Credit" vs. "Refund". A significant number of applicants either withdraw their applications or be eliminated through contention, lack of success in the application process, advice, etc. A credit does no good for these applicants
because they will have nothing to credit against. </div>
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I do not see a way around making this a refund as opposed to a credit.</div>
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<div id="divRplyFwdMsg" dir="ltr"><font face="Calibri, sans-serif" style="font-size:11pt" color="#000000"><b>From:</b> SubPro-IRT <subpro-irt-bounces@icann.org> on behalf of Christa Taylor <Christa@tldz.com><br>
<b>Sent:</b> Thursday, June 13, 2024 12:35 AM<br>
<b>To:</b> Rubens Kuhl <rubensk@nic.br>; Next Round Policy Implementation <NextRound_PolicyImplementation@icann.org>; subpro-irt@icann.org <subpro-irt@icann.org><br>
<b>Subject:</b> Re: [SubPro-IRT] Application Fee FAQ</font>
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<p class="x_MsoNormal">Thank you Elisa and Lars,</p>
<p class="x_MsoNormal"><span style="font-size:11.0pt"> </span></p>
<p class="x_MsoNormal">I apologize for not being able to attend due to time zone differences.
</p>
<p class="x_MsoNormal"> </p>
<p class="x_MsoNormal">I want to support the requests for more detailed costing information along with some concerns.</p>
<p class="x_MsoNormal"> </p>
<p class="x_MsoNormal">In November 2016, Work Track 1 was tasked with evaluating the accuracy of cost estimates and reviewing the methodology used to develop the cost model. However, after months of requests, ICANN was unable to provide any information on the
costs and methodology used in the 2009 application fees. Consequently, we could not properly address the Implementation Guideline B regarding the concept of differing application fees for different applicants and the potential creation of new application types,
which may have necessitated a new costing analysis based on recommended changes (section 4.2.17 at
<a href="https://community.icann.org/download/attachments/58735931/Section%204.2.17.pdf?version=1&modificationDate=1460741334000&api=v2">
https://community.icann.org/download/attachments/58735931/Section%204.2.17.pdf?version=1&modificationDate=1460741334000&api=v2</a> ).</p>
<p class="x_MsoNormal"> </p>
<p class="x_MsoNormal">Since we were unable to attain the information, the working group wanted to ensure the scenario would not occur in the future rounds and emphasized the need for detailed and transparent disclosure of fees and methodologies to the community.
The Final Report reflects this:</p>
<ul type="disc" style="margin-top:0cm">
<li class="x_MsoListParagraph" style="margin-left:0cm">Top 15: Application Fees: “<i>The development of the application fee must be fully transparent, with all cost assumptions explained and documented</i>” (p. 66).</li><li class="x_MsoListParagraph" style="margin-left:0cm">Working Group Emphasis: <i>
ICANN should be fully transparent about how the application fee is developed, explaining and documenting all cost assumptions (</i>p. 69).</li><li class="x_MsoListParagraph" style="margin-left:0cm">Summary of Outputs: “<i>The development of the application fee must be fully transparent, with all cost assumptions explained and documented</i>” (p. 249).</li></ul>
<p class="x_MsoNormal"> </p>
<p class="x_MsoNormal">Two additional points:</p>
<p class="x_MsoNormal"> </p>
<p class="x_MsoNormal">1. Application Fees and Deterrence: I understand wanting to be conservative approach to ensure costs are recovered however, this should be based on probabilities not extreme cases as provided with the 500 and 1,000 volume levels. Also,
the scenarios presented suggest providing excess fees as a ‘credit’, but we recommended the option of a refund if the amount exceeded $1,000 (or another nominal amount) with a disbursement schedule based on milestones to avoid delays. This would ensure that
applicants don't prepay their yearly ICANN fees, for an extended period, during a critical time when those funds could be utilized to launch and support the operation of their TLD(s).</p>
<p class="x_MsoNormal"> </p>
<p class="x_MsoNormal">2. The working group noted that only historical costs directly related to implementing the New gTLD Program should be part of the cost structure for determining application fees.
</p>
<p class="x_MsoNormal"><i>“The Working Group believes, however, that for subsequent procedures the only historical costs that should be part of the cost structure in determining application fees are those actual costs directly related to the implementation
of the New gTLD Program”.</i> (p. 65). "Org Shared Services" do not align with this, as they are “<i>not directly attributable to a program or project</i>”. Additionally, it would be helpful to determine whether the $70k per application in implementation
fees also includes past shared services amounts and, if they do, the amount included within the $70k.</p>
<p class="x_MsoNormal"> </p>
<p class="x_MsoNormal">Without relevant details and transparency on the costs, it becomes difficult to understand the full picture, hinders analysis, and prevents the attainment of useful insights that can be utilized in future rounds and in the development
of future policies.</p>
<p class="x_MsoNormal"> </p>
<p class="x_MsoNormal">Apologies for the length, it was supposed to be a short email!
</p>
<p class="x_MsoNormal"> </p>
<p class="x_MsoNormal"><span style="font-size:11.0pt">Kind regards,</span></p>
<p class="x_MsoNormal"><span style="font-size:11.0pt"> </span></p>
<p class="x_MsoNormal"><span style="font-size:11.0pt">Christa</span></p>
<p class="x_MsoNormal"><span style="font-size:11.0pt"> </span></p>
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<p class="x_MsoNormal"><b><span lang="EN-US" style="font-size:11.0pt; font-family:"Calibri",sans-serif">From:</span></b><span lang="EN-US" style="font-size:11.0pt; font-family:"Calibri",sans-serif"> SubPro-IRT <subpro-irt-bounces@icann.org>
<b>On Behalf Of </b>Rubens Kuhl via SubPro-IRT<br>
<b>Sent:</b> Wednesday, June 12, 2024 8:00 PM<br>
<b>To:</b> Next Round Policy Implementation <NextRound_PolicyImplementation@icann.org>; subpro-irt@icann.org<br>
<b>Subject:</b> Re: [SubPro-IRT] Application Fee FAQ</span></p>
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<p class="x_MsoNormal"> </p>
<p class="x_MsoNormal"> </p>
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<p class="x_MsoNormal"><br>
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<blockquote style="margin-top:5.0pt; margin-bottom:5.0pt">
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<p class="x_MsoNormal">Em 12 de jun. de 2024, à(s) 09:01, Next Round Policy Implementation <<a href="mailto:NextRound_PolicyImplementation@icann.org">NextRound_PolicyImplementation@icann.org</a>> escreveu:</p>
</div>
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<p class="x_MsoNormal"><span style="font-size:11.0pt">Dear IRT members,<span class="x_apple-converted-space"> </span></span></p>
</div>
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<p class="x_MsoNormal"><span style="font-size:11.0pt"> </span></p>
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<p class="x_MsoNormal"><span style="font-size:11.0pt">In preparation for<span class="x_apple-converted-space"> </span><a href="https://community.icann.org/x/zIBAEw"><span style="color:#467886">tomorrow's IRT meeting</span></a>, ICANN org has prepared the attached
FAQ which aims to address the various questions that have been raised both in relation to the RSP fee as well as the gTLD evaluation fee</span><span lang="EN-GB" style="font-size:11.0pt">.</span><span style="font-size:11.0pt"></span></p>
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<p class="x_MsoNormal"><span lang="EN-GB" style="font-size:11.0pt"> </span><span style="font-size:11.0pt"></span></p>
</div>
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<p class="x_MsoNormal"><span lang="EN-GB" style="font-size:11.0pt">Best regards,</span><span style="font-size:11.0pt"></span></p>
</div>
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<p class="x_MsoNormal"><span lang="EN-GB" style="font-size:11.0pt">Elisa</span><span style="font-size:11.0pt"></span></p>
</div>
<div>
<p class="x_MsoNormal"><span style="font-size:11.0pt"> </span></p>
</div>
<div>
<p class="x_MsoNormal"><span lang="EN-GB" style="font-size:11.0pt"> </span><span style="font-size:11.0pt"></span></p>
</div>
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</blockquote>
<p class="x_MsoNormal"> </p>
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<p class="x_MsoNormal">Some comments about the FAQ:</p>
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<p class="x_MsoNormal"> </p>
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<p class="x_MsoNormal">- In the RSP fee, it lacks a comparison to the USD 14k required for an unknown RSP to be evaluated for serving 2012 gTLDs. </p>
</div>
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<p class="x_MsoNormal">- It’s not mentioned whether applicants will be allowed to commit to use an evaluated RSP or can only choose already evaluated ones</p>
</div>
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<p class="x_MsoNormal">- In item 3, it’s mentioned that TMCH fees are not included. In 2012, registries got their TMCH fees back after being initially charged, so in effect, there was no additional payment of TMCH fees beyond the application fee. Changing that
is not supported by any SubPro recommendation. </p>
</div>
<div>
<p class="x_MsoNormal">- As mentioned by Seb during the session, some organizations might have challenges receiving the excess funding. So while it’s good to be the default to return the excess, giving applicants the option to not get that excess back solves
for corner cases regarding tax or foreign exchange regulations. Applicants would only have to say they want it or not want it (no lingering). </p>
</div>
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<p class="x_MsoNormal"> </p>
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<p class="x_MsoNormal"> </p>
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<div>
<p class="x_MsoNormal">About the fee for joint venture review, if joint venture ends up playing a role in auctions, perhaps auction proceeds should pay for those. </p>
</div>
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<p class="x_MsoNormal"> </p>
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<p class="x_MsoNormal">About the fee for lingering applications, I support the idea. Currently there is an asymmetrical relationship between letting it linger (Cranberries song playing in the background) and the Org costs. The hard issue, though, is defining
it, since there should be no prevention of the use of accountability mechanisms or limited appeal processes created by that cost, but that can’t also trigger an excessive use of such mechanisms only to avoid the lingering fee. </p>
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<p class="x_MsoNormal"> </p>
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<p class="x_MsoNormal">About the IDN Variant subsidy, agree with Edmon on changing its name, but I also add that this could be funded from fee leftovers (either from previous round or forecast of this round) or even Auctions leftovers. This would be aligned
with guidelines to such expenditures, I believe. While this won’t change the application fee by any significant amount either way (circa 1%), this would simplify the fee determination and also could back ICANN claims to support multilingual development of
the Internet. </p>
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<p class="x_MsoNormal"> </p>
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<p class="x_MsoNormal"> </p>
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<p class="x_MsoNormal">Rubens</p>
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