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Community calls on ICANN to cut staff spending

Kevin Murphy, March 11, 2018, Domain Policy

ICANN should look internally to cut costs before swinging the scythe at the volunteer community.

That’s a key theme to emerge from many comments filed by the community last week on ICANN’s fiscal 2019 budget, which sees spending on staff increase even as revenue stagnates and cuts are made in other key areas.

ICANN said in January that it would have to cut $5 million from its budget for the year beginning July 1, 2018, largely due to a massive downwards revision in how many new gTLD domains it expects the industry to process.

At the same time, the organization said it will increase its payroll by $7.3 million, up to $76.8 million, with headcount swelling to 425 by the end of the fiscal year and staff receiving on average a 2% pay rise.

In comments filed on the budget, many community members questioned whether this growth can be justified.

Among the most diplomatic objections came from the GNSO Council, which said:

In principle, the GNSO Council believes that growth of staff numbers should only occur under explicit justification and replacements due to staff attrition should always occur with tight scrutiny; especially in times of stagnate funding levels.

The Council added that it is not convinced that the proposed budget funds the policy work it needs to do over the coming year.

The Registrars Stakeholder Group noted the increased headcount with concern and said:

Given the overall industry environment where organizations are being asked to do more with less, we are not convinced these additional positions are needed… The RrSG is not yet calling for cuts to ICANN Staff, we believe the organization should strive to maintain headcount at FY17 Actual year-end levels.

The RrSG shared the GNSO Council’s concern that policy work, ICANN’s raison d’etre, may suffer under the proposed budget.

The At-Large Advisory Committee said it “does not support the direction taken in this budget”, adding:

Specifically we see an increase in staff headcount and personnel costs while services to the community have been brutally cut. ICANN’s credibility rests upon the multistakeholder model, and cuts that jeopardize that model should not be made unless there are no alternatives and without due recognition of the impact.

Staff increases may well be justified, but we must do so we a real regard to costs and benefits, and these must be effectively communicated to the community

ALAC is concerned that the budget appears to cut funding to many projects that see ICANN reach out to, and fund participation by, non-industry potential community members.

Calling for “fiscal prudence”, the Intellectual Property Constituency said it “encourages ICANN to take a hard look at personnel costs and the use of outside professional services consultants.”

The IPC is also worried that ICANN may have underestimated the costs of its contractual compliance programs.

The Non-Commercial Stakeholders Group had some strong words:

The organisation’s headcount, and personnel costs, cannot continue to grow. We feel strongly that the proposal to grow headcount by 25 [Full-Time Employees] to 425 FTE in a year where revenue has stagnated cannot be justified.

With 73% of the overall budget now being spent on staff and professional services, there is an urgent need to see this spend decrease over time… there is a need to stop the growth in the size of the staff, and to review staff salaries, bonuses, and fringe benefits.

NCSG added that ICANN could perhaps reduce costs by relocating some positions from its high-cost Los Angeles headquarters to the “global south”, where the cost of living is more modest.

The ccNSO Strategic and Operational Planning Standing Committee was the only commentator, that I could find, to straight-up call for a freeze in staff pay rises. While also suggesting moving staff to less costly parts of the globe, it said:

The SOPC – as well as many other community stakeholders – seem to agree that ICANN staff are paid well enough, and sometimes even above market average. Considering the current DNS industry trends and forecasts, tougher action to further limit or even abolish the annual rise in compensation would send a strong positive signal to the community.

It’s been suggested that, when asked to find areas to cut, ICANN department heads prioritized retaining their own staff, which is why we’re seeing mainly cuts to community funding.

I’ve only summarized the comments filed by formal ICANN structures here. Other individuals and organizations filing comments in their own capacity expressed similar views.

I was unable to find a comment explicitly supporting increased staffing costs. Some groups, such as the Registries Stakeholder Group, did not address the issue directly.

While each commentator has their own reasons for wanting to protect the corner of the budget they tap into most often, it’s a rare moment when every segment of the community (commercial and non-commercial, domain industry and IP interests) seem to be on pretty much the same page on an issue.

Amazon’s .amazon gTLD may not be dead just yet

Kevin Murphy, March 11, 2018, Domain Policy

South American governments are discussing whether to reverse their collective objection to Amazon’s .amazon gTLD bid.

A meeting of the Governmental Advisory Committee at ICANN 61 in Puerto Rico yesterday heard that an analysis of Amazon’s proposal to protect sensitive names if it gets .amazon will be passed to governments for approval no later than mid-April.

Brazil’s GAC rep said that a working group of the Amazon Cooperation Treaty Organization is currently carrying out this analysis.

Amazon has offered the eight ACTO countries commitments including the protection of such as “rainforest.amazon” and actively supporting any future government-endorsed bids for .amazonas.

Its offer was apparently sweetened in some unspecified way recently, judging by Brazil’s comments.

ACTO countries, largely Brazil and Peru, currently object to .amazon on the grounds that it’s a clash with the English version of the name for the massive South American rain forest, river and basin region, known locally as Amazonas.

There’s no way to read the tea leaves on which way the governments will lean on Amazon’s latest proposal, and Peru’s GAC rep warned against reading too much into the fact that it’s being considered by the ACTO countries.

“I would like to stress the fact that we are not negotiating right now,” she told the GAC meeting. “We are simply analyzing a proposal… The word ‘progress’ by no means should be interpreted as favorable opinion towards the proposal, or a negative opinion. We are simply analyzing the proposal.”

ICANN’s board of directors has formally asked the GAC to give it more information about its original objection to .amazon, which basically killed off the application a few years ago, by the end of ICANN 61.

Currently, the GAC seems to be planning to say it has nothing to offer, though it may possibly highlight the existence of the ACTO talks, in its formal advice later this week.

ICANN mulls $68 million raid on auction war chest

Kevin Murphy, March 9, 2018, Domain Policy

ICANN wants to put away another $68 million for a rainy day and it’s considering raiding its new gTLD auction war chest in order to do so.

It’s also thinking about dipping into the pool of cash still left over from new gTLD application fees in order to bolster is “reserve fund” from its current level of $70 million to its target of $138 million.

But, as a relief to registrants, it appears to have ruled out steep fee increases, which had been floated as an option.

The reserve fund is basically a safety net that ICANN could use to keep the lights on in the event that revenue should suddenly plummet dramatically and unexpectedly.

If, for example, Verisign returned to its old antagonistic ways and refused to pay its .com fees for some reason, ICANN would lose about a third of its annual revenue but would be able to tap its reserve until the legal fisticuffs were resolved.

ICANN said in a discussion document (pdf) this week that it took $36 million from the reserve since 2014 in order to complete the IANA transition. Over the same period, its annual budget has swelled from about $85 million to $138 million and contributions back into the reserve have been minimal.

That’s left it with a meager $70 million squirreled away, $68 million shy of its longstanding target level of one year’s budget.

ICANN is now saying that it wants to replenish the fund in less than five years.

About $15 million of its target would come from cost-cutting its operations budget over the period.

It also wants to take at least $36 million from the new gTLD auction proceeds fund, which currently stands at $104 million (with another $132 million incoming should Verisign successfully obtain .web over the objections of rival bidders).

The remaining $17 million could come from “leftover” new gTLD application fees — that fund is currently about $80 million — or from more cost-cutting or more auction proceeds, or from a combination of the three.

A fourth option — increasing the per-transaction fees registrants are charged via their registries and registrars — appears to have been ruled out.

My back-of-the-envelope maths suggests that an annual per-transaction increase of about $0.07 would have been needed to raise $68 million over five years.

The proposal is open for public comment until April 25.

ICANN strikes back at “offensive” .gay bidder

Kevin Murphy, March 7, 2018, Domain Policy

ICANN has responded harshly to claims that a probe of its handling of applications for the .gay gTLD was fixed from the outset.

Writing to dotgay LLC lawyer Arif Ali this week, ICANN lawyer Kate Wallace said claims that the investigation “had a pre-determined outcome in mind” were “as offensive as they are baseless”.

FTI Consulting gave ICANN the all-clear in January, dismissing allegations that ICANN staff had interfered with Community Priority Evaluations of .gay and other gTLDs conducted by the Economist Intelligence Unit.

But dotgay quickly responded by calling the FTI report a “whitewash”, saying “a strong case could be made that the purported investigation was undertaken with a pre-determined outcome in mind.”

Now, in an unusually pointed letter (pdf) Wallace calls dotgay out for its “insulting” implications.

While dotgay LLC may have preferred a different evaluation process and may have desired a different outcome, that is not evidence that FTI undertook its investigation “with a pre-determined outcome in mind.”

Your accusations in this regard are as offensive as they are baseless. The Board initiated the CPE Process Review in its oversight role of the New gTLD Program to provide greater transparency into the CPE process. There was no pre-determined outcome in mind and FTI was never given any instruction that it was expected to come to one conclusion over another.

Your assertions that FTI would blatantly violate best investigative practices and compromise its integrity is insulting and without any support, and ICANN rejects them unequivocally.

Wallace works for ICANN outside counsel Jones Day — which contracted with FTI for the investigation — but states that she is writing at the behest of the ICANN board of directors.

The board “is in the process of considering the issues” raised by Ali and gay rights expert lawyer William Eskridge, she wrote.

The board’s agendas for next week’s ICANN 61 public meeting in Puerto Rico have not yet been published.

dotgay wants to avoid a costly (or lucrative) auction against other .gay applicants by gaining “community” status, but it failed its CPE in 2014, largely because its definition of “gay” over-stretches, and has been appealing the decision ever since.

Whois privacy will soon be free for most domains

Kevin Murphy, March 5, 2018, Domain Policy

Enormous changes are coming to Whois that could mark the end of Whois privacy services this year.

ICANN has proposed a new Whois model that would anonymize the majority of domain name registrants’ personal data by default, only giving access to the data to certain certified entities such as the police.

The model, published on Friday and now open for comment, could change in some of the finer details but is likely being implemented already at many registries and registrars.

Gone will be the days when a Whois lookup reveals the name, email address, physical address and phone number of the domain’s owner.

After the model is implemented, Whois users will instead merely see the registrant’s state/province and country, organization (if they have one) and an anonymized, forwarding email address or web form for contact purposes.

Essentially, most Whois records will look very much like those currently hiding behind paid-for proxy/privacy services.

Technical data such as the registrar (and their abuse contact), registration and expiry dates, status code, name servers and DNSSEC information would still be displayed.

Registrants would have the right to opt in to having their full record displayed in the public Whois.

Anyone wanting to view the full record would have to be certified in advance and have their credentials stored in a centralized clearinghouse operated by or for ICANN.

The Governmental Advisory Committee would have a big hand in deciding who gets to be certified, but it would at first include law enforcement and other governmental agencies.

This would likely be expanded in future to include the likes of security professionals and intellectual property lawyers (still no word from ICANN how the legitimate interests of the media or domain investors will be addressed) but there could be a window in which these groups are hamstrung by a lack of access to thick records.

The proposed model is ICANN’s attempt to bring Whois policy, which is enforced in its contracts with registries and registrars, into line with GDPR, the European Union’s General Data Protection Regulation, which kicks in fully in May.

The model would apply to all gTLD domains where there is some connection to the European Economic Area.

If the registrar, registry, registrant or a third party processor such as an escrow agent is based in the EEA, they will have to comply with the new Whois model.

Depending on how registrars implement the model in practice (they have the option to apply it to all domains everywhere) this means that the majority of the world’s 188 million gTLD domains will probably be affected.

While GDPR applies to only personal data about actual people (as opposed to legal persons such as companies), the ICANN model makes no such distinction. Even domains owned by legal entities would have their records anonymized.

The rationale for this lack of nuance is that even domains owned by companies may contain personal information — about employees, presumably — in their Whois records.

Domains in ccTLDs with EEA connections will not be bound to the ICANN model, but will rather have to adopt it voluntarily or come up with their own ways to become GDPR compliant.

The two largest European ccTLDs — .uk and Germany’s .de, which between them account for something like 28 million domains — last week separately outlined their plans.

Nominet said that from May 25 it will no longer publish the name or contact information of .uk registrants in public Whois without their explicit consent. DENIC said something similar too.

Here’s a table of what would be shown in public Whois, should the proposed ICANN model be implemented.

Domain NameDisplay
Registry Domain IDDisplay
Registrar WHOIS ServerDisplay
Registrar URLDisplay
Updated DateDisplay
Creation DateDisplay
Registry Expiry DataDisplay
Registrar Registration Expiration DateDisplay
RegistrarDisplay
Registrar IANA IDDisplay
Registrar Abuse Contact EmailDisplay
Registrar Abuse Contact PhoneDisplay
ResellerDisplay
Domain StatusDisplay
Domain StatusDisplay
Domain StatusDisplay
Registry Registrant IDDo not display
Registrant NameDo not display
Registrant OrganizationDisplay
Registrant StreetDo not display
Registrant CityDo not display
Registrant State/ProvinceDisplay
Registrant Postal CodeDo not display
Registrant CountryDisplay
Registrant PhoneDo not display
Registrant Phone ExtDo not display
Registrant FaxDo not display
Registrant Fax ExtDo not display
Registrant EmailAnonymized email or web form
Registry Admin IDDo not display
Admin NameDo not display
Admin OrganizationDo not display
Admin StreetDo not display
Admin CityDo not display
Admin State/ProvinceDo not display
Admin Postal CodeDo not display
Admin CountryDo not display
Admin PhoneDo not display
Admin Phone ExtDo not display
Admin FaxDo not display
Admin Fax ExtDo not display
Admin EmailAnonymized email or web form
Registry Tech IDDo not display
Tech NameDo not display
Tech OrganizationDo not display
Tech StreetDo not display
Tech CityDo not display
Tech State/ProvinceDo not display
Tech Postal CodeDo not display
Tech CountryDo not display
Tech PhoneDo not display
Tech Phone ExtDo not display
Tech FaxDo not display
Tech Fax ExtDo not display
Tech EmailAnonymized email or web form
Name ServerDisplay
Name ServerDisplay
DNSSECDisplay
DNSSECDisplay
URL of ICANN Whois Inaccuracy Complaint FormDisplay
>>> Last update of WHOIS databaseDisplay

The proposal is open for comment, with ICANN CEO Goran Marby requesting emailed input before the ICANN 61 public meeting kicks off in Puerto Rico this weekend.

With just a couple of months left before the law, with its huge fines, kicks in, expect GDPR to be THE hot topic at this meeting.